Innovate on Purpose

Help LG Design the Future

2010-03-17T11:44:00.000-07:00

Increasingly, crowdsourcing and contests are used to gather insights and ideas from customers and prospects. You can mind many contests where organizations will ask for your ideas. LG, the electronics giant, is sponsoring its "Design the Future" contest for the second year in a row. In this contest you have the opportunity to submit ideas for a new phone concept, and could win up to $20,000 if your idea is selected.

While crowdsourcing programs like Dell's Ideastorm allow you to submit ideas that may, or may not, become new products and services, the Design the Future contest will ensure that one lucky submitter will see their idea become a new product. Check out the competition at this site.

Perhaps we'll see your idea in the new Iron Man 2 movie?

Good luck!

Innovation - Art, Science or both?

2010-03-15T07:20:00.000-07:00

I'm a bit troubled by the fact that many people in corporate America seem to believe that innovation is a mystical art, rather than a set of skills and capabilities that many people can learn and implement. I suppose around every complex problem solving process there seems to be a bit of magic, but at the core of all magic there's a simple set of rules. It may take an Einstein to figure out the rules to relativity, but they are knowable, demonstrable and proveable. So, too, are the processes, capabilities and skills behind innovation.

Another barrier to broader innovation deployment is the sense that innovation is an art - an intrinsic skill that you are either "born with" or not. I, for one, am terrible at drawing. I simply didn't receive an innate ability to depict people or landscapes from my parents. I believe, though, if I tried to, I could become better at drawing using programs like Drawing on the Right Side of the Brain. This program has radically improved the drawing ability for thousands of people, and demonstrates that even art can be learned through the careful application of basic principles. I may never be a Van Gogh, but I can improve my drawing capabilities to a significant extent. Why, then, do so many people believe they aren't "creative" or aren't "innovative" as if this is a binary decision?

I'm not going to argue that "anyone" can master innovation skills, any more than I'd care to argue that "anyone" can master relativity or will become a Van Gogh. But it is also clearly the case that innovation is based on a number of tools and processes which can be learned, and is enabled through looking at a problem through a number of different perspectives, or imagining new perspectives, which is all that artists try to do. Furthermore, everyone is creative. Think back to your childhood when a cardboard box was a rocketship and a stick was a sword. We are all creative, we simply allow corporate cultures and society's expectations to force our creativity into hiding. One of the most instructive training activities we do at OVO is a prototyping exercise in which we ask our participants to prototype and defend to others an idea using nothing more than pipe cleaners, Play-Do, paper, crayons and found objects. You'd be amazed at the creativity demonstrated when people know they'll be evaluated on their creativity!

So, the title of this post is really a set-up. Innovation is a science with rules, processes and established tools that requires the participant to think like an artist. The thinking requires new perspectives and the ability to imagine something new. Therefore, innovation combines the tools and methods of both scientists and artists, but all of those skills can be learned. If your organization wants or needs innovation to compete successfully, perhaps your team should start by examining the staff and its proclivities. Most organizations are full of people who are steeped in orderly process and science, and they need the perspectives and imagination an artist can introduce. Others have never been introduced to the tools and techniques that innovation has to offer, and need to learn those skills. Simply starting an innovation effort with no training is almost certainly doomed to failure.

Innovation and the Future

2010-03-09T08:50:00.000-08:00

It would seem logical that innovators would be concerned about the future, given that spotting new opportunities or markets before your competitors would provide an innovation advantage. However I am constantly surprised by how little investigation there is in many firms about the future and the likely scenarios and outcomes. I have to admit I'm a bit flummoxed by this lack of focus on the future. Whether your firm is an innovator, or a fast follower, or is simply trying to get by, understanding the likely future provides insights that can make your firm more profitable and more competitive.

I guess there are at least four responses I get when we talk to firms about understanding the future. They are, in increasing order of involvement and understanding:

We'll simply wait for it to unfold. The future is too complex and arbitrary and we'd rather react to real opportunities as they are validated than risk creating new products or services that may not unfold.
We try to understand the future but we don't do much beyond extending our present day offerings and competitors. We assume the future looks a lot like the present, and we plan for it in that way.
We try to understand the future by examining trends and creating scenarios. We aren't sure which scenarios are right, but we gain insights by constantly shifting the future trends.
We try to dictate the future by creating new products that disrupt other markets. Rather than understand trends, we try to create trends that shift the future to our favor.

I've witnessed all four strategies at play in different firms, even firms I'd consider innovative. The majority of the firms I interact with usually practice strategy two - they forecast the future but it looks a lot like today. They don't account for disruptions or sudden changes or new entrants, and are usually surprised by things they didn't think about or expect. Many of these firms are starting to look at trend spotting and scenario planning as a worthwhile exercise.

That is a happy medium between doing little to nothing, and becoming the trend setter. The fourth strategy is simply too daunting and risky for many firms, so the only option left is to start developing scenarios about alternative futures. I like to call this the "low hanging fruit" of innovation.

It's low hanging fruit because much of the data you need to collect is readily available. You don't have to be a CIA agent to gather intelligence about the future. The government will tell you its plans. There are a number of economists who will make predictions about the future. It's possible your organization has a chief economist or purchases reports and analysis from an econometric firm. You can get a lot of demographic and societal trends from a range of online sources, such as www.trendwatching.com or www.psfk.com. Then you simply have to have the stamina to make sense of the trends by aggregating them and creating scenarios. The data is out there. Now you simply have to have the right methodologies to assess the information and build credible scenarios.

A scenario is simply a story we tell ourselves about one alternative future. The scenario is based on amplifying a selected set of trends and projecting those trends into a 5 to 10 year future. Then we can create a story about that economy and its opportunities, challenges and problems, and then understand the implications for our business if the future unfolds in this manner. Note that no one scenario will accurately predict the future, you should create several scenarios that emphasize different trends in different ways.

This effort doesn't require a lot of work, other than imagination, and can help you spot new opportunities, new markets or new threats to your existing business. Given that the few things we know about the future are that it is more complex, approaching faster than ever, more global with fewer barriers, understanding something, anything about the future and acting on it now can only convey an advantage.

If you need help building a trend spotting and scenario planning model, contact OVO. We can help. If you'd like to read more about scenario planning, check out The Art of the Long View. It is one of the best books on scenario planning and is a very easy to read book as well.

Learning innovation skills and best practices

2010-03-08T05:11:00.000-08:00

There's a difference between knowing "about" innovation and having experience doing innovation. Just as I don't compare myself to Lance Armstrong although we both ride bikes, there are skills and knowledge that are manifest in people who lead effective innovation programs that may not always be manifest in your organization. These skills can be learned through training and through careful exercise within your organization, but it is dangerous to presume that people who have an interest in innovation possess the skills and best practices to carry out innovation efforts. This was brought home to me in a meeting I attended recently.

I was at a meeting with a number of other people interested in innovation, and we were asked to brainstorm to help solve a particular problem. A person who is an "innovation" leader in his company was asked to facilitate the brainstorming session. An executive from the firm who was facing the problem gave a brief presentation on their challenge and needs, and then the facilitator asked for ideas.

The meeting quickly disintegrated because the challenge we were addressing was too large and poorly defined, and the timeframe too small. While the challenge had been presented by the firm's CEO, it was unclear whether we were supposed to provide incremental or disruptive ideas, or merely validate a course the CEO identified in his presentation. Additionally, no one had done a good job setting a scope - what to include in your thinking or what to leave out for the purposes of this session. At one point one participant suggested that we couldn't generate ideas until we'd evaluated all the health care systems in all the major economic powers in the world. Unfortunately we only had two hours.

So, we got off to a rocky start because the problem was poorly framed (not the facilitator's fault) and really had far too many interlocking and interchangeable parts (again, not his fault). Also, we did not have a good understanding or framing of the scope - perhaps his fault, perhaps that of the sponsor. Even when the participants tried to extend the scope, the facilitator did not try to reframe the question. Next, one participant, clearly a "Clarifier" from the Foursight model, kept asking clarifying questions rather than submitting ideas. Being able to recognize a clarifier, and understand their needs, would have been helpful, but the facilitator also had failed to establish the rules of engagement. Once we entered brainstorming, we should have been focused on generating ideas instead of asking questions. Without a commonly held set of beliefs and rules, each person was participating in the session with their personal beliefs and rules. Since we didn't set out a scope or an expected process or set of rules, there was no orderly process for generating ideas.

