Friday, October 06, 2017

We could all use a little Sharknado thinking

I saw a sign in my Twitter feed recently that spoke volumes about innovation culture.

 Image result for somebody came up with the idea of sharknado

Let's contemplate the audacity of suggesting an idea about a movie full of sharks in tornadoes for just a moment.

Creativity and Combinations
To suggest a movie about sharks in a tornado demonstrates creativity.  Good innovation often happens when you combine two unexpected attributes or components together to create something new.  In this case I think everyone understood that Sharknado was over the top. And why not?  If you look at the rest of the movies being made, something a little tongue in cheek makes sense.  The first thing to take away that someone in Hollywood did right from an innovation perspective is making unusual connections.

The guts to go beyond the obvious
But beyond the idea of combining unlike objects, imagine the guts it takes to suggest something so new and unusual.  In many organizations even reasonable ideas get shot down very quickly.  Participants will wonder about profitability or ROI.  Others will question customer demand or technical feasibility of ideas that seem possible and not outlandish.  That's because all of the possibility and "wonder" has been squeezed out of us in the corporate world.  The vast majority of people live lives of quiet desperation, recognizing opportunities but quickly looking away, aware of the challenge to create new ideas or the price one might pay for suggestion them.  What environmental, economic, and emotional conditions must exist for people to suggest outlandish ideas?

Accepting the impossible
Now, place yourself back in that setting, where some low level production assistant has just suggested making a disaster movie, one that places sharks (looking back to Jaws and other killer aquatic animals) in tornadoes (again, looking back at classic disaster movies).  The idea combines two traditional Hollywood tropes, but in an unexpected way.  You'd think even Hollywood producers would have laughed the idea out of the room.  But they didn't, and that's why Hollywood creates more stuff (that's good and bad) than most other organizations and industries even contemplate.

Some producer or producer's assistant had the guts to say:  tell me more.  Rather than shooting down an idea that marries two very unlikely protagonists, someone accepted the nearly impossible idea and said, go further.  This is what divides innovators and creatives from the realists and the execution-oriented folks.  Realists and operationalists would scoff. They'd say "Sharks don't get caught up in tornadoes" or "That's unrealistic, no one would believe it".  Yet today we walk around with more processing power in our smart phones than a spaceship had that carried men to the moon.

We in corporate America need to regain a sense of wonder and possibility.  We need to stop thinking about what customers need next week, and start imagining what they'll be doing or what need they'll have in 3, 5 or 10 years.

But that's Hollywood, you'll say
Some of you reading this will argue that it's Hollywood's job to create funny, compelling, mindless entertainment, and that means stretching the genre or combining or creating really different concepts to attract and retain an audience.  But isn't that also our jobs in corporations?  To create really interesting and valuable products to attract the attention and revenue of new and existing customers?  Do we really think that in a time and place where change happens so frequently, societal norms and tastes shift rapidly, where information flows so freely that we can win by developing safe, me-too products?

Did AirBnB or Uber create a safe, me too product, or did they dream up something new, audacious and quite different that clearly threatens the existing industry players?  Corporations, in all industries and of all sizes need to get some of this Hollywood spirit, to foster new and outrageous ideas, to encourage new growth, to create new and interesting products and services for customers.

Conclusion

We need a little more Sharknado thinking in corporate America, and to get it we'll need a lot more Hollywood style interaction - mixing unusual stuff together, extending ideas or concepts beyond the breaking point, being willing to generate and speak out loud really outlandish ideas, with the sense that someone will say:  tell me more.  The people in Hollywood aren't that much more creative than the folks you'll find in many Fortune 500 companies, but they have an expectation and culture of creating new things, and a tolerance and expectation of failure and experimentation that many companies lack.


