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  It's often far easier to simply package a bunch of outdated and barely relevant features, concepts and options and pass it off as a new solution, rather than do the interesting and valuable work of understanding trends,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

Thursday, July 28, 2016

What Dollar Shave Club's success says about innovation

I read today a rather rambling and confusing piece in the New York Times about Dollar Shave Club.  The article, entitled $1 Billion for Dollar Shave Club: Why every company should worry, can't seem to hit its stride or find a point it wants to make.  At first I thought the piece was going to congratulate a disrupter, Dollar Shave Club, who, despite the odds, grew a startup business to the point where Unilever acquired it for $1 billion dollars.  Dollar Shave Club did this in the face of overwhelming odds, taking on a deep pocketed corporate behemoth (and noted innovator) in Gillette and P&G.  I was sure this was going to be a story about the new innovations unfolding in customer experience and business model.

Instead the author seems concerned that new innovators are capitalizing on technologies and (horrors) merging those capabilities and technologies into new offerings and solutions.  While acknowledging the idea of creative destruction, doesn't he recognize that these mergers and new products were bound to happen?  Were the past solutions somehow better?  The market and the demand generated by Dollar Shave Club indicate that better solutions and offerings were possible.  He notes how Uber succeeded based on smart phone technology, the internet and location tracking.  All of these technologies were available to the existing corporations and to any potential startup, and most have been evident for over a decade.  The winners were companies that managed to merge the technologies and capabilities in a way that addressed unmet customer needs.  This is classic innovation.  The fact that larger companies refused to see the opportunity, or worse, saw the opportunity and recoiled from the risks, is beside the point.  Good ideas will be implemented by someone, either an existing competitor or a new entrant.  The market is mostly agnostic to the individual or company that provides the prevailing service.

Or, look at this another way.  Perhaps Unilever saw the opportunity but let Dollar Shave Club become it's prototype, knowing that if DSC succeeded, Unilever could simply acquire the company, letting venture capitalists bear the investment risks.  Acquiring a rapidly growing company is smart business as well - who doesn't benefit in this scenario?

Perhaps my favorite paragraph is just at the beginning of the article, where the author writes:
The deal anecdotally shows that no company is safe from the creative destruction brought by technological change. The very nature of a company is fundamentally changing, becoming smaller and leaner with far fewer employees.

Is this actually news to anyone?  The more we automate, the more we streamline and the more we outsource key functions, the smaller corporations can become.  And, hopefully, the more flexible, more nimble, more responsive and more innovative they can become, because that's what's required to survive.  Rather than simply looking at the downside of the changing economic models, let's consider the upside as well.  Yes, automation, innovation, globalization will change the large, somewhat paternalistic corporate model.  Here's where the article makes a new point:  the problem is inequality.
The wealth will be spread among a few. Dollar Shave Club has over three million subscribers but only about 190 employees. Its razors were made in South Korea by Dorco. Distribution was initially handled in-house but eventually was contracted to a third-party company in Kentucky. What remained was a terrific design, marketing and customer service shop; and a business that was easily expandable to meet demand and that had a good niche with men who do not like to shop. These super-successful companies with few employees should worry an America struggling with inequality.

Ok, so the founders and employees and venture capitalists who took a big risk will get a nice reward.  Good on them!  The author doesn't note that for every startup that succeeds like DSC, probably 10 to 15 fail completely, leaving the founders worse off than before, never mind the other issues with inequality generally.  What's the solution?  None is provided in the article, but what we should be doing is trying to create far more innovators and entrepreneurs, removing and reducing barriers to creating businesses, finding new ways to get more venture capital into the hands of people who want to create companies and jobs.