To give credit where it is due, the facilitator did "take off" his facilitator hat and contribute ideas, so he nimbly stepped into and out of the facilitator role, and did a good job capturing ideas. This, though, in my mind was another signal that best practices weren't being followed. It was clearly a struggle to write down ideas and to manage the group simultaneously. Ideally we would have had a facilitator and a "scribe" to document the ideas.

This session led me to believe that many people conducting "idea generation" sessions in corporate America are doing more damage than good. If this example is indicative of what happens everyday in most organizations, then idea generation and brainstorming deserves a negative rap - and many innovation leaders and teams need training on conducting and facilitating brainstorming and idea generation.

Here's what should have happened:

Set the ground rules. There are a consistent set of rules for brainstorming, including "encourage wild ideas", "Go for quantity not quality", "Don't judge while ideating" etc
Clearly define the opportunity or challenge. Make the issue smaller or simpler if necessary.
Define the scope - what should be considered and what should be ignored. We should have placed "all health care systems in the world" out of bounds from the start.
Allow people to ask clarifying questions before we start brainstorming. Once we start generating ideas, limit the questions, which often change scope.
Pick a scribe to capture ideas so the facilitator doesn't have to write down ideas and manage the group
Encourage the reticent and moderate the talkers. Any group, and ours was no exception, has people who are happy to toss ideas out all day long, and those who won't speak at all. We need to hear from everyone, and perhaps a bit less from some people (me included).
Keep the team on task and on target. When the "evaluate all health care systems in the world" statement was made, we should have been reminded that that was out of bounds, and we needed to refocus on what we could solve.
Stretch the group when necessary. The facilitator can/should occasionally ask questions that shift the group's thinking or introduces a new perspective.

These ideation rules and best practices are documented in a set of slides OVO has posted here: There are a number of good books written on this subject as well, probably the best is Think Better by Tim Hurson.

These skills aren't innate and must be learned and reinforced. My concern is that people who work on innovation activities may be leading events but may not be fully trained or may not have all the skills and capabilities necessary to be very effective. And effectiveness in this context matters, since we were trying to solve big problems very quickly with a heterogeneous group. Only good methods and good facilitation was going to get it done well.

If your organization is trying to generate new ideas internally and desires to be guided by internal staff (which we think is a good thing), invest in some training to ensure the innovation leaders understand their roles and best practices.

Innovation is too important to leave to chance. If it is important to your organization, train your team to be effective idea facilitators!

Carolinas Innovation Conference April 10th

2010-03-05T12:17:00.000-08:00

For those of you interested in innovation, and who love to learn more and to network with fellow innovators, we have a great program for you. The Carolinas PDMA chapter is hosting a one day innovation event with the University of North Carolina's Kenan-Flagler business school on April 10th. This event will highlight a number of innovation activities and firms in North and South Carolina, but anyone interested should plan to attend, in person or virtually.

You can learn more by clicking on the Innovate Carolina website. We have an incredible list of speakers from firms like Michelin, Bank of America, Lord Corporation, RJ Reynolds, Primo Water, Center for Creative Leadership, UNC, the Governor's Council on Innovation, MeadWestVaco, and many, many more, including yours truly.

If you are interested and can come, please come. If you are interested but can't come, much of the presentation will be simulcast through a web seminar over LiveMeeting. If you are interested but aren't available, alert others that you think might be interested. Let's make North Carolina the center for innovation.

Can you "can" innovation?

2010-03-02T05:54:00.000-08:00

In one of the most poorly worded but insightful statements I've seen in quite a while, the CEO of 3M was recently recorded as saying

Everybody wants to find out how to can creativity. You can't. Creativity comes from freedom, not control. We let all the people in the R&D community spend 15% of their time researching whatever they like

As we've discussed here before, there are a number of things you can do to make innovation more process-driven, understandable and predictable. But there are also portions of the process that are simply based on insights, creativity, connecting seemingly different concepts and just pure accidental insight that can't be dictated or managed. He's right, a firm can't "can" creativity, but can create the space for creativity to happen. This is the difference between "managing" innovation and "managing for innovation".

Firms that attempt to "manage" innovation or creativity create very specific goals and treat the entire activity as if it can be a well-planned event. Tuesdays, we have sudden flashes of insight. Wednesdays, we ideate. Thursdays, we prototype. If only it were that simple. No, just as the rest of his quote implies, we need to create the space and opportunity for insights and creativity to happen, then provide a mechanism to move those insights quickly through an innovation process.

Creativity comes from "freedom not control". Absolutely. You can see that in almost any activity in human endeavor, whether the focus is on governments - not much creativity and innovation in, say, Myanmar, for example as compared to Finland, or new product development. The more control we place on creativity, the more we try to contain it, direct it and place it in a box, the less creativity we get.

What this means for most firms that seek innovation is that we have to be tolerant of the aspects of life that promote creativity. This means we need to create opportunities for our teams to have different experiences - to interact with customers or to become a customer. To try to eliminate our product entirely, or as the article suggests, find ways to quadruple production or make the product at one-tenth its cost. We need to promote interaction with academics and business partners. We need to encourage networking and the combination of products and services with our own that most people within the firm would reject.

In other words, creativity and insights are more likely to happen in situations that are exactly the opposite of what most businesses reinforce and expect. And then they wonder why it is so hard to generate really interesting new ideas.

Yes, there's a risk with all this new freedom. Some people will take advantage of the freedom and use the time to goof off, rather than put the time to creating connections and networks. On the other hand, many people will blossom with this freedom and create new concepts that become new products and services. If your systems and management is too rigid, finding people who will follow orders and execute efficiently won't be a problem, but innovating will be. Striking the right balance between executional excellence and creative freedom is vitally important for successful innovators.

Selling innovation to your boss

2010-03-01T05:46:00.000-08:00

I've argued before that most firms innovate when faced one of two conditions: fear or greed. The fear factor indicates the firm has explored all other options, and now only the most "radical" option - innovation - remains. To paraphrase Sherlock Holmes, "when you've eliminated the possible, whatever remains, no matter how improbable, must be the answer". And, like Gordon Gecko from Wall Street, I believe many firms innovate when they believe they've spotted an emerging opportunity or new market. In this case, greed is good.

But if all innovation were based on these two drivers, then little innovation would get done. Clearly many firms latch onto innovation as a life preserver, a last ditch effort rather than a strategic focus, but there's more innovation underway than could be accounted for by desperation. And I'm relatively certain that while some firms are good at spotting innovation opportunities and moving aggressively to produce new products and services, they are fairly few and far between. That leaves us with the majority of innovation getting done by the firms in the hazy middle - not really desperate, but not really leading innovators either. If that's the case, what methods do they use to "sell" innovation to the appropriate decisioning individuals or bodies?

Innovation can be "sold" to executives in one of several methods:

As a method to increase organic growth, driving new profits
As a method to disrupt the existing market or adjacent markets, preempting a competitor
As a method to create significant differentiation within a market space
As a method to create product or service leadership

These are the hard-headed, rational reasons, and the reasons that organizations tell themselves they innovate. in reality, most firms take on innovation efforts because:

An employee created a great idea and we really have no choice but to exploit it
A competitor has launched a new (product, initiative, campaign) and we need to respond to it
A senior leader within the firm has made it his/her mission to create an innovation program and the squeaky wheel must be greased

We often find that innovation programs are formed around existing assets - people or ideas - that persist until they must be addressed. Sort of like a plant that must be weeded out or watered. Otherwise, most new innovation efforts are based on a response to what a competitor is doing. This "reactive" innovation is not, in our minds, the best way to innovate, but it may be the best way to sell an innovation program, to give your initiative the final "kickstart" needed to get the funding or resources you need.

Thus, to "sell" innovation you need to:

Link it to a corporate objective (growth, differentiation, disruption)
Build ideas and momentum under the covers
Demonstrate what your competitors and new market entrants are doing
Link all three together (strategy, existing momentum, competitive threats) to complete the package

Without all three "legs" of the stool, you'll struggle to gain credibility. Without a strategic linkage any innovation will be incremental point solutions. Without some existing momentum, the work will seem too overwhelming. Without the ability to demonstrate what competitors are doing, you rely on executives who place great emphasis on longer term strategic goals.

Innovation and Strategic Intent

2010-02-25T05:51:00.000-08:00

Gary Hamel isn't an innovation "expert", he's a strategy and management expert, which you'd know if you've read Competing for the Future or The Future of Management. However, since there's a significant amount of overlap between innovation and strategy, you'll find that Gary has a lot to say about innovation. If you haven't read The Future of Management, go out and get a copy, read it, and then consider your options. But this post didn't come to praise Gary, it came to bury poor strategic management.