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posted by Jeffrey Phillips at 6:42 AM 0 comments

Tuesday, October 03, 2017

Authoring ideas

As a sometimes writer of blogs, white papers and even a few books, I understand the challenge of facing a blank page, trying to form the words into meaningful and insightful sentences.  A lot of times the concepts and ideas that sound so good in my head get misplaced and mis-translated on the page or simply don't ring with the same clarity when written that they seemed to have when I thought about them.  Writing in any form is a challenge, and increasingly I think writing is very similar to innovation.  Writing, after all, is the act of dreaming up something new to say about something old, bringing new concepts or new stories to light in a new way.  Writing, like innovating, is creating.

What's more, writing, especially stories, takes real creativity.  Tolstoy wrote that there are only two basic story lines:  a person goes on a journey or a stranger comes to town.  When you think of the diversity of stories, the creativity it takes to make them compelling and the range of story types, characters and plots, you can easily see that writing is creativity and innovation.  So perhaps we innovators can learn something from good writers.

What good authors know about writing

It turns out that many writers don't think they know much about writing.  Joe Fassler, who wrote the article that prompted this post, says that many authors find writing difficult, frustrating and challenging.  Even those that you would think are "experts" describe their struggles.  Steven King, Amy Tan and others talk about writing and re-writing, often rethinking and reworking their ideas and stories over and over again.

Reading Fassler's article made me think of my own writing and how it relates to innovation.  There are a number of interesting parallels.  First, when writing an article, blog or story, the author must have an interesting story to tell, a new perspective, and make the story as interesting as possible to the potential reader. In the same way an innovator must target customers who have needs, and shape ideas into new products or services that customers want to buy.

Second, authors will tell you (and they do so repeatedly in the article) that first drafts are for discovery and experimentation.  These drafts identify gaps and weaknesses and potential areas of opportunity or discovery.  Amy Tan notes that she throws out 90 to 95 percent of her initial work.  Innovators face the same challenge, but often have very different expectations.  In business we think because we have detailed processes and deep experience, we should get ideas right the first time.  Instead we should learn to diverge and converge and iterate until the ideas achieve their correct shape, but time and cost pressures rarely allow innovators to fail, restart and reshape ideas.

Finally, the article says that the artistic process never gets easier. Even experienced authors struggle with phrasing, story lines and plots.  They constantly work at their craft.  Innovators could learn from this dogged determination.  Most innovators arrive unready and unseasoned, attempt to perform an innovation activity quickly, declare victory once they've defined a new product or service, and return to their regular jobs.  They don't hone their innovation skills and are surprised when innovation is difficult or requires learning, discovery and iteration.

Paralyzed by your thoughts

One author described being "paralyzed by her thoughts".  This statement made me think of many people in idea generation or brainstorming sessions who are unable to generate ideas in the moment, placing far too much pressure on themselves to get an idea right.  The pressure we place on ourselves as writers or innovators is often detrimental to creative thinking.

The author of the paper sums it up nicely when he says "I’ve learned, bigger feats, bolder ideas unfold over the long haul—in the space where success feels uncertain, even unlikely".  Good innovators recognize the agony and humility in this statement, but the best ideas do take time and require hard work. 

One final quote that I think captures both writing and innovating:  "I'll keep at it stubbornly and gladly until the job is finished".

Innovators and authors have similar jobs and similar challenges.  Most authors write because of a passion for a story or an idea, and learn to iterate and rewrite/rework.  Most true innovators also have a burning passion for an idea or a problem, and most successful innovators are more than willing to describe their experiments, their failures and their iterations that ultimately led them to success.  We need to understand how these two jobs are similar, and what authors and innovators could learn from each other.
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posted by Jeffrey Phillips at 7:31 AM 0 comments

Tuesday, September 19, 2017

Context Matters in Successful Innovation

I think we often over complicate the work of innovation, because we believe it cannot be simple and straightforward.  After all, how can an activity that can disrupt an industry, create compelling new products or services and reap significant riches be simple?  To drive all of this change, certainly innovation must be difficult and complex, right?  Consultants often benefit from this assumption that innovation is difficult or unusual.  Unfortunately the presumption that it must be difficult also means that many people are afraid they don't have the requisite skills.  Fear, uncertainty and doubt about innovation and the knowledge and skills it takes to do it well mean that far less innovation is attempted than probably should be.

