Tuesday, August 30, 2016

Shifting budgets from advertising to innovation

OK, I don't have a self-driving car and already I'm sick of hearing about them and their potential.  Just like I don't have a virtual reality headset made out of cardboard and an iPhone, but I'm tired of hearing about virtual reality.  The reason I'm tired about hearing about VR and autonomous vehicles is that they are overhyped technologies that don't yet solve important problems.  And this is one of the biggest challenges that innovation faces:  creating shiny new technologies that are interesting but don't solve society's challenges or problems.

We can ask ourselves a few questions about VR and self-driving cars, as examples of overhyped technologies.  The first one is an old one: quo bene?  Who benefits from the constant stream of hype that emerges around Virtual Reality (which isn't even all that new) or autonomous vehicles?  Why, surprise, the hype is being driven primarily by the manufacturers of these technologies.  VR, which as a technology has been around for at least 20 years, has simply repackaged itself for a new audience unaware that VR wasn't able to solve many problems two decades ago, and has simply repackaged itself as a "new" technology released from the mainframes.  Like Google Glass, the overhyped technology that didn't solve a problem and left the wearer looking like a dork, Virtual Reality so far doesn't solve mainstream needs.  Of course there are niche applications for VR, but right now the backers are making a much bigger play - trying to bring VR into the mainstream markets, tying it to iPhones and Androids.  Noticed many people out in the street with the gizmo fixed to their faces?  Even an application like Pokemon Go, which might benefit from this kind of technology, relied on the basic handset, and even it's flash in the pan moment seems to be ending.

This is a big problem for innovation, and why so many corporations distrust innovation as an approach to create new products and services.  Far too often innovation is led astray, to create shiny new technologies or promote technologies that have been on the shelf for a while.  Rather than do the real work of identifying needs and building solutions that solve real world challenges, innovators and technologists often build what they want or desire and try to sell it as a cure-all, a modern snake oil salesman.  This discredits real innovation, which has its basis in needs identification and validation, building solutions that matter and create value for people.  Right now these innovations, like VR and autonomous cars, are packaging technology and a lot of marketing to convince you that you NEED these capabilities.  Will the masses come?  For VR the marketing spend is past and it looks like the answer is: no.  VR has real applications in niche needs and industries, but so far we haven't seen a broad societal need that VR fills effectively. That's also because VR is a technology and not a solution.  We innovators must remember that the availability or discovery of a capability or technology is not an end to itself.  Good innovations must "cross the chasm" in order to get to the larger and more valuable markets.  Google Glass is a great example of a product that caused the early adopters to swoon, and left the early majority cold.

For innovation to add value, you've got to start with customer needs and expectations, what others call the "job to be done".  Then, create new technologies or repackage and repurpose older technologies to provide the benefits, and finally create a solution that provides value, don't simply offer a technology.

There's an adage that marketing and advertising the price you pay for being unremarkable.  I'd say aggressive advertising is the cost you bear for promoting a technology, rather than addressing a problem or need.  What if only a fraction of the money spend on advertising these technologies was spent on need identification and good innovation practice?  The outcomes would be incredible.
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posted by Jeffrey Phillips at 6:32 AM 0 comments

Monday, August 29, 2016

Innovation: management versus enablement

I love innovation.  I love all facets of it: the discovery of new needs, the creativity to discover new solutions, the realization of those new ideas as new products and services.  What concerns me sometimes is the way in which we attempt to implement innovation, because we are likely to constraint it at just the time we need the most innovation.

You'll see a lot of talk about "innovation management".  This is not necessarily a wrong idea, but in the wrong hands will severely limit innovation activities and outcomes.  We managers and executives, trained in the school of efficiency and with our MBAs in tow believe we can "manage" anything.  In to some degree that is correct.  We can manage and improve things that are well defined and understood.  To some degree we can even put guardrails around things we cannot fully understand or define.  But the risk we run when we talk about managing innovation, is that we become entranced with the idea of "managing" and not with the idea of "innovation".