In his earlier book, Competing for the Future, Gary suggests that every firm needs a clearly communicated Strategic Intent. When we at OVO train our clients on the relationships between strategy and innovation, we borrow heavily from Gary in this case. Here's Gary's definition of "Strategic Intent":

An ambitious and compelling dream which provides emotional and intellectual energy for the company and defines the journey to the future.

Strategic intent is your firm's ability to create a clear and compelling statement or vision for itself, and to communicate that vision to its employees, shareholders and most importantly, its customers. When anyone in a firm asks "why are we here", it should be easy to answer. Does your firm have a compelling dream that provides emotional energy and defines its journey to the future? If not, how can you possibly expect to innovate?

We at OVO believe that firms innovate best when they have a clear strategic intent, and when they innovate within that strategic intent. Good examples here are, unfortunately, Apple and Google. I say unfortunately because these are two of examples always used about innovation, but in this case they offer beneficial lessons about what to do, and what not to do. Apple's strategic intent is based on user experience. Apple didn't invent the MP-3 player, or the cell phone. It simply improved on those products and amplified the user experience. However, Apple's failures are insightful. The Newton and the Lisa were two examples where Apple failed to innovate around the customer experience. Firms innovate best when they innovate within the context of their strategic intent. Hutch Carpenter explores some of these successes and failures at Apple and Google in a good post.

This is true because a well communicated strategic intent helps customers and business partners understand your value proposition. Ideas that augment and extend your value proposition are more easily consumed, while ideas that violate or seem unaligned to your value proposition are difficult for employees to understand and difficult for consumers to accept.

So, there are two important possible failures when innovating when it comes to strategic intent. The first is the failure to define a strategic intent for your business, but that's not really an innovation failure. You may think many firms have this, but few firms have a clear, concise description of their strategic intent. Most prefer to leave the issue a bit ambiguous, which makes innovation difficult.

The second failure is having a strategic intent and working on innovations that dramatically ignore or violate your strategic intent. If, like Apple, your value proposition is around user experience, then your best innovation opportunities lie in extending user experience. And where Apple has been successful, that's exactly what they've done. And when they've failed, many root causes of the failure can be linked back to ignoring Apple's strategic intent.

Why clear strategy is so important to innovators

2010-02-24T05:44:00.000-08:00

One of the reasons that it is so difficult to innovate successfully over a long period of time - say a couple of years or more - is that most organizations simply don't have very clear strategic goals or mission statements that are well understood and form the basis for what gets done. When there's a lack of clear, concise direction and strategic goals, it is exceptionally difficult to measure or predict the value of an innovation initiative. When the absolute value of an innovation effort is not easily calculated, the work is marginalized or worse, left on a slow burn just to "see what will happen".

Many organizations are taking the "slow burn" approach - keeping a pot of innovation cooking on the back burner of the stove to see what unfolds. These firms are waiting to see what happens in the near future, and hoping that the stew in the pot on the back burner will produce something interesting when, and if, they need it. This methodology is both reactive and unplanned. Reactive in the sense that the firms are waiting for the future to unfold to see what products and services are important, rather than placing a big bet to move the industry with a radical new product or service. Unplanned in that they are allowing the market, new entrants and consumers to shift demands, rather than creating demands with interesting new products. When the future does unfold, they'll likely find that the good ideas that were in the pot are now outdated. When that happens, innovation will be deemed a failure, since there weren't any good ideas ready when the organization finally decided to pull the trigger.

What's needed for innovation to succeed in these environments is a clear, definitive strategy about the future of the business, and what aspirations or goals the firm has for itself. If the executive team thinks disrupting other markets or taking on product and service leadership is important, that must inform the work of the innovation teams. Innovators can easily create ideas and products that will radically change the existing markets, in any industry, when given the resources and the direction. However, a clear strategy comes with significant risk. Often it's easier for executive teams to examine "best practices" and mimic the strategies of other firms, rather than embark on a different course. Then, innovation is at best enabling a fast follower model, and it can prove difficult to get any long term value from being a fast follower, as your products and services are at best second or third to market and the innovation leader is well ahead on its course to create a new product or service.

Innovators in most firms aren't frustrated because they can't come up with new ideas, they are frustrated because they aren't sure which of their ideas is the most valuable and relevant to the management team. Compound that fact with the fact that few firms do a good job of trend spotting and scenario planning, and it's likely that few firms do a good job understanding the wants and needs of their customers just a few years into the future, or how to direct those customers to demand new products and services. In fact, often the only people with a good sense of what will be required or demanded by consumers in the near future are the innovators who take the time to do trend spotting and scenario planning, which is another powerful yet underutilized process in most firms.

We as innovators talk about the importance of linking innovation and corporate strategy, but the fact is that often corporate strategy is unclear or poorly communicated. In other cases the strategy is to be a lot like everyone else in the industry, which is anathema to innovators. Until your firm has a clear strategic goal and communicates that clearly to its innovators, you'll have executives frustrated with the new ideas that aren't implementable and innovators frustrated that no one will help them understand what markets, customers or needs are important.

Weaving innovation into the corporate structure

2010-02-16T11:10:00.001-08:00

I'll get up and bang on my innovation drum all day, hoping that people will listen to the message. What's heartening is to find other firms and other people who do the same. Well, perhaps their drums are a little louder or more in tune, but the songs they are playing are the same.

Accenture has come out recently with a survey entitled Overcoming Barriers to Innovation. Their subtitle is "emerging roles of the Chief Innovation executive". The survey looks at what's succeeding, and what's failing, in corporate innovation, and from this work concludes that a "Chief Innovation" executive is required. While I agree with many of their findings, I'm not sure I'll draw the same conclusions.

The first point that I think is salient in the survey is the reported gap in satisfaction between the CEO and other executives around innovation. In almost every attribute around innovation, the CEO's reported satisfaction is anywhere from 20 to 30 percentage points higher than mid and senior level management in the same firm. This result can be caused by one of three factors:

CEOs had a very low expectation of innovation, so any positive outcome is great
Mid/Senior level executives had a higher expectation of innovation than CEOs so their disappointment is evident
CEOs don't have a clear understanding about what innovation is actually happening so they have no reason to be disappointed, yet, while mid/senior level executives understand exactly what is happening and are already disappointed.

In case you weren't sure which factor I felt was most likely, my vote is with number three. My experience is that CEOs have big expectations about innovation but aren't clear about the commitments and investments necessary, while mid-level and senior executives understand the costs but don't expect much in the way of outcomes.

Another point made was that CEOs must do more than simply create a vision for innovation - the CEOs needs to take ownership and create accountability for innovation execution. It's not enough to stand on the mountain top and tell Wall Street we're going to innovate, the CEO must put programs in place and hold people accountable to ensure his or her words are backed up by corporate action.

To do that, and this one is near and dear to my heart, since we believe in innovation as a sustainable business process, "companies must treat innovation as any other business discipline by aligning resources, tools and processes with a clear set of performance goals and metrics". This statement is the difference between talking about innovation and doing innovation. After all, as we at OVO have said many times, every business organizes around consistent processes. Processes describe workflows, define roles and responsibilities and ensure a consistent flow of products, services and information. Well defined and rehearsed processes leave little to chance. Most current innovation efforts have none of these characteristics and leave everything to chance.

Finally, since many organizations don't have processes and methods for innovation, and aren't clear about how to convert ideas into new products and services, the conversion rate for ideas is low, and the timeframe is long. In fact the survey goes on to say "organizations need to focus on findings ways to accelerate innovation frequency and speed. This is a major weakness, which has been identified by the survey, and which could serve as a major source of competitive advantage...". Note the words frequency and speed. If innovation is treated as a discrete, occasional project, the frequency is based on how often we kick off the projects, and the speed is dictated by the urgency of the project and the abilities of the team. If innovation is treated as a core capability, frequency is dictated by how often we spot new opportunities and speed by the knowledge and understanding of the innovation process. Note one other point that Accenture stuck in there at the end - "a major source of competitive advantage". Here's another point on which we agree. Firms that are more adept at innovation than their industry peers gain competitive advantage, driving higher prices, better margins and more market share.

So, what's it going to take to weave innovation into the corporate structure?

