Tuesday, March 25, 2014

Renegades, unreasonable men and jesters drive innovation

I've written before about the Shaw quote about progress and it's reliance on the "unreasonable" man.  Just as a reminder, George Bernard Shaw wrote that "a reasonable man adapts himself to the conditions that surround him.  The unreasonable man adapts conditions to himself...therefore all progress depends on the unreasonable man."  This was brought home as I was thinking about the events in Crimea recently.

There are people, even perhaps readers of this blog, who understand game theory and psychology better than I do, but what a great example recently of game theory and unreasonableness than what Putin did in the Crimea.  Putin has demonstrated that he will use his "unreasonableness" to get what he wants.  After all, when he acts in an unreasonable way he gets outcomes (Crimea) that he wants.  When he comes back into the fold of reasonableness, he will also be rewarded by Europe, who will be happy to see him act within what European leaders consider the acceptable norm.  In either setting, he wins.  He gets what he wants by assertiveness and ignoring convention (being unreasonable, according to bureaucrats) and will be rewarded again when he completes the takeover and acts according to international custom and law.  Those politicians and government officials, our president included, lose not because they are inept or incapable, but because they are concerned with appearing "reasonable".  They won't step outside accepted political and social norms to win what they want.

So, you may agree or disagree with my hypothesis above, but you should be asking:  what's this got to do with innovation?  Let me quote Shaw again:  all progress depends on the unreasonable man.  To be innovative, in a startup, a midsized firm or a large corporation, you've got to be unreasonable.  Being innovative by definition means creating something new and valuable, and the mere creation of something new and valuable is bound to upset the existing order.   People who build and defend the existing order will see anything new and valuable, that calls the existing order into question, as unreasonable and disruptive. 

Let's look at the typical corporate environment to see how innovation can be "unreasonable".  Most organizations have honed their operating models for years, striving for efficiency, low costs, low variability, low risk.  They have becomes machines of efficiency, which work at peak performance because the products, solutions and processes are well-defined, well-understood.  Now, attempt to introduce a radically different idea, or product, or way of thinking into that homogeneous, protected environment.  The antibodies of corporate culture will attack the new idea at once, questioning the value of the idea, the purpose and goal of a project, the predictability of a result.  Why not just keep doing what we are doing, they ask.

Gandhi was considered a renegade, a borderline criminal, for his actions to gain status for Indians and to establish home rule.  Gandhi had a great quote for what innovators will face when they introduce new ideas into a very safe and predictable corporate culture.  First they ignore you, hoping you'll go away. They they ridicule the ideas, laughing at the concepts, hoping to embarrass you.  Then they actively fight the ideas, to protect the status quo.  Eventually, if you have the stamina to push through and your ideas are valuable, you'll win.  Who but an unreasonable man could endure such resistance?

Corporate innovation faces a significant challenge, because there are few incentives and many disincentives for unreasonable men and women in the corporate culture.  Our business cultures and incentives are set up much like the scenario I presented in the Crimea, where everyone expects everyone else to act within established parameters of social acceptance and predictability.  Managers and executives who don't work within corporate culture, who question the rationale of strategy, who present new and radical ideas often aren't welcomed or promoted.  Most corporate executives toe the company line rather than act or think in what the culture would consider an "unreasonable" way.  This makes it difficult for anyone in large corporations to pursue radical ideas, because they've been taught to think within the corporate parameters, not to work against them.

In the days when kings ruled the world many had a court jester whose job it was to poke fun at plans or ideas presented to the king, often because the king needed a different opinion or perspective.  This role was often taken on by people with a very quick wit, who could create jokes about plans or place ideas in a farcical light.  The point was to question the advice and existing order.  I've argued before that many corporations need a corporate jester, to constantly question the direction and goal of organizations, and they need to tolerate and even listen to the few "unreasonable" men and women who are striving to create new products and services.  Yet too often corporate cultures squelch their voices and compensation and promotion paths are closed if people don't seem "within the fold" of the corporate culture. 

