Monday, January 16, 2017

Signal versus Noise

The post today frames a classic issue in communications:  how to improve a signal and hopefully eliminate or at least mitigate noise.  The noisier the communication is, the more difficult it is for the sender and the receiver to communicate.  Thus, we try to eliminate noise from the communication, so only the signal is received.

That sounds easy, but it is actually difficult, because there are no pure communication media.  Noise always creeps in, and conflicts or masks the signal.  This is true in electronics - the noise on your cell phone or fuzziness on your TV screen - as well as in business and life.  Our verbal communications, whether face to face or over a communication infrastructure, are full of noise.

The attempt to eliminate noise from an operating system or a business process is an interesting and perhaps worthwhile challenge, until one considers the question:  what is the real signal?  What is creating the noise?  In many businesses today, there are several signal: noise conflicts. These include:
  1. What management says it wants versus what it reinforces
  2. What the operating systems support versus what is needed
  3. The amount of risk that is encouraged versus that which is tolerated
It begins to raise the question:  is innovation noise, or signal?

Strategic need and communication

Let's start with a classic issue:  sending a signal that isn't meant to be received or implemented, or worse failing to understand that a signal isn't correctly received.  Many executives have concluded that innovation is important and must become a cornerstone of their business strategies.  However, they have little understanding of how innovation works.  To them, innovation must seem like magic pixie dust:  sprinkle it around, encourage it and new innovative products will spring to life.  So, they take to the lecterns and advocate for innovation, but don't change deliverables or goals or investments.  So people hear about innovation but don't see the requisite change in risk attitudes or investments, so they become conflicted.  In this case, innovation is NOISE introduced to a consistent SIGNAL that is business as usual.

What actually gets done

What's worse, perhaps, is that some new, good ideas may get created by resilient innovation teams or individuals. But those new ideas will encounter all of the existing measures (ROI) and decision making gates that expect fully formed, fully proven products rather than nascent, unproven and risky ideas.  Processes that have been honed to perfection, where randomness, variability and risk have been eliminated, treat innovation as NOISE, while consistency, efficiency and predictability are the SIGNAL.  We place filters in these communication programs to eliminate NOISE (innovation) and improve business as usual (SIGNAL).

What the market signals

However, at the same time the market and customers are signalling needs for new products and services. They do this by preferring new products that meet unmet needs, expecting lower prices for products and services that become commoditized, and shifting alliances to solutions that understand their journey and expectations.  The markets and customers are constantly signalling their needs and expectations, but too often we listen through filters of 1) past experience, 2) the investment we have in existing products and 3) the risk and change associated with creating new products.

In this case there are actual signals, clear signals of the need for new products and services that are ignored or filtered out by the way corporations listen (if they listen) or respond to customer requests and market trends.  In this case clear signals are either ignored, filtered out or overcome by the NOISE of business as usual.

Many people would like you to believe that innovation is difficult.  Nothing could be further from the truth.  Innovation, creating new ideas that become new products and services is easy.  It happens all the time, across the globe, every day.  The real challenge to innovation is cultural, both on the corporate side and the consumer side.  And a real underlying issue within those cultural challenges is the inability to distinguish signal from noise - in other words, to communicate. This occurs both internally (as we've seen:  what management wants versus what it supports) in the operations (what we reinforce - efficiency and what we resist - creativity) and what we hear from customers and markets.

To succeed at innovation, there are some very simple rules:  What executives say, matters.  They must both say they want innovation and then reinforce the desire with new investments and priorities.  What business as usual dictates and expects, matters.  If efficiency matters more than innovation, you are communicating a value proposition.  What customers and markets say, matters.  Are you listening?  Or are you filtering to hear what you'd like to hear?  Can you separate signal from noise?

Perhaps the most important first step of any innovation activity is to ask:  what signals are important?  How are they received?  How can we amplify and clarify the important signals? What do we filter?  How can we listen, hear and respond more effectively?
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posted by Jeffrey Phillips at 6:48 AM


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