But here, in fact, is my favorite sentence in the whole article:  But the internet, mass transportation and globalization destroy everything.  Really?  The internet, which allows us to interact with anyone on virtually any device anywhere, which enabled political revolutions and offered us such incredible solutions as Amazon and Facebook (I kid) destroys everything?  Or does it enable new products and services?  And what's mass transportation got to do with shaving?  Does the author dislike receiving his books, clothes and increasingly meals via UPS or FedEx?  And, of course, the final whipping boy, globalization.  What's the answer - to refuse to trade with other countries?  David Ricardo did the original work on comparative advantage over 200 years ago.  Work and jobs will flow where the costs are lower.  Globalization allows people around the world to compete, and it raises standards of living globally.  But we are told that the internet, mass transportation and globalization destroy everything.

We can rail at the coming of the night or we can harness the best of the change that's coming.  Rather than fight the innovators, let's enable them.  Rather than accuse the internet and globalization, let's embrace them, because we can make it so everyone benefits.  Creative destruction is real, but it is not a zero sum game. As has been true in the past, large corporations that cannot compete or reinvent themselves will be shunted aside for those that can.  Where is the anguish for Sears Roebuck, or Tower Records?  Does the author find that the innovations that replaced them are wrong or full of inequity?  Is Amazon terrible because it replaced Borders?  Who makes the call as to what is right or wrong?  Ultimately the consumer does.

What to do?  Create far more opportunities for innovation.  Expect disruption - as more people get access to more technology and more connectivity, more new ideas will be created.  Large corporations don't have a right to exist, they have a right to compete.  But the best ideas, from any origin, will usually win.  Inequality results from too little opportunity, not from too few ideas.  Through trade and globalization, the world is getting smaller, but we have access to many more consumers and markets.  There is significant opportunity out there for any innovator. 
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posted by Jeffrey Phillips at 5:29 AM 0 comments

Tuesday, July 26, 2016

What Kipling has to say about innovation culture

There's a poem I love, that we post-modern types aren't supposed to love, because it was written by a colonialist Victorian, which by itself is almost enough to discredit any literature.  I'm talking today about the poem "If" by Rudyard Kipling.  If is a poem about keeping your wits about you when others are losing theirs, and keeping your course and beliefs when others doubt you.

I think If should be mounted on the cubicle wall or meeting space or prototyping lab of every person who claims to be an innovator.  There are a couple of passages that especially ring true for me.  The first one is:

If you can dream—and not make dreams your master;
  If you can think—and not make thoughts your aim;
If you can meet with Triumph and Disaster
  And treat those two impostors just the same;
 Innovators must be able to dream - to think about new products and services, to imagine new business models.  Simultaneously they must make those dreams realities - come back to earth and figure out how to recognize those dreams as new solutions.  And in doing so, innovators will meet with both Triumph and Disaster, Disaster more frequently in fact.  As long as you keep the disasters or failures small and cheap, then you are experimenting as you should.  A final note on this passage:  many, many companies have succeeded once and had a Triumph.  That alone does not make them an innovator.  It means they were lucky, or in the right time at the right place.  Too often this Triumph, as Kipling calls it, leads to complacency and arrogance.

Later in the same poem Kipling writes:
If you can make one heap of all your winnings
  And risk it on one turn of pitch-and-toss,
And lose, and start again at your beginnings
  And never breathe a word about your loss;

Kipling understood that we need to achieve a balance, sometimes taking big risks and accepting the outcomes.  Innovators understand this, but corporations don't.  Corporations have tried to mitigate, manage, re-mediate and eliminate risk, and in doing so have created cultures and employees which recoil from risk and uncertainty. Kipling was looking for people who could accept and even embrace risk, understanding the possibilities, both the rewards and the potential loss, and reasonably unaffected in either outcome.  Over the years we've built organizations that are predictable and dependable, but in doing so we've lost the ability to dream and take risks, or even understand how to embrace risk.  In this loss, we've lost a lot of what should be an innate ability to innovate.