What does your culture and reward system do to the renegades, the jesters and the unreasonable men and women?  These are the people who are most likely to create interesting new ideas, and right now many corporate cultures are ignoring them, shoving them to the periphery of a business, rather than understanding how their insights can be converted into new products and services that create value for customers.  Protecting the status quo is nice, as long as you have strong defenses and weak opposition, but those days are numbered.  You must sally out and attack new markets, enter new channels and perhaps even disrupt your own products.  The reasonable managers and executives aren't going to do that.  Give the unreasonable a chance.
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posted by Jeffrey Phillips at 6:02 AM 0 comments

Tuesday, March 18, 2014

Six Components for successful innovation capacity

I'm always a little cautious about any post that dares to state a definitive number of tasks or components for successful completion of any task.  Therefore, it's with some trepidation that I'm going out on a limb to talk about what I think are six critical components for sustained innovation capacity.  Note that I am saying six critical, not "the only six critical" because while I'm certain these are important, there are probably others that are just as important.

But, since most organizations don't have these critical capabilities in place, why worry about two or three others until the most important functions are in place. 

Note that I am making a distinction between an innovation project - discrete, one time effort - versus building a capability to sustain innovation.  As we said when we talked about the Executive Workmat, you don't need a lot of overhead to innovate once, but you need more guidance and structures to sustain innovation over the long term.

Here's my "top down" list of six critical components to sustain innovation:
  1. Good "governance".  And don't recoil from that concept just yet.
  2. Engaged sponsors who understand the importance of their role.
  3. A defined innovation workflow or process.
  4. Innovation teams made up of engaged people who have some training within the process and understand their roles - perhaps are even proficient at the tools.
  5. Common deliverables - a standard set of outputs, data, information and templates to simplify and standardize innovation outputs and outcomes where possible
  6. A culture that sustains innovation, reduces friction and risk, encourages exploration.
A brief treatise on each.


Most innovators shudder when they hear governance, but no process works better with good governance than innovation.  Most firms have very little time or focus for innovation, so when they get to do innovation they need sharp focus on the right goals and metrics, and good resource allocation and project prioritization.  If this governance is missing or left to chance, the innovation you'll do will be disappointingly small.  We don't want to smother the activity with lots of traditional governance, but providing some clear lines of sight, decision making and prioritization will accelerate innovation.

Engaged Sponsors

A "sponsor" is a person who desperately wants a solution to a problem or opportunity, and can provide air cover, resources and funding to ensure the project gets done.  Sponsors are not selected; they select themselves.  Sponsors aren't simply overseers; they should benefit from the work.  Innovation should focus on critical needs that senior sponsors can't solve or address with existing toolkits.  If the activities aren't sponsored, they won't receive staffing or funding, or will lack critical definition and oversight.


Yes, you can innovate once using any process or method you'd like, but the more often you innovate, and as you innovate in more lines of business, geographies and functions, a common, understood method, workflow or process matters.  Like governance, a consistent, firm but light hand is wanted here.  Everyone should understand the process, know its capabilities and limitations, and gain skills in applying the process.  But the process shouldn't dictate the pace or the amount of discovery, and the process should be an means, not an ends.


I've said it before and will continue to say it until you believe it:  people are THE most vital component in innovation.  Machines and computers can't describe opportunities, do customer research, generate ideas, evaluate ideas.  People matter most.  And getting the right people engaged who are passionate about new ideas and not wedded to the "way we do things" matters.  Moreover, those passionate people need training, and time to do innovation work effectively.


An outcome of good process and strong teams is consistent deliverables.  To repeat innovation success and to gain learning curve advantages, it helps to standardize outputs where possible.  This means defining what each activity should generate, and providing an example, a tool or a template for critical activities.  Doing so reduces the chance that the innovation teams will dream up their own deliverables or completely miss information or insights.


If engaged people and good processes are important, then we must examine the formal and informal decision making and structures that influence what people do and how they do what they do.  That means examining formal decision making and hierarchy, and examining informal cultural barriers.  Your culture dictates to a great extent how engaged and creative your people will be, and what ideas they will entertain.  You don't need to change your culture to innovate once; the culture will overlook your impertinence.  But if you plan to innovate consistently, you will need to train your culture to become much more engaging, risk taking.  More open to experimentation and "failure".  More willing to explore divergent thinking and to break industry rules.   And, since that type of thinking conflicts with 30 years of training and management philosophy, it will be hard to do.