Ownership by the CEO
Accountability by senior executives reporting to the CEO
A defined, consistent innovation process adequately resourced and regularly measured
Working consistently to generate ideas and create new products and services, with regular frequency and top speed

You want to know what it takes to be innovative? There's your information, supported by an Accenture study and OVO's experience. While Accenture concludes that a Chief Innovation Officer is necessary based on this information, we can look at a number of firms that are innovative and meet these criteria that don't have a "Chief Innovation" officer. The attributes are more important than the individual, in fact if the attributes don't exist then the individual will fail, as will an innovation focus.

Innovation - an era or a fad?

2010-02-15T05:59:00.000-08:00

I had a rather disconcerting part in a recent discussion with some senior leaders and executives who were discussing innovation. It was interesting to hear from some of them that they believe "innovation" is a fad, and will run its course shortly. They believe that innovation is simply another "quick fix" elixir cooked up by management consultants to find new things to sell to senior executives. Some others in the discussion believed that innovation is more systemic, and will have a longer shelf life, and add value for many years to come. I found myself disagreeing with both schools of thought.

The cynics suggest that innovation is simply a buzz word for creating new products or services, something that many firms already do. In that regard they view innovation as the current flash in the pan, meant to distract everyone from the real problems and place a nice bow on a box that already exists. To these cynics I say - you couldn't be more wrong. In a market that is moving and changing as quickly as the one we are experiencing now, and an environment where consumers are demanding more, and better, products and services, and in a production environment where any new idea can be copied fairly quickly, the only real winners are those who create substantially new concepts on a consistent basis. The old, static product lives and days of lower competition are over. Innovation isn't a "nice to have" or a "flash in the pan", it is rapidly becoming the most important skill set your organization can acquire.

For those who believe innovation does add value and can be more systemic, I say they are right, but only partly so. They see innovation as a tool that can be used, until the next tool comes along. This follows the theory of "waves". There was the "wave" of quality improvement, followed by the "wave" of rightsizing and outsourcing. Now, these folks believe, is the time for the "wave" of innovation, which will run its course and introduce a new wave of something else yet unseen. The problem with considering innovation as a wave with a specific time horizon is that new products and services will continue to be important long after the expected time frame of the "wave" is complete. If your investment is to simply adopt innovation as the next tool down the pike, and expect to jettison it once the wave is over, your team won't commit the necessary resources to innovate effectively. It will be a sideline to the "real work" of the organization, eagerly awaiting the next wave or fad.

No, here's where I diverge from the discussion. We are in a fundamental environmental shift. The pace of change and the increase in global competition means that the way we work has to change. Innovation isn't an interesting sideshow or fad, unless your management team allows it to be. Innovation isn't a wave or trend for the next "x" years to be replaced by something else. Innovation is THE differentiator between firms that are thriving and healthy today, and those that will be thriving and healthy a decade from now, because innovation isn't a fad, and isn't a wave, but is going to become a permanent way of life, a sustaining capability for the firms that understand the shift underway and adopt innovation as a cultural imperative.

If you think this doesn't matter then simply consider the culture and environment of the organization where you'd most like to work. Do you want to work in a firm that places emphasis on the future and staying abreast of trends and new ideas, or do you want to work in a firm where the constant activity is reacting to what other firms do in the market? The most innovative firms will attract the best people and accelerate their capabilities, becoming a self-fulfilling prophecy. The firms with less innovation skill will atrophy because they can't compete on new ideas, and they can't generate new products and services fast enough to retain customers.

What's it going to take for us to wake up and realize that innovation is the most important skill we can gain within most organizations? I recognize that this kind of change threatens the status quo, but if we ignore the shifts underway in the market and economy we risk a future with far fewer jobs and far fewer opportunities.

Can making something worse be innovative?

2010-02-11T13:54:00.000-08:00

I was working with a client recently while we were considering some new product ideas. One of the engineers on the team remarked that we should seek ways to make the product worse. I recoiled from that suggestion, but held back my comments to see how others would react. Remembering the brainstorming rules "every idea is a good idea" and "No judging during idea generation", I was probably wise to hold my tongue. Because his definition of "worse" wasn't less aesthetically pleasing or more likely to do damage to a customer, but had to do with removing features and attributes that customers didn't seem to care about, to allow the firm to make the product at less cost. Sometimes this is called "defeaturing". My question in my own head was: yes, but is that innovation?

We typically define innovation as an idea that is brought into valuable action. We use the more inclusive "valuable action" because schools can innovate by teaching more kids or using different teaching techniques. Governments can innovate by delivering better services. It doesn't have to be a product. If we take the definition at face value, then creating a somewhat new product based on reduced functionality that makes the solution more affordable and is just as acceptable could be innovation. But what's more important is that we occasionally forget one critical factor in innovation: it's not about what we, the developers and product managers want. It's about what the customers and users want and need, and are willing to pay for.

If I create an excellent product, but it is too difficult to use or too expensive to acquire, then even though it may be very innovative, it may not be successful. The ultimate goal of innovation is to create the right solution, for the right customers just as they become aware of their needs, and are able to acquire the solution. If my timing is too early or too late, sure, it's innovation, but I don't capitalize on the market opportunity. Timing is critical - too early and I educate the consumers and the second and third entrants win the market share. Too late and I've missed the chance to gain the lion's share of the market. Aligning to the consumer base is important as well. If I create very interesting products and services that don't meet a need in the consumer base, I may be innovative but won't be around for very long.

Ultimately, then, innovation is about recognizing needs or opportunities before others do, and validating that those needs are important and relevant to the targeted consumers. If making a product that is over-engineered or missed the market window more relevant and appealing to customers by removing unnecessary features, then I'm willing to call that innovation. The folks who brought us Blue Ocean Strategy used the Strategy Canvas to look at competitive features in most industries, and argued that we could radically increase or decrease offerings in most of those features. For example, seating choices in airlines. The major airlines suggested that being able to choose your seat at purchase is very important. Southwest suggested that it's not important at all, and for some consumers they are right. In fact Southwest "defeatured" a lot of the factors around airline travel - no food, no seating choices and at one time no frequent flier miles. Yet by simplifying they opened the door to a different class of traveler, and by scaling they now compete with the majors.

Too often we are so interested in creating the "best" product or the newest product or service that we fail to realize that many innovation opportunities are available for us if we'll only adjust our thinking. Far too many products and services only partially meet the needs and expectations of customers. That means there are opportunities to make products or services that are much better, and much worse, than exist today. As innovators we are expansive and interested in the really new, when sometimes radical adjustments of the existing are what is called for.

Book Review: OOBonomics - 12 Great Outside of the Box Policy Ideas

2010-02-10T06:55:00.000-08:00

I have the pleasure to be asked to review books about innovation, and ideas quite regularly. Some are great, and some not so much. But most of the books I receive have to do with innovation techniques or stories in the private sector. So it is refreshing and encouraging to receive a book about ideas for the public sector.

The book under consideration today is OOBonomics, or Outside of the Box Economic Policy Ideas, from Al Lewis. You can find the book on Amazon here.

Al Lewis has taught economics at Harvard, run a healthcare company and has been a partner at Bain and Company. Needless to say, he's smart and has good insights. Fortunately for us readers, he presents a number of policy ideas in a funny, tongue in cheek approach that makes the book interesting and approachable. After reading a few of his ideas, you begin to wonder why none of them have been adopted.

One of his ideas for stimulating the economy, for example, is a time limited gift card. Since a significant portion of the last stimulus checks to households have been applied to saving or paying down debt rather than boosting spending and consumption, Lewis argues that the government should send out gift cards which have to be spent at certain retailers. In this manner we ensure that the stimulus money gets recycled into new spending, rather than into saving or paying down debt. This is just one of twelve fairly simple ideas that could work and make the government more effective.

Lewis has a number of policy ideas along these lines that would improve the way the government works and would require very little change to implement. His ideas are insightful and based on the way people actually work and live, rather than the way Congress imposes laws based on the way they think we live. His book of simple changes indicates what's wrong with much of what happens today in Congress: big, sweeping changes meant to benefit some industry or segment of the population, rather than well considered, well-crafted ideas that address the needs of the vast population.

Check out his ideas, and more importantly, try to win some money from Al as well. On his website, www.thinkoob.com, you can enter ideas and win up to $1M if you ideas is adopted and implemented into national policy, and $500 if you idea is used in the next edition of OOBonomics. Got to like a man who puts his money where his ideas are.