In many corporate settings where we've done innovation consulting we see this play out over and over.  Managers and executives want and need stability, repeatability, predictability.  They want the outcomes of exciting, disruptive innovation without the variability and costs associated with what happens in the wild.  As experts in managing things, their first habit is to codify, define, and provide governance and structure to an activity that most don't fully grasp or understand.  Rather than attempt to fully explore the innovation possibilities, managers first attempt to get a handle on what they believe innovation is, and how it should be conducted, managed and governed.

As I've said, this is a very fine knife edge to walk.  Large corporations cannot survive with wild hare ideas sprouting everywhere and little definitive structure or guidance.  They simply don't work that way, and funds and resources don't flow to exercises that reflect those attributes.  But on the other hand, focusing too much on the managing aspect leads to constraints, rules and bureaucracy that will close the aperture for innovation and result in a well-governed, well-defined process that cranks out predictable ideas.  Which sounds something like your product development process, and that's a problem.  Most firms can't get well defined solutions out of their product development process fast enough, much less generate new and interesting ideas quickly enough, yet their first notion is to place the same "management" and overhead on innovation as they do on product development.

Now, this diatribe may sound interesting from a person and team that has argued for years about defining an innovation process.  And that's the other side of the coin.  You need to have just enough defined process in order for people to innovate effectively without creating bureaucracy and limiting exploration and risk.  Since there's exceptionally little commonality about how people generate ideas or shepherd them into new product development cycles, some definition is needed, some skills and tools are required.  Perhaps we should call this "enablement" - we are enabling people to learn new skills, define new processes, explore new needs - rather than "management", which seems like adding overhead without adding benefits. 

It's in our nature as managers, executives, experienced in the ways of business and pounded into our heads as MBAs that we need structure, process, governance, details.  These management attributes limit variability and exploration, and constrain innovation.  While we need just enough of these to be - wait for it - minimally viable for innovation, we also need enough enablement, expansion, divergence to allow people to come up with and explore great ideas.  There's more than enough management attitude in our genes and experiences, and not nearly enough enablement.
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posted by Jeffrey Phillips at 7:56 AM 0 comments

Friday, August 19, 2016

The basket of bad ideas scenario

So, over my resistance, my teenage son encouraged, no demanded, that we go to see Suicide Squad, the latest in a series of "superhero" movies intended to entertain us and drive profits for Hollywood.  Much as I expected, the movie was poorly plotted, poorly acted, a virtual pastiche of every hero movie ever made.  You could basically predict every scene, what key actors would say or do.  The movie made no sense, had no suspense and key characters (what was that crocodile thing anyway, or why does a guy with a boomerang qualify as a superhero) had little or nothing to do.

This is what you get when you scour the back catalogues of comic books, looking for ways to extend the franchise just a bit more.  This is what it looks like when you've run out of good ideas, out of plot lines and say to yourself - well, we have a number of not so hot ideas, let's throw them into a blender and see if they look better all mixed together.  A good movie, The Big Short, noted that this same philosophy, mixing up a number of bad loans into a new package, is what caused the sub-prime lending disaster.

So yes, I come to complain about Hollywood, which has lost all of its sense of creativity and wonder in search of ever larger CGI work and explosions, who can take good actors like Will Smith and have them sleepwalk through their roles.  This increasing reliance on comic book characters fighting ever increasingly improbable extraterrestrial monsters has reached and surpassed the tipping point - we've exhausted the concept.  But I'm sure there's more coming.

This concept of a basket of weak or bad ideas is not practiced just in Hollywood, however.  Far too frequently we see the same concepts practiced in corporations and in governments, where people and processes are too exhausted to identify new needs and generate new ideas.  Rather, they scour the back catalogues and overlooked ideas to come up with a melange of past due or weak ideas that can be baked into a "new" concept and offered to the world as a new solution or idea.  It's often far easier to simply package a bunch of outdated and barely relevant features, concepts and options and pass it off as a new solution, rather than do the interesting and valuable work of understanding trends, gathering needs and generating new insights and new ideas.