Why you can't pick and choose

What if you don't want to work on all of these factors?  What if you'd like more innovation but don't want to contemplate a focus on these six features?  Which can you prioritize and which can you ignore?  Ah, that's a sucker's bet.  For instance, let's say you provide good governance, train your people and define deliverables but don't change anything about your culture.  Will that deliver the results you hope for?  Probably not.   Or, you work diligently on your culture, define processes and deliverables but lack for engaged sponsors.  Everyone will work on innovation but none of the ideas will ever progress because there's no executive buy-in.

Increasingly, and for a number of reasons, innovation will shift in importance from an occasional, half-hearted activity to a much more focused, consistent capability.  That shift can't happen until an organization designs and builds the components I've described above, and that Paul Hobcraft and I described in the Executive Workmat.  Many firms will try to conduct innovation having paid lip service to some or all of these components, and for the most part that innovation work will become exceptionally incremental or will fail.  Unless and until you decide to do innovation right, and do it completely, you'll struggle to do any innovation at all.

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posted by Jeffrey Phillips at 6:36 AM 1 comments

Friday, March 14, 2014

Small, impermanent and sticky - the real innovation world

There's nothing more aggravating than when a Disney World ride can communicate a deep philosophical point about business.  After all, once we knock down trade barriers, globalize the financial systems and everyone starts using the internet for interaction and commerce, it's a very small world after all.  That point was brought home recently for me in a rather interesting way.

I've been leading an innovation project in Cincinnati, which has been really negatively impacted by the Delta-Northwest merger.  Cincinnati lost on the order of several hundred flights a day when the two "hubs" - Delta's in Cincinnati and Northwest's in Detroit - were merged into Detroit.  This supposedly led to the loss of some multinational corporations, since international travel became more difficult.  One notable loss for Cincinnati was Chiquita Brands, the number one distributor of bananas.  Chiquita moved out of Cincinnati in early 2012.

Now, here's the interesting point about "economic development" as it is pursued today.  One state will try to convince a factory or business to relocate to its state from another.  This is a zero sum game, because any firm willing to leave one state or location for another will do so again.  But traditional economic development has been focused on recruiting existing companies to open new locations or to move or relocate locations to other states.  What we end up competing on are factors like low cost of labor, available land, low taxes and other factors that aren't adding value and can be easily copied by someone else.

Where, you may ask, did Chiquita end up, and why is it the focus of an innovation blog?  Well, Chiquita ended up in Charlotte, not far from my hometown of Raleigh.  And boy was Charlotte excited.  A major multinational firm was picking up and moving to Charlotte.  That happened only a few years ago.  Yesterday, it was announced that Chiquita has agreed to merge with the largest distributor of bananas in Europe, Fyffes, and the new global headquarters will be located in Ireland, where, as you guessed it, corporate taxes are lower.  Charlotte barely had time to celebrate the new headquarters before the new merger will move the global headquarters yet again.

So in a space of less than 30 years, Chiquita or its predecessors have been headquartered in:  New Orleans, Cincinnati, Charlotte and now Ireland.  The cycle time for a corporate headquarters is rapidly shrinking.  Chiquita was headquartered in New Orleans for about 50 years, Cincinnati for 30 years, Charlotte for 3 years.  The pace of change is accelerating everywhere and in every dimension.

