Friday, October 31, 2014

Whose job is it, anyway?

In every major corporation today, people are going to work.  They are focused on processing invoices, holding meetings, launching a new marketing campaign.  They are working hard to ensure that the actual results meet the forecasts, and that the spending is equal to or less than the budgets.  These folks have more than enough work to do each day, and on top of that they are constantly in meetings to update their managers on their progress.  What's more, they have families and lives that occasionally conflict with the work day, and work that occasionally interrupts their family life.

On top of this hyperactive work schedule, executives become aware that innovation is vitally important, and somewhat absent from the schedule of work or activities.  What to do?  Why, we'll simply layer on an added expectation that each team create some "innovation" on top of their already busy schedule.   There.  That's done.  But the question arises, "whose job is it to innovate?"

The Bromide and the Reality

As with many issues in life there isn't one easy answer.  In fact there is a range of answers, depending on how serious and how committed the management team is, and in fact many of the answers are correct depending on implementation and strategy.  On one hand you have the answer that "innovation is everyone's job" - that innovation should be a part of the daily routine and everyone should be responsible for generating new ideas.  As my favorite quote from the Incredibles goes:  "when everyone's special then no one is special".

On the other hand it's entirely possible to isolate innovation in very small teams, where they are the "experts".  This can happen in a skunkworks or often in an R&D environment.  The concept is to create almost a "high priesthood" of innovation that the rest of us merely gaze on in wonder.

The concept that "innovation is everyone's job" is what I call the bromide.  A bromide is "A trite and unoriginal idea or remark, typically intended to soothe or placate".  When you hear an executive say "innovation is everyone's job" ask yourself the following questions:  when am I going to get the training I need to do innovation well? What priorities can I set aside to pursue innovation the way it ought to be pursued?  Does the culture support the idea of everyone examining needs and coming up with new ideas?  Of course you've probably already asked these questions and come up with the logical answers:  Not soon, none, and not really.

Innovation can be everyone's job, but that goal requires a significant cultural change.  We have to give people permission to create new ideas, time to experiment and explore, and tools to do this effectively.  We also have to create processes and filters to manage all the ideas that we'll receive if everyone is truly innovating, because we can't possibly pursue them all.  It's entirely possible that everyone can innovate, but not without a lot of change.

On the far opposite end of the spectrum is innovation in the ivory tower.  Small, isolated experts generating new ideas while the rest of the organization merely responds and implements.  There are a number of challenges with this model as well.  First and foremost, isolated experts rarely create ideas that are meaningful and valuable to customers.  They simply fall in love with technologies or their own ideas, rather than understanding and fulfilling customer needs.  Another reason this model fails is in "ownership" of the ideas.  A small team cannot successfully toss ideas over the transom into product development and hope that their ideas will be implemented successfully.  Truly radical ideas require education and sponsorship. 

While it's clear that either of these answers can potentially be true, it should also be clear that neither are ideal.  If "everyone" is responsible for innovation, then eventually no one is truly responsible, and the energy to change a culture to truly enable everyone to be responsible for innovation is far more than most executives are willing to expend.  If small expert teams are responsible for innovation, you will generate good ideas, but rarely implement any of them,due to conflicts between the innovation teams and the rest of the business.

What's missing from both of these extremes is ownership and leadership.  Innovation requires teams to do new things and do them differently, while still maintaining the status quo products and processes.  It requires the desire to dig deeply into new ideas while still understanding and managing existing products and services.  It requires experimentation and investigation while fully understanding how to cross the bridge from idea to product development, and product development to successful launch.  Someone or some teams need to be held accountable for innovation.

The people who should be held accountable and responsible for innovation - the people whose job it is - are mid and senior level managers who lead lines of business, who lead product groups or product teams.  Unless and until these folks are held accountable, and become if not experts at least champions for innovation, there will be little real output or outcome.