Of course Kipling was putting into words the concept of the English "stiff upper lip" where one was expected to "never complain and never explain".  But there's a lot in If that relates to the requirements and demands of a people and culture that hope to innovate.  Innovators have to ignore the conventional and shrug when others question ideas or motives.  Kipling addresses this social ostracism that many innovators can feel:

If you can trust yourself when all men doubt you,
  But make allowance for their doubting too;
If you can wait and not be tired by waiting,
  Or being lied about, don’t deal in lies,

In a society that was as cohesive and orderly as the Victorian age was, it must have been quite a thing to read If in its day and recognize that a person with strong ideas could stand apart from the collective crowd.  Today, in some respects it is easier to do that.  We are encouraged to "go our own way", to put a ding in the universe.  Yet even today the Steve Jobs of the world are rare, because there is still a great deal of conformity and group behavior in our society and in our corporate cultures.

Until and unless we as individuals follow the precepts of the ideas behind If, and our corporate cultures lose resistance to new or different ideas, it will be difficult to conduct really interesting innovation.  As with much in life, innovation starts from a desire, which is lived out personally and then professionally.  If these ideas are supported and nurtured individually and collectively, we'll have more innovation.  As they are constrained by any one of us, or all of us collectively, we'll never innovate and the innovations that do happen will always be considered disruptions of the existing order.  Why do you think really interesting or radical innovation is called disruption any way?

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posted by Jeffrey Phillips at 6:11 AM 0 comments

Friday, July 22, 2016

Like nothing you've done recently

Sometimes, when you are in the middle of an opportunity or problem, you are left dumbfounded by how hard it seems to get a new perspective, or how difficult it is for others to understand the scope and complexity of the problem.  This struck me the other day about innovation.  Even after over twelve years of innovation consulting, I'm still constantly learning.  It struck me how difficult innovation is for large, especially successful, corporations.  They struggle to understand innovation, to comprehend it, to do it successfully.  In many cases that's because innovation is like nothing they've ever done or seen before.  And, until you are ready to see something new, and not just see it but embrace it, then your old way of seeing and thinking and operating is going to prevail.

Part of this monologue that will follow was initiated by discussions with clients, and I'll get to those points in a second.  But part of it is sparked by the current Republican political convention.  I wish I had a dollar for every time someone said that this convention is different or unusual, or that they've never seen anything like it.  For good or bad, Trump and his surrogates aren't just breaking the mold, they've completely ignored it, sometimes to their benefit, sometimes to their detriment.  The media, comfortable and familiar with the old mold, struggles to understand.  I'm not here to praise Trump, and much of what he and his team are doing doesn't make sense to me.  But this is like something we've never seen before, and it's causing a lot of confusion, consternation and over analyzing.

Corporations and their innovation teams face the same problems, but with a more positive spin attached.  While one can question the wisdom and purpose of the Trump ticket, innovation by all rights is beneficial, drives revenue.  Corporations should want to do innovation, and as much and as fast as possible.  But they struggle, because innovation (especially disruptive innovation) is unlike anything they've seen recently.  Note that I said recently - every firm was once an innovation, and perhaps even disruptive.  It's just that as they age they lose the willingness to disrupt and become more interested in defending existing share.  How is innovation unlike anything they've done recently?

Acquiring Help

Start with simply finding partners to help them succeed with innovation.  So many of our "sales" discussions devolve into educational discussions, where we as innovation "experts" try to help our clients define their purpose and scope, and then try to align our expertise and capabilities to that scope.  Most corporate buyers are familiar with setting a very familiar scope and getting a very specific, often quantifiable deliverable.  Neither of those happen all that frequently with innovation, meaning even the acquisition process is unlike anything the company has done before.

Defining Trends and Customer Needs

Most corporations have some sense of what's likely to happen in the next quarter or two, but don't really investigate major trends and the impacts they are likely to have on customers, prospects and the industry at large.  So they are constantly surprised by "sudden" shifts that have been happening for months or sometimes years.  They simply haven't done the job of watching, understanding and predicting trends, and understanding the implications.  In the same vein, many will argue that they understand customer needs very well.  I'll argue that they understand customer needs about that company's products very well, but can rarely define the next iteration or define the adjacent market opportunities with any degree of certainty, and simply cannot describe the important unmet needs customers have.  Most haven't done it before, and don't have the tools to do it well.