So, what's this got to do with innovation? With all apologies to Thomas Friedman's "Hot, Flat and Crowded" there are three factors for innovators to consider:

  1. Your competition is global regardless of your product or service.
  2. Nothing is permanent, not competitive advantage, location, tax laws, trade protections, intellectual property, etc.  Always extract all the value you can from what you do now and simultaneously cannibalize your products before someone else does.
  3. We need to make cities, regions and states places where creative people "stick" which will attract entrepreneurs and large corporate innovators.
It is a geographically small world

Once the majority of the income in any industry is based on data and financial services, you compete with everyone everywhere because everything is digital.  Sure, Chiquita distributes bananas, but much of that revenue is hedged on Wall Street and other financial markets, and Chiquita maximizes its profits based on weather forecasts, consumer demand data and other factors.  Financial transactions and information matter, and they can be managed from anywhere.  The majority of the innovation is in the business model and services, not in the actual product - bananas.  The actual bananas are a small portion of the actual business and most of the labor force in Central America probably doesn't work for Chiquita anyway.  Increasingly, we all compete on information, intellectual property, financial transactions and ideas.  Anyone can compete with anyone anywhere.  Increasingly it is a very small competitive world, and anyone can compete with anyone else anywhere, anytime.

It's a really impermanent world

I like to tell the story in the banking world of the "3/6/3" financial model.  Retail bankers from the 60s and 70s knew it well:  borrow at 3%, lend at 6% and you're on the golf course at 3pm.  Those were the halcyon days of long product cycles, exceptional predictability in financial markets and low competition.  Today, nothing is permanent, fixed or inviolate, and your business plan had better be as flexible and dynamic as the markets you serve.  Cincinnati banked on Delta airline maintaining a hub, and had hoped to retain Chiquita, but mergers and low taxes came calling.  I'm sure Charlotte hoped that Chiquita would stay, but mergers and low taxes came calling.  Cities, regions and states need to rethink their value propositions to private enterprises, and private companies need to rethink their relationships with the market, their customers and competitors.  A recent Gartner study suggested that the average longevity of larger American firms is shrinking - that is, the birth, life and death cycle of large firms is getting shorter.  Your plans must incorporate the dynamic and impermanent nature of your markets.

Adoption of new technologies accelerates once the "infrastructure" is established.  For example, it will take a long time for electronic appliances to penetrate homes until electricity becomes a consistent service.  But once the infrastructures are in place, innovation accelerates.  Look no further than smartphones and what they are doing in terms of information and apps.  Smartphones have replaced point and shoot cameras, GPS devices and in some cases handheld computers.  As the platform solidifies, there will be an accelerating opportunity for innovation.

It could be a "sticky" world

Note that few firms are moving from Austin, or Silicon Valley, and few firms are migrating to Sudan, regardless of the tax implications or the weather.  There are factors that make a physical place "sticky", and factors that can make a corporation "sticky" for its employees and customers.  Every firm and every location needs to think carefully about how they become "sticky" for the best employees, customers and citizens.

Yes, everything is more mobile, but there are plenty of people who are willing to "stick" with the right company or location.  In fact while corporate headquarters are moving all the time (Boeing to Chicago, Chiquita to Charlotte, Ray-o-vac to Atlanta to name just a few), most people in the US exhibit less mobility than ever before.  Some of the lack of mobility is tied to homes that are underwater, but increasingly it seems that people are less likely to move to take new jobs.  That means that companies can command more loyalty and engagement if they'd like to, but so far most are more interested in lowering the tax base rather than creating more passion and loyalty from their best workers.

Richard Florida and others have written extensively about what makes a city or region "sticky", and when a place attracts and retains smart, creative people there is often a positive network effect, attracting more people with more ideas and more intellectual capital to that location.  As these things happen, the value of being "in that place" rises, incomes and home prices rise and so forth.  And, when or if one large corporation flits in and out, like Chiquita in Charlotte, if the place is truly an interesting, sticky place the people there will remain and start interesting new businesses rather than follow Chiquita onward to its new destination.  In other words, we need our locations to be destinations that people desire more than the businesses they work for.

What does a sticky location or business look like?  It's a place that pursues future possibilities rather than hunkering down to rest on past triumphs.  It's a place that encourages interaction, education, free exchange of ideas.  It's a place where many different "communities" interact and where funds and resources are allocated to the best ideas, not to favorite sons or pet projects.  It's a place where there is a critical mass of interested, and interesting people who have ideas they want to share, and where there are people who listen and implement those ideas.