Once we understand who is accountable for innovation outcomes, then we can begin to decide how to allocate the work of innovation, how to establish priorities, how to decide who gets the innovation training and how their time and focus will be reallocated.  

Saying that it's everyone's job dilutes the responsibility and leave no clear authority.  Placing all innovation in an expert team risks isolation and estrangement.  If executives want innovation, they need to place the responsibility where it belongs, on their management team.
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posted by Jeffrey Phillips at 5:36 AM 0 comments

Monday, October 27, 2014

The Innovation Clock

If you are a sports fan, you'll recognize that many, if not most, team sports are time-driven.  Football (American and otherwise), basketball, hockey and others all have a definitive, set time for the match.  Baseball is probably one of the few sports that doesn't have a set timeframe, just a set number of chances for each team to have an "at bat".  In most games, time isn't a factor until the end of either half, and suddenly it becomes precious. That's why in American Football and in basketball "timeouts" are hoarded and used strategically, to manage the clock, to plan the final plays.  Time is of the essence, and using the precious time effectively matters to coaches.

But the vast majority of us live on corporate time, not sports time.  We don't compete in televised events on the weekends, but instead compete every day, every minute to drive more revenue and more profit for our employers.  Time is just as precious in this setting as it is in the sports world, and how we use the time allotted to us each day matters.  More important, I think, is how we decide to divide the time we have, and how we strategically determine what to do with those allotments.  For many firms, the division of time comes down to two critical segments, first, driving short-term revenue and profits, and second, generating ideas to drive future competitive advantage and profits.  If our "game" is divided into two halves or segments, one based on efficiency and short term profitability and the second on innovation, how are we determining the time investment?

In football, basketball and baseball each team gets an equal opportunity.  Once one team has had the ball and made its plays, the opposite team gets to attempt its strategy.  Equal number of opportunities does not mean equal time or equal outcomes.  A poor football team may conduct three plays and then punt the ball back to their opponent, who may methodically take the ball down the field and score. But even in games where the teams are significantly mismatched, the weaker team gets to possess the ball every other time.  In the business world the division of labor is even more pronounced.  In many organizations it can be difficult to find anyone who has a full time "innovation" role.  Just about everyone is focused on efficiency, effectiveness and short term profits.  When innovation is attempted, we draft some of the people who already have a full time commitment and ask them to conduct an innovation exercise.  These folks often don't receive the training they need, and have divided loyalties between their everyday job and their innovation tasks.

The question becomes:  how do we plan and allocate resources for two very important tasks:  keeping the efficient operations churning to generate short term profit, and developing new ideas to fuel future earnings and growth.  Both have to occur - it's exceptionally difficult for a business to ignore developing new skills or new products for future earnings.  Yet there are few rules of thumb or methods for an executive team to capably divide the two important deliverables, and its innovation that suffers.  And when innovation is neglected, it's often the case that we see executives forced to call a "timeout", when their products are disrupted by a new entrant.  At that point the executives will place people on a very urgent, short term activity to fix the fact that innovation was ignored. But as must of us sports fans know, trying to dig out from a deep hole late in the game is very difficult.

What's your innovation clock?  Are you adequately dividing your time between the efficient operating processes in place today and the innovative insights and skills needed to develop new products for tomorrow?  How do you decide how much time and resource commitment is necessary to spend in each area?  How do you signal to your teams that time must be spent on innovation activities on a regular basis, rather than signalling time out late in the game, faced with an insurmountable lead?
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posted by Jeffrey Phillips at 6:23 AM 0 comments

Friday, October 24, 2014

Opening the innovation aperture

Today a brief tip of the hat to Larry Keeley and his team at Doblin Group, for their concepts of "Ten Types" of innovation.  Keeley and his team created a very nice graphic that captures many of the different types of potential outcomes of an innovation activity.  That is, innovation can result in a new product, a new service, a new business model, a new process, and so forth.