I'm concerned that some of the firms that were once good innovators are heading in this direction.  Two decades ago Steve Jobs cut the lion's share of Apple's product lines and bet the company on the iPod, iPhone and iPad, along with major upgrades to the Mac.  Today, we are getting tired, repackaged "smart watches" and hints about Apple cars and other devices.  Did Apple runs its innovation course when Jobs left the scene?  Do they have the energy and enthusiasm to create some really incredible new products and solutions?  Time will tell, but the iWatch and the lack of pronouncements this year fuel speculation that Apple has exhausted its good ideas.

Why do firms, like movie production houses, balk at creating new ideas and go back to the well so often, relying on poorly conceived ideas that were passed over in previous projects?  Why does a movie company feature a number of second and third tier "superheroes" in a movie whose plot appears to be stolen from Ghostbusters?  The answer lies in misunderstanding the audience, and in the fear of failure.  First, the audience for movies has rewarded Hollywood in the past for good superhero stories, like the reboot of Batman and the first Iron Man movies.  These felt fresh, new, well conceived.  They were main characters that were reasonably well known, with a history and backstory.  In both cases the producers went back to the origins, showing how Batman and Iron Man were created and why they exist.  As we move forward in time, the movie producers lost focus, cranking out more and more superhero stories which have increasingly little empathy, backstory or even coherent plot.  They are exhausting themselves because they are offering what it appears customers wanted.  But we customers have become more sophisticated, and the superheroes have become less interesting.

But the main driver for Hollywood and other industries is the fear of failure.  They'd rather fail by overextending a storyline or overusing the superhero theme than in creating a new concept or story.  If a movie like Suicide Squad fails, the producers can act surprised and claim that other superhero movies have worked in the past, so this one should have as well.  If a new idea fails, then you've got little foundation or past to stand on.  These last few years all we've gotten from Hollywood are reboots, reworking of old movies (a new Ghostbusters as an example) but little that's fresh, interesting or new, and certainly nothing that's innovative or tells a good story.

We typically counsel our customers that the first activity of any innovation project should be to clean up the zombie ideas.  These are ideas that no one has been willing to fund, and no one has been willing to kill. They simply hang around, taking up space, requiring further review, without ever moving forward.  In any innovation activity management will first require the team to review and consider the zombie ideas, since they exist and are often like other, more successful ideas from the past.  The mere existence of the zombie ideas gets in the way of doing something new, and makes doing new ideas seem more risky than it really is.  Further, packaging a bunch of really meager ideas into a new solution and calling it innovation is almost certainly a recipe for failure, and not a good failure where you might take a chance and learn something.

At this point the movie producers either need to go way back and find new characters that can become interesting main characters and build a backstory and create a real story line, investing in the development of characters or stories, or perhaps find a new genre to mine and exhaust.  Perhaps its time to go back to Westerns or sandals and togas for a while, because repackaging minor superheroes seems tired and outdated, it isn't working.  It won't work for Hollywood and it won't work in other industries either.
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posted by Jeffrey Phillips at 6:39 AM 0 comments

Monday, August 08, 2016

Do you speak my language?

I stumbled upon a nice article that deals with a very important issue for any corporate innovator:  how to communicate what you are doing, why you are doing it and why it matters to executives.  The article was published in the MIT Sloan Management Review and is entitled When innovation meets the language of the corner office.   The article notes that innovators often use different terminology when describing their work or tools (eg customer experience journey) and have different deliverables, project expectations and time frames than other, more traditional projects.  Because of these differences innovators may never succeed in communicating to their executive team or corporate executives or may simply sound like they are using new, unfamiliar languages when they seek financial investments or approval on new ideas.  Is communication a big deal?

I think so.  Paul Hobcraft and I built the Executive Workmat, which outlines 7 key factors for sustained innovation success.  While factors like Strategy and Culture were important, the factor that we found knit all the other factors together was communication.  Communication is a top-down and bottom-up issue, as well as a function to function horizontal issue as well.  Innovators, executives and others fail to communicate effectively in all of these dimensions.  The author of the article I referenced above is really only considering one aspect of communcation:  bottom-up, innovator to executive.  This communication is about planning, progress and accomplishment. Innovators must report regularly to executives, to identify projects, outline progress and report results.  Many times these communications are difficult, because innovators use new and unusual tools, have unusual deliverables.  Executives expect to hear about definitive outcomes and potential ROIs, so the two seem to talk past each other.  This communication failure is important.