Generating really interesting or disruptive ideas

Anyone, from the lowest paid employee to the CEO, can generate ideas about existing products that make them slightly better.  Few people can dream up ideas about new products or services that aren't in the existing product suite, or that address adjacent markets or unmet needs.  It's simply something the vast majority of the team doesn't do on a regular basis, and probably think they aren't supposed to do even if they have the skills.  Efficiency and effectiveness suggest that sticking to the existing knitting is far more important.

The acceptable source of ideas

In many organizations, there are only a certain number of acceptable sources or fonts of ideas.  Perhaps its a layer barrier - people below a certain level aren't expected to generate good ideas, and so any ideas they generate are ignored.  Or perhaps its only people from the R&D team, while operations is expected to focus only on incremental improvements.  Many people simply haven't been called on to generate new ideas, especially outside their work scope.

Evaluating and Funding

The governance and budgeting process is really a good place to look at issues that will arise in the never done that before.  Governance and budgeting is highly tuned to review and approve budgets, products and projects that are modeled on past successes.  When you introduce a new approach based on new tools and no prior success or funding, the processes respond with:  we've never done that before.  And while they are correct, this isn't an acceptable answer.

On and On

I could go on and on about how innovation is like nothing your firm has done before, or recently.  That's why it is so valuable and such a leap of faith, and why it is so difficult to do.  You have a couple of choices here:

  1. Fit innovation into a scope that reflects what you do regularly and are comfortable with, which means only incremental ideas will be produced.
  2. Surrender and outsource all your innovation to a whiz-bang innovation firm, which is likely to mean you'll get more interesting ideas you simply shoot down later in the process
  3. Learn how to do stuff that makes your existing process and people uncomfortable while you start training them and defining new processes and rewards that encourage innovation, and make innovation something you do frequently, and recently.

Encountering important things that you've never done before can be quite daunting, because it's a high wire act with a lot of potential for failure.  Too often existing cultures will simply try to make things they haven't done look like things they have done, and will be dissatisfied with the results.  You've got to build teams and cultures that are willing to not only do, but embrace activities, markets and ideas that they haven't done before.  Or they'll be left with declining market shares and profits, secure in the knowledge that they've done it all before.
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posted by Jeffrey Phillips at 5:35 AM 0 comments

Monday, July 18, 2016

When no one wants to innovate

Over the last few weeks we've taken calls from several potential clients, all of whom seem to have an unusual problem.  An executive or even the CEO has asked their teams for innovative new ideas and solutions, offered support and promised rewards, but after several weeks of communicating this new approach, no new ideas are forthcoming.  After puzzling over the issue for a week or two, we get a call.

The conversations go something like this:  "We've told our folks we need more innovation.  We've promised to reward them for their ideas.  We communicated this through email or other means.  Yet here we are, four or five weeks into an innovation program, and we aren't getting any ideas.  What's going on?"  And we talk to them about past innovation efforts, to discover that this often isn't the first time that executives have asked for ideas.  In doing the autopsy of past innovation efforts it's often clear that while executives asked for ideas, they didn't really value them or consider them, didn't fund the work or implement ideas.  So, when people refuse to play the same game again - even though the management has changed - people are perplexed.  Why won't people innovate when we tell them we need it?  There are at least eight items to investigate to understand what's going on:

1.  Has this request been made before, and what happened when people presented ideas?  Companies are like elephants:  they are large, resist change and have long memories.  If someone has asked for ideas before but didn't follow through, the amount of investment and communication the next time is much higher.  How often has this request and then ignore cycle played out?  How jaded and jilted are the people you are asking to submit ideas?