This concept is important, because when most of us think of "innovation" we think of new, tangible products.  In fact much innovation work is simply the "front end" to new product development.  Using innovation just to create new products is like using a computer to only surf the web - it's power and capabilities are limited unnecessarily.  What's more, product innovation in many cases is obvious and somewhat boring, unless the goal is "disruptive" and the team fulfills that goal.

Further, many people will argue that they have plenty of products.  What they need are new services, new channels, new customer experiences and new business models.  In fact many of the "big" innovations in the last few years are more likely to be business models (Software as a Service as an example) or customer experience innovations (anything Apple has made).  There's a pent-up demand for things that are new, valuable and unusual, not just tangible products but solutions that provide value.  Getting a company to think beyond the product is important, and Keeley and his team have presented us with a nice framework for thinking beyond product innovation.

I've surreptitiously introduced another dimension as we think about opening up the innovation aperture.  The concept of a spectrum of innovation from small tweaks to existing products (incremental innovation) to completely new products and solutions that create significant change (disruptive or breakthrough innovation).  This is another way to think about opening the innovation aperture.  Not every product or service needs incremental innovation.  In a baseball analogy, we should be good at hitting singles and doubles (incremental) but we also need to take purposeful swings at the fence (disruptive).  As we open the aperture, we give people more clarity about the desired solution - the "what" of innovation.  A disruptive new customer experience can be just as valuable as a new product, and often more difficult to copy.  But being able to describe the anticipated goal, and get the team to understand and work to that goal is what's really important.  Because our ability to communicate limits the dilation of the aperture.

I've yet to meet an executive who only wants incremental product innovation.  They all want a range of innovation outcomes, both in terms of incremental-disruptive and in terms of Keeley's range of outcomes.  But they often don't know how to state what they want, or don't do a good job defining the desired outcomes.  When communication is poor or lacking, people hear the demand for innovation but don't understand the depth or breadth, so they choose a safe set of parameters and settle for incremental product innovation.  It's no wonder that so often new "innovations" look a lot like existing products.  Without better instructions, that's what the culture will lead people to create.

We can go further with this idea of the aperture, to think about the "how" of innovation. It's often not clear how much investigation or discovery of needs should take place, or how much research is necessary.  Teams often don't understand whether they should trust in their own ideas and technologies or open up to external firms, using so called "open" innovation.  The more we set out in our "what" and "how" conversations about innovation, the better the resulting outcomes can be.  Conversely, the less said about what and how, the lower our expectations should be.

Who ultimately controls the dilation of the aperture?  It's not just executives, not just managers but it's the entire organization in thrall to a culture of risk avoidance, consistency and efficiency.  All it takes is one strong voice to demand more clarity about the potential outcomes and activities to cause the entire organization to rethink how innovation is conducted.  Until that voice - or hopefully voices - rises up, innovation is conducted through a very narrow aperture, leading to very incremental solutions.
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posted by Jeffrey Phillips at 6:28 AM 0 comments

Tuesday, October 21, 2014

Open to adjacency

We work with a lot of firms to build innovation processes and culture, hopefully leading to the development of what we call an innovation competency.  Trying to get a larger, complacent firm to embrace the risk and uncertainty of innovation is not easy.  There are often many preconceived notions about what the firm and its people should do, where they should spend their time, what's "important" and what isn't.

But the truth is with the right coaching and a good set of tools and methods you can overcome a lot of learned avoidance, and actually create some good ideas.  Good ideas, that is, up until the point where someone asks the question:  Is this what a firm in (fill in the blank) industry should do?  What we have here is a predicate question - asking whether or not the firm should solve the problem, often before or instead of understanding if the customer has a need, and whether or not that need should be filled.  Whether or not a firm in a specific industry or market  segment "should" solve the problem is beside the point.  Either it will or it won't.  If it decides that the solution or offering is outside it's capabilities, well and good.  If the need is pressing and customers are willing to solve it, someone or some other firm will solve the problem.