Just as important, and not covered in the article, is top down communication, executive to team, which is about scope, priority, expectations and permission, communication that creates an opportunity for innovation and restraints or refocuses the culture.  This communication doesn't happen once, but should happen constantly if executives hope to build a culture and sustain innovation.  This means they need to be talking to innovation teams, of course, but also to the corporation at large.

The third type of communication that is important is what I'll call horizontal communication, team to team, function to function, which is often about setting expectations, getting help or assistance, understanding existing customer needs, helping to prototype ideas and attracting people to assist on an innovation activity.

Think about the plight of the corporate innovator.  It's a tough job, trying to create new things in an organization and process model that's honed to sustain existing things.  Expectations, language, rewards structures, strategies, personnel, everything is aligned for sustaining not inventing.  It may seem strange to focus on communication, but good communication is perhaps the most powerful motive engine.  What executives communicate, and follow up, changes what managers emphasize.  What innovators communicate (effectively) changes what executives invest in, regardless of other priorities.  Communication, top down and bottom up matters, because communication impacts culture, and culture influences both formal and informal decision making, resource allocation and a host of other activities.

When any team is doing something new and risky, they first perfect their language.  No one wants to be guessing about the meaning of a word or phrase in the heat of an important activity.  Clear, concise communication, readily provided and easily understood is critical.  Thus, if innovation introduces new language, innovators need to put their requests or communications into language that their executives understand.  Likewise, if communication influences culture, then executives must make clear where they stand on innovation and the risks and commitments they expect.  Good communication matters when setting the stage, establishing the need and communicating the results.

The problem with this is that no one "owns" language and everyone has their own interpretations about what words and phrases to use, and even their own definitions and expectations about what words or phrases mean.  If you doubt this, consider the last corporate meeting you attended.  Afterwards attendees picked apart the discussion and interpreted the meaning and nuance.  If this happens in the course of your regular, day to day operations, imagine how difficult good communication must be for innovation.  This diversity of opinion suggests that unless a company is INTENTIONAL about its language, unless it specifically sets out a way of communicating, defining channels, messaging and intent, language won't change, and communication will be less than adequate.

Good communication must be sponsored by the executive team, which is another bone to pick with the attached article.  Of course innovators must put their tools and methods into context, but there are many potential innovators and each faces a unique set of challenges.  One of the last things they are likely to think about is communication.  On the other hand there are few executives and they should be encouraging innovation.  Executives shoulder the larger communication burden when it comes to innovation, defining their expectations and outcomes, providing permission for people to try and fail.  If you want to know why executive commitment and involvement in innovation is so important, look no further than these three aspects of the Workmat:  Strategy, Culture and Communication.  If executives aren't engaged in these, they will not change.

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posted by Jeffrey Phillips at 5:46 AM 0 comments

Tuesday, August 02, 2016

3 yards and a cloud of dust

In the spirit of the upcoming football season, I thought it would be interesting to look at the game of football and consider how innovation has dramatically changed the game over the last 20-30 years.

In the old days, before the American Football League, many sportswriters and commentators felt that a lot of football could be described by the title of this post:  3 yards and a cloud of dust.  Most football, at the collegiate and professional level, relied on running the football.  It was only as the new American Football league was created that passing the football became more popular.  In the old National Football League, it was often said that only three things could happen when you threw the ball, and two were bad.  By this they meant that the quarterback could 1) throw to a receiver and miss or have the pass dropped 2) could throw the ball and have it intercepted or 3) could throw the ball and have it caught for a substantial gain.  The first two, needless to say, are bad.  These negative potential outcomes and comfort with the established processes and thinking dominated and kept the game on the ground.

It was football innovators and showmen who opened up the offense, by encouraging the forward pass.  Building an offense around passing was an innovation, and completely within the rules.  The forward pass had always been an option, but it took some new owners desperate for an audience to open up the game.  Of course as the old NFL watched the younger league gain viewers, and build quarterback heroes like Joe Namath, they too wanted a piece of the action and started bringing more passing into their offenses.  Today, the percentage of passing plays versus running plays has reversed, with far more passing plays than running plays.  Perhaps soon we'll see another set of innovations from people who are trying to reinvent or revive the game.  The new innovators, strangely enough, will most likely come from the college ranks - for example you can look at what Oregon is doing with its emphasis on speed.  The NFL has become too profitable to embrace too much innovation - in fact one could argue that as it becomes more profitable it becomes more conservative.