Hot, Flat and Crowded or small, impermanent and sticky

Friedman borders on the Malthusian in his book, and for good reason.  Many of the issues he cites are real - overcrowding and global warming for example.  But in the midst of these issues are other issues and challenges just as important.  The world of innovation is increasingly smaller and more fiercely competitive, impermanent and rocked with constant, unexpected change. Places and organizations must become more "sticky" to attract and retain talent, with less regard to nameplate corporations which will come and go, drawn by tax incentives.  Places and businesses must compete on more than low labor costs, low taxes and corporate incentives.  They must differentiate on human capital, creativity and network effects brought on by a dynamic local population.

The first two factors are unavoidable.  Your business or geographic location will be buffeted by increasing competition and the accelerating pace of change and uncertainty.  The real question is whether your firm or location can create a place where interesting, vital, creative and innovative people "stick" regardless of the tos and fros of corporate behemoths chasing transient incentives.
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posted by Jeffrey Phillips at 5:03 AM 0 comments

Tuesday, March 11, 2014

Why Norm can't innovate

I had the pleasure of speaking last week to a human resource executive roundtable.  What that means is that there were a number of HR and Talent Management executives sharing experiences and trying to gain more insight into innovation. The challenge that many of them face is that their CEOs are demanding more innovation, yet the people within the organization are simply not equipped to innovate.  That's not the fault of the existing HR or Talent Management staff however.  Mid size and larger organization have for years neglected to build innovation skills or capabilities in their employee base, preferring instead to focus on efficiency and productivity, reducing variance and eliminating waste. 

The challenge that many employees face then, when called on to innovate, can best be described through analogy.  Imagine, I told the roundtable, that you are an expert in a specific field of science, having dedicated your life to the acquisition of knowledge in your field.  Over the years your work has taken you deeper into your field, to the point where you can predict what is likely to happen and the work no longer challenges you.  You've given up everything else to focus on improving this narrow set of skills.  Then one day your executive comes to you and says "we need you to play right field for the New York Yankees on opening day. You've got a week to come up to speed". 

Sounds farfetched, right?  After all, no one who wasn't a practiced athlete could expect to start in any major league baseball game, especially not for the Yankees, without years of dedication and practice.  How could they be proficient, having never played the game, studied the strategy, practiced the various plays?  Isn't that an awfully high profile assignment, fraught with risk and almost doomed to failure?  But, now that we've described it, that sounds a lot like innovation work.

Why can't "Norm" or "Susan" or any other persona we'd like to create to represent people within your organization innovate?  Because they don't have exposure to the tools, haven't received any training.  But beyond tools and training, they don't have the muscle memory acquired from years of practice.  They don't have the "10,000" hours of experience Gladwell suggests is vital for expertise.  What we take for granted about star baseball players who seem so effortless is the thousands of hours of fielding and batting practice they've committed before they ever step into a minor league game, much less put on the Yankee uniform.  And yes, playing in the "show" - named that by the baseball players themselves - is a high profile, high wire experience.  You either compete at the levels expected - few errors, hitting above the Mendoza line, add value to the team - or you move back to the minors.

Why do we take people who've spent their careers in many cases pursuing efficiency, toeing the company line on risk and costs and short timeframes, who've literally built their career on succeeding within the model that's now limiting growth, and suddenly ask them to tear down everything they've built, to ignore all the scope and rules of several decades?  How do we expect them to be proficient using new tools and gaining new insights when they've never done the work before?  Norm and Susan are, in many cases, perfectly capable of doing excellent innovation work, but only when all of the "stars" align:  when the tools are familiar, when they've had a chance to practice and gain expertise, when the culture is supportive of innovation, when the compensation and rewards match the amount of risk they are asked to bear. 

You can't "train" your way to a more innovative staff.  You can't "change the culture" overnight.  You can't temporarily suspend the disbelief or resistance toward change and new ideas.  Well, you can do all of this once, but it won't sustain.  And sustained innovation is what most firms really need.  Norm and Susan can innovate, but only when your executive team does all of these things.  Skills development, training, cultural change, changing compensation and rewards, recruiting people with new skills, identifying people who are passionate innovators, giving them space to try, to learn and occasionally to fail. 