Where this thinking matters is when an innovation team starts every discussion with:  is this what our firm or industry should do?  Too often there are preconceived, and very powerful notions, about what an organization should, or shouldn't do.  These notions argue that once a business model or industry focus or customer segment strategy is developed and perfected, all future opportunities should be viewed from this lens.  Nothing, my friend, can be further from the truth.

Imagine, since Apple is always used as an example, if Steve Jobs had said, "well, we are in the PC business, so no matter how terrible those little MP3 players are, and no matter how terrible managing music becomes, we can't solve that.  We are a PC company, after all!"  I didn't have the privilege to meet Jobs, but I'd like to think that he was able to see problems and needs in markets adjacent to his own, which he had the vision or technology to solve.  He believed that these needs were important and that customers wanted solutions.  He then asked:  even if we aren't in that business, do we have the underlying technologies, capabilities and relationships to be credible in that space?  He found that the answer was yes.  He didn't allow the fact that Apple was a PC company to keep it from identifying and solving vital and interesting customer needs.

Now, there's a fine line here between identifying and solving "adjacent" needs or extending capabilities or business models to new customers, and entering completely new lines of business.  Richard Branson is probably the only person I've heard of who succcessfully enters completely new lines of business.  He is innovating marketing and customer experience, rather than products and business models, so his model may be a bit easier to replicate.  But back to Jobs.  There are two other things that make this story compelling.  First is the fact that one of his first acts upon returning to Apple was to cut about 80% of the product line.  He simplified the product suite to focus more attention on fewer products.  So in some regard he compressed and consolidated the space he thought Apple should be in.  But then he looked for opportunities to use Apple's design capabilities, its customer experience, its ability to integrate and bring disparate items together to solve a number of problems, from the iPod to the iPhone and the iPad.  Apple wasn't initially a phone company, or a MP3 player company and many of its initial attempts to enter consumer electronics had not been successful (see the Newton).  But he didn't allow the organization to simply reject good ideas that solved customer needs that were outside of its cultural purview.  The other thing that Jobs didn't do is focus Apple on things it clearly couldn't and shouldn't do, however.  He understood the proximity of consumer electronics, cellular phones and tablets, and the distance between Apple and other factors like toaster ovens.  But one last thing you'll notice is that every innovation opened the door to another adjacent space.  For example dominance in handsets now means that Apple is relevant in payments and has released perhaps the most secure payments mechanism for individuals.  Would Apple be relevant in payments as a PC company?  Probably not, but it is relevant as a payments provider with a dominant marketshare in the handheld space.

On the other hand, almost every corporate innovation team I work with rejects a lot of innovation opportunities out of hand.  It's not in our business model, they'll say, or a "blank" company doesn't do that, or wouldn't be accepted if it did "X".  So they leave behind the most urgent needs customers define to pursue ideas that both they and their customers have less investment in. 

Can your leopard change its spots?  Can your teams identify and continue to contemplate opportunities outside your defined business model or sweet spot without complete cognitive dissonance?
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posted by Jeffrey Phillips at 8:01 AM 0 comments

Wednesday, October 15, 2014

Innovation is not a strategy

I've written about this concept before, but I believe it bears repeating:  innovation is not a strategy.  Strategies, according to Webster, are:
careful plan or method for achieving a particular goal usually over a long period of time
Your corporate strategy may be to become the leading provider of a specific product in your chosen market, or to be the most profitable company in your segment.  These are strategies, which then require definition of the direction, and some ability to measure and recognize when you've achieved your goal.

Now, imagine that we use innovation as a strategy.  In fact we don't have to imagine, it happens quite frequently.  Executives will say:  we need to be more innovative, as if that is a strategy.  What does this statement miss?
  • More innovative in what capacity?
  • What does "innovative" mean to you?
  • How will we know if we've been innovative?
  • What are the outcomes or results you seek?
 You can learn a lot by the answers you get when you ask these questions.  If the answers are:  we aren't sure, or, just get busy and we'll figure that out later, then innovation is window dressing.  In many cases I don't expect executives to be able to state exactly how much innovation should contribute to growth, or exactly how many new products it should generate, but at least provide a ballpark! 