Trend Spotting - Purpose, Frequency and Responsibility

2010-02-03T14:02:00.000-08:00

I've written before (and recently) about the reactive nature of many businesses. It often seems there are more incentives to ignore signals in the marketplace and then conduct heroic efforts at recovery than to simply plan effectively and study trends and act accordingly. The purpose of today's topic is to examine whether or not trend spotting and scenario planning is important and valuable (hopefully already answered) and if trend spotting and scenario planning are important, what individual or team within your firm should be focused on this work, and how frequently it should be done.

First, let's put to bed the debate (admittedly a thin one) about whether or not your organization should track trends and try to understand likely future scenarios. The answer for most firms is a resounding "yes", especially given the increasing pace of change. In the past you might have been able to argue that change was slow and steady, and an occasional peak in the periscope was all that was necessary. As globalization increases and the pace of change increases, you need to be identifying trends and making sense of those trends consistently, or the disrupters will eat your market share for lunch. Your planning efforts can't assume the future looks a lot like the present, and also must look further out in time. You need to look further out in time because even though the demand cycle has sped up, many firms haven't improve their product or service development cycle, so if you only look a year or two into the future, but it takes 18 months to two years to get an idea through the pipeline, you are shooting behind the curve.

OK, let's assume for the sake of argument that you agree that trend spotting and scenario planning are valuable. Then the question becomes - who should spot and capture trends, who should develop scenarios and who should interpret the results? These questions need to be answered on two levels: at the corporate or business unit level, and at the product or service level.

Trend spotting should be underway, all the time, as a consistent activity by a wide range of people within your organization. Those trends should be reported to a central analyst (individual or team) who is capturing, recording and tracking trends. This model works at both the product/business unit level and at the corporate level. We at OVO emphasize this work at the corporate level, because work at a product or business unit level can too easily be focused too narrowly on a specific product or market or geography, and miss trends or disruptions from other sources. We'd rather see a number of people recognizing and reporting trends throughout the organization, centralized in some team at the corporate level, who capture, report and synthesize the trends, typically in four or five categories (demographic, technological, economic, governmental). One central repository of these trends reduces the "my trends are more accurate than yours" debates and should ensure a more all encompassing view of trends. Of course everything I've described can be replicated in a business unit or product line, with the awareness that these are often more narrowly tailored.

If we centralize this skill, what kinds of people are necessary to capture, analyze, report and synthesize trends? Anyone in the organization who reads, or interacts with customers or business partners, or who has an interest in what's happening or unfolding can capture and register trends. We've set up several systems like this where anyone can report trends. Additionally, the central team can also track and register trends. As trends are recorded and categorized, we can also begin to identify which are important and relevant for the business, and request more insight or investigation into some trends over others. As this is an ongoing activity, over time it becomes evident that some "trends" fade away while some are enforced. Periodically (we recommend twice a year) a team comes together to select trends and build scenarios about a 5 to 7 year distant future.

We tend to pick 5 to 7 year futures because in many firms the selection and implementation of a new idea and the rollout of a new product can take several years, so we want to get the product to market slight early rather than slightly late. With the pace of change as is currently experienced, trying to understand more than seven years into the future is really a crap shoot. Using a horizon less than three years is really not effective, as most concepts will be incremental.

Who should develop the scenarios? We believe these should be guided or facilitated by people who don't necessarily have a vested interest in the outcome. A scenario guided by a product manager is likely to reinforce his or her biases, since they have a stake in the outcome. Again a central innovation team acting as facilitators with a representatives from a product unit or business unit can mix the best of both worlds and ensure a relatively unbiased examination of several potential future outcomes.

Note that through all of this discussion we assume that this function exists as a continuous offering over time, not a discrete, start-stop program but a team that builds insights and skills and offers them to executives within the business. If you want the inexpensive, low hanging fruit of innovation, here it is. No where else can you get a great understanding of the near future and your opportunities and challenges for less cost. The only requirement after the scenario plan will be your ability to take action.

Contact us at OVO Innovation if you'd like to understand how to do this more effectively, or how to receive training to do it internally.

How to spot - or avoid - innovators

2010-02-02T08:35:00.000-08:00

As always, we'd like to make our readers and clients happy. In that vein, I'd like to introduce how to spot people who are likely innovators. In this way, you can identify them more quickly, and choose to hire them if you want to be more innovative, or you can ignore and avoid them if the status quo is more your scene. Good luck with that strategy, by the way.

Identifying people who are innovators is actually relatively easy. They are the ones who don't actually seem to belong the organization in the first place.

Innovators tend to:

Reject the standard framing of a problem and restate the problem or opportunity. Rather than work within the given constructs or framing, many innovators want to toss out the framing and start anew. Just like Galileo, this may require working against an orthodoxy, yet nonetheless, it moves and so must we. Those folks who are so problematic about wanting to change or expand the framing of a problem? Probably good innovators.
Be optimistic. They are almost always the glass half full people. Pessimistic people will focus far too much energy on the "problem" while innovators will acknowledge the problem and move on to find interesting solutions. They believe the problems are merely temporary barriers to more interesting solutions.
Look to the future for signals rather than to the past. In most businesses, many people will ask "has this been done before" and "what can we learn from that success or failure. Innovators want to know "can we be the first" and what signals in the market or environment give us indications that we'll be successful
Care about solving unmet or poorly understood challenges. Often innovators are going beyond the obvious, ordinary problems to uncover deeper unmet or poorly understood issues. If your team is captivated by solving an obvious and incremental problem, they aren't innovators.
Network with people different than they are. Evidence suggests that the best innovators are people who read outside of their industry, interact with people from many different backgrounds and interests and seek to bring solutions from outside their industry to the table. People who are very deep in one industry but ignore signals and solutions from other industries are usually not very innovative.
Are proactive. Innovators actively seek change while many executives are content to wait and react to what other firms do.
Are dissatisfied with the status quo and willing to change it rather than simply accept the status quo and merely complain.
Are very comfortable learning, trying and failing, and then trying again. They aren't stymied by a single failure and are usually very determined to start again, reframe the problem and try a new tack or approach, learning from previous failures and incorporating that knowledge.

So, if you are in the market to hire someone and want to know if he or she is likely to be an innovator, look for these signs:

Ask them about an existing problem that you have. See if they are perfectly willing to accept your framing, or if they request the opportunity to reframe or change the frame entirely. If the latter, a likely innovator.
Ask them about existing societal problems or corporate problems or challenges. Listen to how they approach the problem and their willingness to suggest changes or alternatives and the possibilities they suggest for change.
In the context of a problem, what information do they seek - external, future oriented or internal information about the past?
Can they name a big failure in their lives and demonstrate what they learned and how that failure helped them gain more insight into an eventual solution?
Can they name five people in relatively senior positions they interact with on a regular basis who are from different industries? Can they demonstrate an active network outside of their "home" industry?

The kinds of answers you get with these questions will tell you how strong the "innovation" force is within the candidate, and whether you should hire that person or turn the Force against them.

Innovation does not equal technology

2010-02-01T12:03:00.000-08:00

I had the opportunity to speak to a group at a university recently about innovation. In fact, I've spoken to four universities about innovation in the last few months. There's a growing awareness that innovation needs to happen in university settings. This would include innovation on the administration of the university, in the teaching methods and in what is taught. But that's a sideline to what I want to write about today.

In my most recent speaking engagement I was confronted by a senior faculty member who argued that all this talk about "innovation" was pointless, and missed the main target, which was that we needed more focus on science and engineering education. In his mind, innovation was equated to technology, and only scientists and engineers could bring new technologies to life. While I agree that scientists and technologists can bring innovations to market, I'd argue that that definition of innovation is awfully narrow. It seems to me that innovation can occur in many avenues that have little or nothing to do with technology, engineering or science.

In fact OVO has recently worked with a financial services institution, a health care insurance firm, a life insurance firm and several other firms in the services industries where there are no physical products developed and few if any engineers or scientists. Yet these firms are innovating. Innovating their service models, customer experiences, processes and business models. Apple, the penultimate innovator (tic) is a technology firm but doesn't innovate around technology - more around user experience, linkages and partnerships and content.

There are a number of firms that innovate around technology and science, so I don't want to downplay the importance of technology in innovation. However, we do need to understand the balance between product innovation and all other kinds of innovation, and the importance of engineering and science to innovation. It's really a question of set theory. Technology innovation is a subset of innovation generally, and while all technology innovation is innovation, all innovation is not technology innovation. As much as it may pain my engineering friends to say it, there's a lot of innovation happening that has little or nothing to do with technology. Conversely, there's a lot of technological research that will impact our lives through new innovations as products and services.