2.  Ideas about what, exactly?  When you ask for innovative ideas, are you helping to define the scope and potential outcome?  People have ideas but want to solve problems that matter to them or their business.  If you ask for ideas, ask for them in specific areas of the business, either to drive new revenue or dramatically cut costs.  People are already implementing dozens of small, incremental ideas every day.  In these cases, it's typically true that they will rally around more disruptive idea generation, since they do incremental a lot.  But you've got to define that for them.

3.  When should they focus on this?  People are busy - at work, and away from work.  When will they find the time to innovate?  Will you relieve them from some of the pressures of their day jobs?  There's often not a lot of slack time in their personal lives, so if you simply layer on another "important" task on top of what they are already doing at work and in their personal lives, only what gets measured and evaluated will get done.

4.  The follow on to item 3 then is:  What are you evaluating, measuring and rewarding?  Most people move up the ladder and get rewarded based on a set criteria in the evaluation process.  If they take time away from their regular jobs to work on innovation, what happens to their evaluation if their regular job isn't completed effectively?  Putting out a reward for innovation isn't compelling because it's a one time thing.  Their evaluations will cover a full year and will have lasting impact on their progression, roles and future compensation.  No one is going to risk the longer term evaluations for a risky, potential one time gain.

5.  Who can they work with?  If innovation is important, and often demands a cross-functional team of people who know what they are doing, how does Tom innovate when he needs Sally and Jim's insights and coaching, when Sally and Jim aren't interested in working on new stuff?  Clearly, to really accelerate innovation, Tom needs Sally and Jim to be about as committed and available as he is, otherwise Tom is the Lone Ranger of Innovation, and his ideas aren't going anywhere fast.  You can't simply inspire the individuals, you have to equip and prepare the teams and experts who will be necessary to support innovation.

6.  What methods or processes should they follow?  How will they prove their idea to management?  People are good at day to day work because they follow existing processes and know what their managers and executives expect when they propose new projects or products.  But all that work happens within expected and defined confines.  Once you do innovation, especially disruptive or new innovation, you work outside the confines, typically using unusual or new tools and creating new solutions.  How do the innovators become adept at the new tools?  What methods do they use to present ideas to management?  How do they validate and justify new ideas so that executives support them and agree?

7.  Innovation isn't free.  The innovators can work all day at no cost (except their compensation) to create and draft ideas.  But at some point they are going to need to prototype their ideas, perhaps acquiring new technologies or working with experts to ensure their ideas make sense.  Then they are going to need to test their ideas with customers to get feedback (hopefully after they worked with customers to understand needs).  All of these actions require money - in order to identify needs, built solutions and validate with potential buyers.  What funds are you making available?

8.  What happens if we try and fail?  What if the ideas aren't interesting?  Was the effort put into innovation for naught, or worse a distraction from my regular job?  What if the ideas are good but don't align to what the business wants or management expects?  While people want to innovate, they will shy away from attempting new or risky actions that aren't clearly supported.

Now, if you've considered all of these topics and have fully addressed each one, and no one on your team innovates, you've got the right to go hire some new staff.  But in our experience, most managers and executives who ask their teams to innovate fail to consider the motivations, past experiences and lack of knowledge and tools. These gaps lead to little enthusiasm for innovation and at best a small trickle of incremental ideas.  People want to innovate but they instinctively understand the challenges and the costs. Being rational actors, they weight the costs and the potential benefits, and when the scale suggests that innovation is risky, they avoid doing even what they really want to do.  It's up to managers and executives to balance the risk/reward scale.

This is especially true if the innovation ask seems like a "one off" or a flavor of the month.  While many executives and managers understand that innovation is important, it often seems like a flash in the pan request that will soon be forgotten because it is so different from what people are asked to do every day.

If it seems that no one wants to innovate, it's quite likely that there are simply no incentives, no methodologies or tools, not cohesive groups and no shared definitions.  If this sounds like a job for leaders to tackle - you are correct.  Innovation can only happen where good leadership is actively engaged, defining the scope, providing the tools and means and supporting the experiments. 

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posted by Jeffrey Phillips at 6:43 AM 0 comments