One of the big problems with innovation today isn't in our ability to execute innovation, it's in our ability to direct innovation against interesting challenges that align to strategic needs and goals.  There are plenty of people who, if given the training and time, can develop interesting new ideas.  The real question for innovation is:  what problems are really important, and what new ideas are acceptable?

The challenge that many executives face, and the reason that strategy and innovation are so often lumped together, is that there is true symbiosis between strategy and innovation.  The more clear cut the strategic goals are, the easier it is for innovation to find ways to support and achieve the strategic goals.  Conversely, the murkier the strategy, the more difficult it is to define innovation programs or projects that matter.  This isn't to say that all strategies demand innovation.  They don't.  But many strategies have goals that require us to stretch our thinking or introduce new thinking to drive new results.  This is where corporate insanity comes into play.

Einstein said that insanity is doing the same things over and over again and expecting different results.  If we have the same strategies, and implement the same tools and methods to achieve those goals, expecting different or better outcomes, we may be falling into his trap.  However, it's exceptionally hard to change tools, methods and thinking in a company, and even more so when so much is on the line.  It's no wonder that executives revert to tried and trusted tools, hoping to squeeze out new ideas from exhausted but familiar processes.  It's even more difficult to do this when there's confusion between what is "strategy" and what is "innovation" and how they interrelate.

Strategy consists of goals that the company sets in order to grow or differentiate, and should have measurable outcomes.  Grow profitability 15% over three years.  Enter a new market and win 10% market share in three years.  These are strategies.  Innovation is a tool that helps you achieve your strategies when the every day tools can't or won't succeed.  In a specific strategy, say entering a new market and growing share, my existing methods and tools may help me achieve some of that growth.  But gaps may still exist between what I can achieve with my existing knowledge, products and solutions, and what I hope to achieve.  These gaps are perhaps some of the best use of innovation - striving to achieve a well-defined and accepted strategic goal by introducing new tools and new thinking.

If you paid attention to the definition of strategy above, you'll note one other factor that I've ignored till now.  "...over a long period of time".  Here's where innovation and strategy are similar.  Strategies aren't short term things.  You can't enter a new market and take significant share in few weeks.  Strategies are supposed to take work and evolve over time.  They are worth the investment.  Innovation is the same.  Innovation is not a tool that can be grasped in times of emergency or on an occasional whim.  Good innovation takes time to develop, time to change the culture, time to recognize the outcomes.  But while they share similar traits, it's easy to see that strategy is far more important than innovation.  Strategy provides the goal, provides the clarity and should provide the support and resources.  Innovation is the tool that bridges the gap between what's achievable with every day methods and what's expected.  Without clear strategy, innovation is just an interesting set of tools that most people find interesting but something of a distraction from real work.

There can definitely be strategy without innovation.  Plenty of business strategies don't require innovation, they require good execution using existing tools and methods.  Some strategies can only be successful using innovation.  But the reverse is also true in larger organizations.  It's very difficult to innovate if strategy is missing or unclear.
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posted by Jeffrey Phillips at 6:57 AM 0 comments

Tuesday, October 07, 2014

Innovation Prevention

If you've followed this blog lo this many years, you'll know that I specialize in two things:  trying to convince individuals, teams and organizations to do more innovation, often with a very tongue in cheek approach.  This post is no exception.  I want to talk to you today about the importance of preventing innovation.