This dichotomy also explains a lot of angst in the intelligentsia about the termination of NASA's return to the moon program and the decreasing amount of federal research generally. The belief is, and I agree with this, that we learn more and capitalize on that knowledge when we explore space flight or invest in primary research. But curtailing space flight does not necessarily make the US less innovative. It leaves us in a situation where, from a governmental point of view we may become more dependent on the Russians or Chinese to put vehicles in space, or perhaps it makes available a private enterprise approach to space flight. But reducing investment in these areas doesn't mean we are less innovative, it just spreads out the responsibility for innovation more broadly. But that had already happened in the 70s and 80s, as private enterprise took on more direct research and investment and the federal government's role declined.

OK, enough of the tangent. Innovation depends on creating and developing new ideas. Some of those insights are based on new technologies or improvements to existing technologies. Some innovation, however, is based on insights about services, processes or business models, and don't rely on technologists or engineers for insights. To claim that all innovation is technology innovation, and that without engineers and scientists no "real" innovation can be accomplished is to view the world of innovation with a very narrow lens.

The most powerful innovation tools

2010-01-27T21:11:00.000-08:00

I was leading a training session with a client today when one of the folks in attendance looked at me and said - this isn't rocket science. I had to agree. In my experience most of the really interesting tools and techniques for innovation, the ones that create real insight, are fairly simple, but in their simplicity force the team to look at its products and services in a completely new light.

Take, for example, my favorite "low hanging" fruit - the scenario plan. A scenario plan can be built by a few well trained executives in a workshop in a day or two, using trends and market information gathered over a few days or weeks. There are several published methodologies to follow, and if you need a good facilitator to walk you through the effort, we're available. Total effort, less than you spend fighting most "fires". Total value - the identification of emerging opportunities and possible threats to your business, with enough lead time to act accordingly. Why every firm, every product group doesn't conduct at least two scenario planning sessions a year is beyond me. They are easy to do, help you gain advance insight on critical markets, and can help position your firm in a leadership position instead of a reactive situation.

Or, another favorite tool, the one that sparked the "this isn't rocket science" comment - the customer experience journey. This tool documents the lifecycle of a customer as they become aware of your offerings, become a customer, use your products, services and support, and remain a customer or leave. Understanding the lifecycle of the customer and critical touchpoints, we can discover "moments of truth" where the customer has different expectations of service or interaction than we do. Simply put, we are trying to be "intentional" about our design for customer experience. What's powerful about this tool is not in its bells and whistles. There really aren't very many. What's powerful is that few firms think about the "journey" and these critical interactions and design the customer experience. There are a number of potential opportunities to innovate around a customer experience, and studies show time and time again that the two most compelling innovation types are innovations around business models and innovations to create unique customer experiences.

I'm sure that many of you seek very interesting and robust methodologies and tools to further your innovation efforts, and some of them may actually be useful. I suspect that a good rule of thumb is that the most robust or difficult the tools is to understand and use, the less real insight and value it creates, while very simple tools - scenario planning and customer journey mapping as two examples - create value because they force you to adopt very different perspectives than are typical. Often times the simplest tools are the most powerful and most robust.

Book Review: LinchPin

2010-01-26T04:15:00.000-08:00

Every once in a while an opportunity comes along to explore something really new and different, and I'm happy to say that you're experiencing one of those events. Seth Godin is releasing a new book entitled LinchPin, and is trying out a completely new "media" strategy relying on bloggers. I was honored to be asked to participate. You'll find his entire book launch on the Squidoo lens: http://www.squidoo.com/the-Linchpin-Posts.

Seth sent out sections of his book in advance and we had a chance to read those sections and ask questions of Seth about the book. I've also had a chance to read Linchpin and will provide a review and some of the Q&A between Seth and myself.

First, the review of LinchPin.

Seth has tapped into a number of trends over the years and LinchPin is no exception. However, I think the concepts he elaborates in LinchPin are probably more important and more sustained than any of the trends from his previous books. The concept behind LinchPin is that many people need to take ownership of their jobs and lives, and demonstrate the value they can offer by becoming "indispensible". People can become indispensible not because of their power or position, but because of the way they work - what Seth calls "emotional labor", and what I like to call engagement and passion. I think with LinchPin he's tapped the mother lode.

Too many people accept a day's pay for a day's work. They clock in, do their work like automatons, and clock out. Most businesses never tap the creativity or passion that people have, and most people believe that stuff belongs at home, or in the gym, the lodge, the classroom or the garage, rather than in the cubicle. The truly indispensible people are ones who bring all that passion and energy to work, and deliver incredible experiences for their partners, customers and compatriots. I think many people are unsatisfied at work because they aren't willing to tap into their real energy and passion, and don't believe that that work would be rewarded and valued. In a time when everything can be outsourced, only commitment, passion, creativity and engagement will be differentiators.

This raises both an opportunity and a concern. People who are too energetic, too committed and too engaged can be a threat to the regular business practices of most businesses. So, the LinchPins may find themselves as outliers in their business, which can be discouraging, or they may find the culture changing to meet their leadership. In other instances LinchPins may have to form their own businesses to be able to work they way they want to work. A word that is frequently repeated in LinchPin is the word "unique", and there are few firms and organizational cultures that embrace uniqueness today. While I believe Seth's on to a core need that many people have, it may be some time before larger organizations embrace the creation of more LinchPins.

Now, my Q&A:

JP: Why "LinchPin"?
SG: My goal in the title was to let people know that it doesn't matter if the world says they are in charge, it doesn't matter if they've been annointed - what matters is taking the steps to become something we can't live without.

JP: Can a person become indispensible within an organization or do they have to stop complying with an organization in order to do so?
SG: All of us have worked with people who would be awfully difficult to replace. Not because of power, but because of their contribution.

JP: Isn't scalability and repeatability important? Can we be an economy of thousands and thousands of entrepreneurs? What work will remain within a corporation and what will be outsourced?
SG: Of course we need these jobs (cogs that exchange a day's work for a day's pay) but that doesn't mean you have to choose to do them! My point is that we have been literally brainwashed by industry to believe these are good jobs and that we should shut up and do them. It's just not true.

JP: Isn't it a bit much to claim there's a "multi-generational conspiracy designed to sap your creativity"?
SG: No, I stand by my hyperbole. The fact is, large corporations and the engines of commerce have been aligned with the government (and vice versa) for a hundred years. What we've done is interntionally set up a system (and it's worse in Asia) designed to produce compliance.

JP: What, exactly, is emotional labor?
SG: I'm using it to describe the hard work of being present, of being creative, of confronting fear, of making a personal connection with colleagues and customers. Work used to be put cog a into widget b. Now work is making a customer's day, in whatever way you are able to.

JP: What's the shift from "mediocre obedience"
SG: I think we're seeing a profound shift in the culture, particularly among educated and sucessful individuals. Part of it is the environment, part of it is the economy and part of it is aging boomers. The direction we're heading, I think, is that we're going to reward and respect artists, not consumers.

JP: Why the focus on "giving"? It seems most corporations are more focused on "taking", especially the CEOs of larger organizations.
SG: I'm arguing that the reason we pay these guys so much is that we're afraid to stand up and do things on our own. The resistance pushes us to be bystanders, so the board and shareholders happily give away the store to the guy with the guts to stand up and say "follow me". We won't need great men when we embrace the fact that they're no better than us, they just figured out how to lead a tribe.

JP: Is this book meant to encourage people to create their own destinies and follow their "art" or meant to inspire people within larger organizations to change their cultures?
SG: Art is not painting or poetry. Art is making a difference, leading, doing the thing no one thought of before, doing work that matters, wherever you are, whatever you do. The resistance would like you to believe that fitting in is what's expected, safe, required by the shareholders, essential for efficiency, blah, blah. Bullshit. The big secret is that every organization needs multiple LinchPins. Why not you?

Voting Against Innovation? Really?

2010-01-22T14:05:00.000-08:00

Bruce Nussbaum is a voice I generally respect in innovation, but this time I think he's got it exactly backwards. In his latest post he argues that the Supreme Court ruling on campaign finance law locks in all advantages to large corporations. His position is that since large organizations have buying power in political campaigns and lobbying organizations, they can elect politicians who will do their bidding. Thus, his reasoning goes, any new innovation or idea will be regulated or legislated out of existence by pliant politicians who are in the pockets of big commercial contributers.