People are inherently creative.  Unfortunately our educational experience is focused on finding one right answer quickly, rather than encouraging exploration and divergent thinking.  Further, corporate focus on short term profits, cost cutting and efficiency reinforce narrow and repetitive thinking.  Any business can create an innovation engine, but it will start with convincing Norm and Susan to use the atrophied portions of their brains, and giving them the time and space to do that consistently.  Further it may mean recruiting people who don't fit the existing corporate model and who bring new perspectives to bear.  Being innovative isn't chance, it's a choice.
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posted by Jeffrey Phillips at 6:19 AM 0 comments

Thursday, March 06, 2014

Innovation is a double-edged Sword

I listened recently to an NPR story with some fascination, for what it should tell all of us about the possibilities and perils of innovation.  The story was from the Oscars, and noted that while many of the movies and other content we watch are loaded with special effects, many of these jobs are migrating to other countries.  As the story notes, the digital effects industry was basically founded in LA by Spielberg and others, and has rapidly transformed the film industry.  Movies like Gravity are today mostly just special effects - there are scenes in Gravity where the only "real" feature is Clooney or Bullock's face.

What's instructive about the story is that our country and the film industry in Hollywood innovated a completely new digital experience, creating tools and methods to bring exceptionally realistic effects to the screen.  Further, we've congratulated ourselves on the fact that we can continue to innovate in creating content and media, even if we can't compete in manufacturing.  The US will still be a content and intellectual property hub, we've assured ourselves.

Except that may be slipping through our fingers.  What we forgot to remind ourselves of is that once a capability has been reduced to a toolset and methods that can be taught, the work will begin to migrate to locations and people who will do the equivalent work for less money.  While we did innovate the tools and methods, we can't protect those tools and methods from being used in places where labor costs are lower while the learning capacity and ability to execute is roughly the same.  This is why many digital effects jobs are migrating - first to Canada and New Zealand, but eventually to places like Ukraine, India, China and others.

Dan Pink talked about this phenomenon in his book A Whole New Mind.  If it can be documented, automated and taught to others, it will eventually seek the least cost production methods.  Hollywood is rightly upset about special tax incentives that countries like Canada are creating, but they won't last, because this work will continue to flow to places where the labor costs are low.  Because we didn't just invent digital effects, but we are constantly innovating the tools and methods, and while those innovations are improving the quality of the effects, they often make learning the tools even easier. 

Based on this analysis, it would seem we have a couple of options.  First, once we innovate to create a new capability, we can attempt to "lock it up" so that no other country or region can learn our secrets and undercut our pricing.    When England reigned as the supreme manufacturer of cloth in the 17th and 18th century, there were laws in place to forbid the export of looms, and people with experience building and maintaining looms were not allowed to emigrate.  However, in this day and age information, tools and methodologies traverse national boundaries very quickly.  There's a huge trade in illicit corporate and technology secrets.  We certainly can't hope to "lock up" our tools and knowledge forever.

Second, we can focus on where innovation is more sustainable.  We know the tools can be learned, but can others innovate the tools and methods as quickly as we can?  I doubt it.  Experience going into the tools will matter, so we have a headstart and can keep it, but only if we have access to those using the tools.  We can't afford to become an ivory tower, exporting tools and methods that aren't used locally, where we lack feedback.

Third, we can become the country that constantly invents new things, and use innovation as a driver to continually reinvent products, services and business models.  This is what is most likely in store for future US generations - a future of constant innovation and change - if we hope to continue to improve our standard of living.  The idea of large employers paying thousands of people to make things in the US is increasingly unreasonable due to higher payroll and benefits costs.  That work has migrated already.  Even many higher order functions, like accounting and digital effects, are moving overseas.  Jobs we never thought could be outsourced are increasingly being done in other places, and yes, innovation is building the concepts and delivering the tools to do those things.

Innovation is a double edged sword - it helps those who use it first, but if those initial pioneers plan to stand on that initial innovation for very long, they'll find the sword swings back and both edges are sharp.  