Like Mordac, the character in the Dilbert cartoon series who prevents people from getting things done with technology, many times I have been Mordac, the preventer of innovation projects.  Mordac's job at Dilbert's company is to develop and sustain IT systems.  Inevitably, instead of making Dilbert's job easier through technology he makes Dilbert's job more difficult or impossible.  This is playing off the idea that many IT departments are roadblocks to new solutions rather than enablers.  In their defense, some of the IT projects they block are ill-conceived.  Others may seem simple to implement but would be difficult to support.  Still others require more or different resources than the IT team possesses.  So, sometimes, Mordac the Preventer is right.  Of course sometimes the projects he blocks are wrong.  Mordac (and your IT organization) occasionally block projects that should be implemented and that would add value.  Can we find a parallel between IT projects and innovation projects?

As an innovation consultant, it's my job to help my clients decide which projects make sense for them to pursue.  Unfortunately, it's also been my occupation to block innovation projects or to try to prevent them from happening.  This is usually because the client has poorly defined goals, inadequate resources or doesn't understand the market or solution they'd need to create.  To my great pride, I've helped block, prevent or delay a handful of projects, which I believe saved my clients time and money.

But more important than saving time or money is saving credibility.  If a client is just beginning its innovation journey, and lacks innovation experience, doing the project right matters.  Kicking off a poorly planned, poorly conceived project that has a high likelihood to end in failure, when the company doesn't have a lot of patience and is very risk adverse will end any future opportunities.  Where innovation is concerned, most organizations only get a few chances before the management loses interest and teams lose commitment, or start to believe they simply can't innovate.  In these instances it is better to suffer the small failure of stopping an innovation activity prematurely, to recast and replan the activity, than to conduct the activity and have it end poorly.

Client Example

Here's a recent example, redacted to protect the client.  Many of our clients have an "Innovation Week" in which they bring disparate people together to plan new products and design new projects.  One client asked us to help plan their Innovation Week event.  Since we've conducted other workshops like this, we were glad to oblige.  However, as we started to discuss the goals and anticipated outcomes it became clear that the client didn't have clear strategies, couldn't communicate what they wanted to happen in the event and couldn't define the outcomes.  We worked diligently with several key sponsors but could not get them on the same page.  A few weeks after we started planning everyone realized that the event wouldn't lead to a good outcome and might even frustrate attendees, and turn them away from innovation.  So we cancelled the event, and hope to schedule it in 2015, when we have better planning  and visibility.  While cancelling the event caused a bit of heartburn, it was far better to postpone and create a meaningful event that all the sponsors could back, rather than continue with a half-hearted innovation workshop.

Innovation Creator and Preventor

If you are an internal innovator, it's your job to find the most interesting problems and challenges and try to get your management team to sponsor innovation activities around these.  But it's also your job to prevent ill-timed, poorly planned or poorly resourced innovation activities from getting started.  I know it's tough to finally get someone excited about innovation, only to become the "wet blanket" that seeks to redirect or slow progress on an potential innovation activity, but treat each one like the only chance you'll get.  Eventually you'll want to get the point where killing an innovation activity is easy, a no brainer, and no problem because you have so many going on.  But when you only have one, and it's in the spotlight, you need to ensure it's done right.

When to prevent an innovation activity

There are a number of factors that can alert you to the need to slow or even cancel an innovation activity.  Those factors include:
  • Poorly defined innovation goals.  Simply saying that "we need a new product" or "bring me an interesting new idea" is not enough.
  • Vague or inadequate commitment of time or resources.  "Let's see how this goes before we commit resources" or "Why can't you have some good ideas in just a few days" are two statements that should cause you concern
  • Different definitions or opinions about definitions or outcomes.
  • Imposing a scope that avoids risk or discovery, which is virtually guaranteed to return a product or service that looks like the existing products or services
  • Lack of preparation, training and innovation skill development
  • Fear of failure, lack of experimentation
 If one of these risks exist, you have an innovation project that needs to be carefully managed.  If several of these exist, you may want to prevent, delay or postpone an activity until you or your management team can address these issues.  It's simple to run an innovation project, it's just difficult to run a successful one.

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posted by Jeffrey Phillips at 5:43 AM 0 comments