How many times do we have to see this movie? I remember Rollerball, when I was kid. We were all going to be singing the Coca-Cola national anthem. Every ten years or so we are warned that big corporations will take over our government and will dictate to us, the consuming population, who will be powerless to resist. This is such a nihilist view of the world I scarely know where to begin.

Let's frame this around innovation, since that's where these concepts intersect. Nussbaum is asserting that big corporations will be able to block or eliminate innovation that threatens them if they are allowed more opportunity to fund political campaigns. So, I guess Twitter, Facebook, MySpace and all the social media will simply disappear, and we'll all become compliant drones. The ever increasing capability for ANYONE to complain and build social networks to others who feel the same way will only grow, so I find it hard to believe we won't be able to build coalitions to push back against any infringements of our needs. Second, I don't recall Yahoo or better yet Microsoft even noticing Google or taking them seriously, and if they had attempted to regulate or legislate Google out of existence many people would have rebelled. Nussbaum seems to think there are a cabal of people standing ready to tell us how to think and what to buy, and those people will be unleashed with a vengenace when the corporations can support candidates. News flash: corporations, large and small, have competing interests and different goals. They don't work in lockstep or we'd have far fewer choices in our markets. And this supposition ignores the fact that we import much of the products we use, so unless we are willing to outsource all innovation, the US firms will have to at least keep pace with foreign innovation or build walls around our economy.

I find it very difficult to believe that the campaign finance laws will impact innovation. If large corporations in this country actually believe they can legistate or regulate their way around competitors, then they'll need to eliminate an entire generation of entrepreneurs in this country and build blockades against good ideas and products from a host of other countries. Once we've shot our children and walled ourselves in, it won't take long to realize we've become Zimbabwe and for those people who wanted choice and new products and services to overthrow their government, hopefully at the ballot box.

I believe Nussbaum is working from an old, corporatist model in which few companies control the media and dictate what we learn and how we interact. I think we are smart enough and connected enough that regardless of the amount of corporate financing that flows into Washington, we the people will be able to overcome any movements to limit innovation, if for no other reason than the quality of our lives depend on it.

What good innovators know

2010-01-21T05:29:00.000-08:00

There are a lot of smart people writing about innovation, and what it takes to succeed. I'd like to suggest that there is one relatively simple attribute that all firms that demonstrate innovation success share, and that's constancy. While others will argue for factors like culture, or leadership, or vision, or tools, I'll tell you that I think the mere effort of constantly trying to innovate is the real reason most good innovators succeed.

Why is constancy so important? Because innovation is not going to be successful as a discrete project. Innovation faces too many hurdles and upsets the status quo far too often. If innovation becomes a discrete effort, bounded with a start and end date, then it will not return the results that were hoped for, since everyone can breathe a sigh of relief when the project's finally done.

As Edison and countless others have demonstrated, you rarely get it right the first time, and if you are stymied by early failure, then you'll never find and implement the best ideas. Innovation, as has been pointed out by individuals with far more to say about it than me, will create some failures. Your job isn't to avoid the failures, since you can't predict them in advance, but to reduce the cost and impact of the inevitable failures. In other words, keep moving.

Another reason constancy is important is that people need to learn how to innovate and learn that it's OK to innovate. The firms we hold up as innovators - P&G, 3M, Apple, Google, Gore and so on all have long track records of innovation. 3M has considered it a core value for over 70 years. One could argue that this is a cultural bias. What I'll say is that anything that gets done repeatedly and successfully over time informs and shapes the culture. So which came first - the constancy or the culture?

Constancy also has something to do with success. Even if there are failures along the way, if a firm sticks to its guns and continues to innovate over time, the processes and techniques will improve and the firm will have increasing success. We all want the home run at the first at bat, but that's rare even for home run hitters. The Hall of Fame is full of people who played many, many years to achieve greatness, and is notably lacking in "flash in the pan" players.

We at OVO like to talk about consistent, sustained innovation processes that become part of the fabric of the organization - a way of life within the business. This, in my mind, is the only way to succeed at innovation.

Innovating in a regulated industry

2010-01-18T05:55:00.000-08:00

Here's a news flash for you: innovation is difficult to accomplish on a consistent basis. Even more so if the culture and management team of your organization is risk averse. And few industries are as risk averse as those that are heavily regulated by the federal government or state governments. Just last week I was told by a prospect that it was difficult to innovate in a regulated industry. Makes me wonder where all of the phamaceuticals, medical devices, insurance offerings and many other products and services came from, since they weren't hatched from the whole cloth. It's time to put the lie to "you can't innovate in a regulated industry".

This is, of course, an excuse which allows a company or team to avoid making decisions and stay within the status quo. It is ENTIRELY possible to innovate within a regulated industry, otherwise we'd never have created a pacemaker (for example) in the first place, and we'd never improved on it once it was developed. Tell that to people who are living with pacemakers and other implanted devices decades after their surgery. One might be able to argue that it's more difficult to innovate in a regulated industry, as opposed to an unregulated one, and that might be true. Regulated industries usually deal with human health, or where there is an expectation of disparate knowledge (financial services, insurance) between the company and the customer. However, the fact that a firm is regulated doesn't give it a pass for innovation. In fact, it may make the need for innovation even greater. Here's why: heavy regulation builds a comfortable fence around an industry, and the key players within that industry usually agree to divide the market up. They don't compete and don't offer new products and services, since that would rock the boat and cause work for the entire industry. Look at many heavily regulated industries - life insurance for example. There's exceptionally low innovation and rapidly increasing commoditization. Firms accept the fact that since they are regulated, they should not have to innovate, and all innovation happens at the margins, where disrupters can steal customers away.

Too often, the regulations become a "ceiling" for new products and services. Rather than dream up new products and services that customers need, then try to revise the regulations to fit those products, firms use the regulations as a hard and fast rule, never to be breached or violated. They are in a box of their own making and own choosing, and careful never to question the box. Again, disrupters are going to seek ways to make that box obsolete, and the interesting thing about most regulated firms is that they employ lobbyists, whose job it is to influence or change regulations. A truly innovative firm would identify products and services that met customer needs, then lobby for the changes necessary to implement those products, and force the rest of the industry to follow.

Regulated products and services face stiffer tests and constraints because they have the propensity or opportunity to damage us in some way - in our wallets or in our bodies. For that reason they should face higher hurdles for safety and communication. But that should not stop firms in these industries from innovating. However, the few firms that do innovate in these industries (ING in banking, Progressive in insurance, St. Jude and Medtronic in medical devices) are considered risky upstarts who disrupt the normally placid waters of the industry. Good luck to them. We need as much innovation in these industries, if not more, than we need in search engines, video games and cell phones.

Innovation Definitions matter

2010-01-15T05:28:00.000-08:00

I made what in hindsight is a fairly funny mistake recently. Working with a new client who wanted to become more innovative, we pressed ahead into a project only to realize that their definition of innovation was to have customers interact with their products in a technology showcase. When I think of "innovation" I think of teams using a number of tools and techniques to generate and bring to life new products, services and business models. When this team said "innovation" that's what I thought, and what I assumed. What they were thinking was something else entirely, and that didn't become evident until we developed a workplan. Then, the differences in the expectations and definitions were clearly exposed.

We failed at what should be an upfront discussion - that is, what does innovation mean to your firm? I've been around innovation so long that if I'm not careful I just assume that corporate executives that I'm working with have the same expectations and definitions as I do, and that can be very problematic. Definitions matter because they drive corporate expectations and commitment. If it seems "innovative" to have your clients interact with your products in a showcase environment, and that adds value to your organization, great. But in my mind that's not innovation. And also not my client's fault. It's mine, for not taking the time to understand what the word "innovation" meant when they used it, and what their expectations and best outcomes were.

Innovation is one of those words like "pornography" that, in the immortal words of the Supreme Court can't be defined, but we know it when we see it. Our client thinks it will be considered "innovative" if it allows customers to interact with its products in a high tech, high touch environment. They may be right. However, that's not really "innovation" in my mind, because they are not trying to use the facility to generate new ideas or bring new products and services to market. The center may become a marketing program, meant to create good will and more openness to the market, but not ascertain ideas or seek consumer input. This won't create new products and may divert funds from other efforts that would create new ideas, so it may be doubly risky, while seeming very innocuous.