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posted by Jeffrey Phillips at 7:54 AM 0 comments

Tuesday, March 04, 2014

Innovators are producers of insight, not just consumers

I was leading a three day innovation workshop recently, training a team to kick off a new innovation project, when one of my partners alerted me to a recent article in the HBR entitled An Anthropologist walks into a bar.  The article focuses on the power of observational research, in this case a type of ethnography, and provides two case studies where ethnography was used to drive new insights.  If you haven't read the article, I'd encourage you to do so.

Once you are finished with the article, your next response will be, so that's all there is?  Beer companies should find out what beer drinkers want by going into bars?  Ostomy appliance manufacturers should examine the ways their products are used and the different body types and contours of the various users.  Isn't that OBVIOUS?  Well, yes, much of this research and insight is obvious in hindsight, just sitting there waiting to be observed.  But you've got to be a capable observer to notice.  And to notice, you've got to become a producer, not simply a consumer, of insight.

Beware of any paragraph that begins: the innovation challenge many large companies today is...  Because there isn't one problem or challenge doing innovation well, there are many.  Innovation is unusual, different from the status quo.  It requires more risk taking and introduces new methods and tools.  Most innovation won't "pay off" for years, so it frustrates short term thinking.  But you know all that already, right?  Here another challenge for innovation:  most of us have become consumers of information rather than producers.  Rather than go and find out what's going on with our customers, rather than creating or discovering new insights, we've become content to be consumers of what ever information others care to share or sell to us.

What others share

If I have unique insights that are valuable and can help me create meaningful, differentiated products and services, why would I share that information with anyone else?  I'll keep that information as close to the chest as possible, hoping it will pay off for years to come.  When we purchase market research from other firms, when we become consumers of market insights and consumer research rather than producers of that information, we should expect to receive watered-down, second-hand insights and information.  After all, the market research people want to sell that information to many people, and the broader the audience the less distinctive the information needs to be.  Secondly, we we become consumers we need to be aware of the inherent biases or perspectives of the people gathering and assessing information for us.  Every observer and reporter has unintentional or inherent bias.  We need to understand that bias and adjust for it, or simply overcome it by doing our own research.


I typically ask in my customer insight workshops how many of my attendees have participated in some form of ethnography.  Few hands ever go up; after all it's still a new science.  But I'll take it further.  How many have sat in their retail spaces, their bank branches or where ever their products are used by their customers and simply watched to learn how their products are used, and what joy or frustration their products create?  When you get out from behind the desk and get out in front of customers using your products, you become a producer of market insight, more simpatico with the thinking of customers.  You'll exercise your empathy muscles to deeply understand why people act the way they do.  And you'll have much better insight into the actual needs of customers, and have a much greater chance of acting on that insight.

Edison, Jobs and others

And, yes, there are the fortunate few who had such incredible insight that they didn't have to go to customers.  They could assert what customers wanted.  Edison and Jobs are two examples, but I wouldn't go around claiming that I had the same insights as they did.  Most innovators need to get out from behind their desks, out of the status meetings and in front of customers using your product, channels moving your product or other stakeholders who influence how your product is sold or used.  Only then will you have the real insights you need, only then will you understand the depth and validity of the needs that are expressed.

Become a producer of insight

To become more successful at generating interesting and valuable new products and services that exceed customer expectations, we have to start with the unmet needs.  When we talk about discovering needs, we have several choices in how we identify and understand those needs.  Innovators can assert they understand the needs of customers because they themselves are consumers of the product.  Innovators can create technologies and push them to consumers, hoping to convince consumers they need the products and services.  Innovators can purchase market research and other customer insights from third parties and attempt to interpret the research in their product context.  Or, innovation teams can become producers of insight, going out to interact with their customers and consumers to gain first hand experience identifying and understanding unmet and unarticulated needs.  I'll leave it to your judgement to decide which works best in your setting, but our experience demonstrates the power of first hand observation, interpretation and empathy.

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posted by Jeffrey Phillips at 5:58 AM 1 comments