Football and its adoption of the forward pass are a lot like corporate innovation.  Three yards and a cloud of dust was a safe approach to winning, when football was based on safe offensive and strong defense.  A running play normally net about three yards, and a consistent offense could move the ball rather predictably.  They may not score a lot of points but they wouldn't create errors or lose ground.  Three yards and a cloud of dust could just as easily describe the very incremental innovation that most firms are completely comfortable with.  The innovation most companies practice is safe, simple, repeatable and incremental, creating yet another revision to an existing product or service.  There are no great moonshots but no great failures.  Most larger corporations allow new entrants or third parties to do the real big innovation, and then they hope to copy, purchase or co-opt the innovation once the market demonstrates its interest, just as the NFL eventually merged with the AFL.

Executives are a lot like coaches:  they want to win at the least possible cost, and think that defense is safer than offense.  A lot of coaches with a number of sophisticated offenses have entered the NFL.  Only a few, including the New England Patriots, the Denver Broncos and a handful of others, have attempted to dominate on offense, and even then both the Patriots and Broncos have good defenses.  Similarly, corporations prefer to defend existing markets, products and share, rather than create new, risky products that customers may not like or that may be too early or too late in a market window.  Thus, it is thought better to provide an acceptable product and scale quickly to drive down costs, while amping up marketing and promotions, to defend existing products and customers.  Force the competition to introduce something new and interesting, to upset the apple cart, rather than disrupt your own markets and products.  What these companies fail to realize is that competition now comes in all shapes and sizes.  Some competitors will want to compete head to head, feature to feature.  Others will be happy to chip away at specific capabilities or features.  Others will focus on specific channels or geographies.  The existing defense is not nearly as good or as capable as it was in the past, not because your defense is lacking, but because the number of competitors has increased.  In football, it would be similar to a defense maintaining an 11 man team, while the offense keeps adding players beyond 11, some of whom don't even plan to follow the accepted rules.  The defense is left complaining about the change in rules or unfair participation, while the offense goes on to score repeatedly.

There's a few things we can learn from these football innovators. First, the things we used to fear may be the things we ought to embrace. Rather than resist the forward pass, it may be time to embrace it.  Second, as we and others embrace the pass, others learn to defend against it, so that means we'll need to innovate again in a rather short period of time.  And again after that. Innovation becomes a constant.  Third, defenses increasingly will respond more quickly to innovations than they have in the past, so any innovation is likely to be short lived.  Fourth, as the NFL show us, the more profitable you become, the more you may resist innovation, because it may cut into profits.

Unlike football teams however, who are restricted to a specific size field and a specific number of players, corporations can dramatically reshape the competitive landscape, attacking from multiple angles with a range of partnerships and channels.  Innovation should be happening across types, outcomes and timeframes, which could radically change the way customers perceive leading innovators.  Yet too often corporations act and innovate as if they can only work with specific field definitions, only in one direction, only with incremental innovation, only with the approved, allotted team.  Football is infinitely more innovative than most corporations, with far more restrictions.

Another factor about football that's instructive to innovation is the idea of synchronicity and teamwork.  For a play to work well eleven different individuals, with vastly different skills, all must execute their jobs in tandem, often reacting to events or actions by the opposing team that weren't expected.  Innovation teams must have the same ability to work closely, act quickly and be prepared for a number of different alternative outcomes, yet they rarely practice and are often filled with many people with the same experience and skills.  Thus, innovation is often a start and stop activity, as the team gathers itself to conduct another step in the process, rather than a fluid activity anticipating and reacting to events.

Corporate innovators could learn a lot about innovation by studying and implementing many of the ideas that flow from collegiate and professional football players, while carefully considering the emerging resistance to innovation that is occurring at the highest echelons of the league due to a desire to protect profits.
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posted by Jeffrey Phillips at 5:46 AM 0 comments