The morale of this story is simple. As innane and obvious as it may seem, when the words "innovative" come out of your client's mouth, stop and ask for an example or a definition. If they can't provide one, then work with them to create a definition that you, and they, agree is correct, because there's simply too much room for assumption, and error, when the word is taken at face value. Too many firms, and too many people are simply throwing the word around for advantage, which leads to misguided expectations and disappointed consumers.

Just do something!

2010-01-14T12:37:00.000-08:00

I'm constantly amazed by all the talk about innovation that I hear within many organizations, and how little real action is taken. It's time, my friends, to gird up your loins and take action. Let's borrow the motto from Nike and decide to just do something.

If you are waiting for the sign from above (by that I mean your executive management) that you may now go and be innovative, stop waiting. Even if the sign comes, it will be so watered down and so filled with misdirection and uncertainty that you wouldn't act on it anyway. Act now, even in small ways to develop innovation activities and skills, so that you can then build on those activities and flesh them into new ideas, and new products and services.

When I say this to many mid and senior level folks I talk to, they want to know: what can I do to make a difference? There are a host of small actions you can take to start innovating, and as you do you'll build credibility and will attract others who are interested and want to work with you. If you never start, you'll never build the community or team you need to succeed.

Here are just a few things that are very easy to do, and very inexpensive to do, that just about anyone in any firm can do to add value and start innovating. Once you do these things you'll build your credibility and get to do even more.

Document trends and provide your sense of what they'll mean for your business in the near future. Yes, I know this isn't your job, but as it turns out it's not anyone's job in most businesses but everyone needs this synthesis. A well organized consolidation of trends, transitioned into a document that provides shape and clarity to a potential future outcome, is helpful to any organization. And, since no one else is doing it, you are now the expert. If someone disagrees, then you've attracted a compatriot who can work with you to provide a counterpoint. All innovation starts from recognizing an opportunity, issue or threat before others do. Trend spotting and synthesis can get your team there first.
Observe your customers. Go read the complaint letters. Read what people are writing about you online on Facebook or Twitter, or other blogs. Go watch your customers use your products. Become a customer of your products or services. Write down what you like, and don't like, about your products. This is free Voice of the Customer and Ethnography. As you do this you'll gain insights into unmet unarticulated needs, which are also a great opportunity for innovation.
Use brainstorming and other idea generation tools as frequently as possible, and use them in the right situations and contexts. Rather than pull a rarely used tool out of the toolbox ocassionally, use the tools regularly and effectively. In that way, idea generation doesn't seem so artificial, but a natural part of doing business. And since you're doing it regularly, you learn more about how to do it well.
Read the best books about innovation, to learn more about the best practices and tools, so when there are opportunities for innovation, you can recommend the appropriate tools and techniques. Learn to be a good facilitator, and understand the rules and techniques for idea generation. As your skills grow, you'll be asked to lead idea sessions for other teams.

There's always something you can do, and starting now is much better than starting when you finally get the OK. In many firms, the OK may never happen. Create a small innovation capability and generate ideas about the future, new product and service ideas, and help other teams generate ideas. You'll attract others who have similar needs and interests and gain incredible credibility. Eventually you'll be the go-to person for innovation. Don't laugh, I've been in at least two organizations where the head of innovation was simply the person who started doing innovation and was eventually recognized as the expert.

Innovation waits for no man

2010-01-08T11:17:00.000-08:00

One of my partners, who is an electrical engineer, let out a loud cry a few minutes ago. He was responding to an article I sent him about a new electical gizmo that monitors eletrical usage in the home. He was upset because he came up with a very similar idea about a year ago, but he failed to move on it and assumed it was safe to put on hold for a while.

This points up an innovation fallacy, and a separate truism. First, the fallacy. Good ideas are rarely conceived in isolation. Even really good ideas often happen in several different places relatively simultaneously. So while you may think your great idea is unique and original, there's a good chance it isn't. The truism that follows is that it's not the individual or team that conceives the idea that wins, it's the individual or team that commercializes that wins.

Let's look at the fallacy first. As is fairly well documented, Newton and Leibnitz conceived calculus at roughly the same time in history with no interaction. Alexander Graham Bell and another inventor applied for patents for the telephone on the same day. Good ideas to solve seemingly intractable problems or address emerging opportunities are rarely unique. Simply ask yourself - have you ever seen a new product or service and thought "I thought of that years ago". There are enough smart people reading the same news and watching the same events unfold as your team, so many ideas are likely to be spawned simultaneously in a number of geographies or in a number of different companies.

This places all the more emphasis on commitment to your ideas. If you have a good idea, then you need to move as quickly as possible to prototype it, pilot it, assess it and gain customer feedback. Don't assume you have time on your side, or that your idea is significantly unique. The latter is a fallacy and the former is a trap. Time is not on your side. As people become more aware of opportunities or challenges and attempt to create their own solutions, more people will try to innovation a robust solution. Some of those firms won't have the scruples to evaluate, test and refine their ideas. They'll stick an idea out there, gain feedback and learn from their products and mistakes.

Innovations wait for no man. Since it's easy to show the same ideas are often conceived by disparate groups at roughly the same time, you need to be prepared to move on your ideas as soon as possible. This means you need a process or methodology to enrich, nurture and develop ideas quickly, and a piloting or feedback loop to gain customer feedback. Once you've received the feedback, you may then decide the idea is too nascent or the needs still too undefined for your idea, and place it on the shelf. Otherwise, someone else is likely to beat you to the punch, and leave you yelling at your monitor that you had that idea a year ago.

The race goes not to the swift or the battle to the strong, but success in innovation goes to the confident team prepared to act on its ideas.

The innovation "silver bullet"

2010-01-06T13:56:00.000-08:00

When I was a kid, only the Lone Ranger and Werewolf hunters used silver bullets. It was never really clear to me why a guy in a mask with a native american counterpart needed fancy bullets, but who's to say? The need for silver bullets when hunting unholy creatures of the night makes more sense to me, at least in an allegorical sense. What isn't clear at all is when the "silver bullet" became synonymous with a big win. And, more recently, why anyone would want a "silver bullet" in innovation.

Today's diatribe was sparked by a recent Accenture survey of executives about innovation. One question asked the executives to respond to "My organization is looking for the next silver bullet rather than pursuing a portfolio of ideas". Executives could strongly agree, agree, remain neutral, disagree or strongly disagree. 58% of the executives who responded strongly agreed or agreed with this statement, and another 16% were neutral. Of course every firm hopes for significant, disruptive returns from innovation, but placing these unreasonable and outsized bets on innovation to deliver the one "giant killer" idea is unrealistic and unfair to the innovation teams.

What's wrong with a big, hairy audacious goal? Nothing. But when you place so much emphasis on one exceptional idea, you create a number of terrible outcomes. Those include:

Ignoring a number of really good ideas since they aren't the "silver bullet"
Placing unreasonable expectations on teams that aren't used to innovating, which are already under significant pressure with limited resources and timelines
Placing all of your eggs in one basket

As I like to say, when I go hunting for whales, I like to keep my eyes open for the other big fish. If I bring home a tuna or marlin, I never come home empty handed. But if, like Ahab, I am so single minded that only the big white whale will do, then more likely than not I'll come home disappointed. Big, game changing innovation is difficult to do, even in firms that do innovation well. It's notoriously difficult in firms that under-resource innovation or don't have good methods or processes, or a culture that resists innovation.

What I'd prefer to see, and what we at OVO advocate, is the development of a portfolio of ideas, spanning the gamut from incremental to disruptive. What we know about innovation is that many ideas won't become new products and services, starting out we just don't know which ones will fall by the wayside. Working a broad portfolio means that even when some ideas fall out, some still remain. Chasing one single, game changing silver bullet idea is impractical, often wasteful and usually doomed. And once a team fails to deliver that silver bullet, innovation is ruled a failure, when it was the goal, not the process, that was the problem.

Are our management teams really that strategically bankrupt, to demand a "silver bullet" idea? Does every executive team demand the "iPod" of their marketplace from their innovation teams? Are these simply mind games that executives play to "stretch" the thinking of the teams, or do they actually expect these kind of ideas are laying around for the taking? Note that exactly one "iPod" idea has been generated in the MP-3 market in the last decade. If this is so easy and so straightforward, why hasn't there been a disruption in that marketplace?

Silver bullets are for killing werewolves. Innovation is for creating a pipeline of incremental and disruptive ideas for new products and services. Any executive who demands a "silver bullet" from an innovation program doesn't understand the purpose of innovation and has unreasonable expectations about the outcomes.