In order to accelerate the pace of innovation and increase the amount of innovation that's done, we need to simplify it, or at least remove some of the uncertainty.  To do that I'm going to argue in this relatively short post that innovation has three important deliverables:
  • problem definition, 
  • ideas and 
  • solutions.
Between those deliverables are two very important activities that illuminate and contribute the the generation of those deliverables.  Those two activities create context and content. While we focus on the deliverables it's actually the content/context that really drives innovation value.  Let's review the deliverables and the activities between them to understand what I mean.

Problems/Opportunities

The first real deliverable in any innovation activity should be defining and scoping an interesting problem or opportunity.  To ask for innovation without defining a need or opportunity is useless - but to innovate based on a key insight, opportunity or problem is exceptionally valuable.  Your first goal is to find the right problems to solve, the right opportunities to address.  I don't have enough pixels in this blog post to tell you how to do that, but have written about this previously.

Too many innovators and innovation teams start out without a good problem definition or opportunity, and this lack of scope dooms their work.

Ideas

Many people think an innovation activity begins with an idea, but they are wrong.  An innovation activity begins with a problem or opportunity that you investigate, and learn more about, and discover needs, all of which is context, and the next deliverable is a set of viable ideas to solve the problem.  Ideas are simply a waypoint in an innovation process or exercise.  Unfortunately many people think they are the output. 

And, even when innovation teams generate ideas, they often limit their thinking to small changes, incremental ideas, and a small handful of ideas rather than fully exploring the innovation opportunity.

Solutions

Innovation doesn't begin or end with ideas.  It ends with a valuable solution that customers can acquire and use, that makes their lives better or easier or more valuable.  There really isn't any innovation without this final value realization, so a valuable solution, well launched and well marketed, is the final deliverable of an innovation activity.

Now that we've identified the three deliverables of an innovation activity, let's turn to the activities that shape and inform the deliverables:  the context setting and content development that helps shape and inform ideas and solutions.

Trends and Needs:  Context/Content between problems and ideas

Once you have settled on a problem or opportunity to solve, you need to back up and gather context.  What are the issues?  What are the challenges?  Why does this problem or opportunity exist?  Who else is working on it?  Do customers understand the need or opportunity?  Is there value in solving it?  This context helps you shape the problem and begins to point at potential solutions (ideas).

We typically frame this in two activities:  trend spotting to understand the evolving nature of the world, the market, customers and technologies, and customer insight gathering, to understand the gaps and needs of customers and what they value.Without this insight, discovery and context you cannot generate meaningful ideas, and if you do manage to generate good ideas you won't be able to describe to anyone why they matter.  Too often innovators assume that they know what customers want or need, or simply believe their solutions and technologies are so valuable that they can address any needs or gaps.

Evaluation, Prototyping and Development: Context/Content between ideas and solutions

Once you have good ideas you must evaluate them against customer needs, corporate viability and competitive reality.  Then you must determine how to produce them and launch them in a timely fashion.  These activities too require investigation, discovery and context setting.  In many cases if the ideas are very new or different, you may need to create new product or service development capabilities or develop new business models or channels.  This may require new discovery and new experimentation - something your existing product development processes won't value or understand.  You may simply need new context for new ideas to be realized as new products.

Where the real work lies

The real work of innovation lies in this context and content development, between a good problem statement, ideas and solutions.  We often get far too caught up in these discrete deliverables, never realizing that the value lies in how well we understand the context and generate and evaluate the content between the deliverables.  If you want to know - its in these content and context activities that the innovation magic happens.

We innovators place far too much emphasis on the deliverables of innovation, and on ideas in particular, when we should be focused on the generation and understanding of the context and content activities that must occur between the deliverables.
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posted by Jeffrey Phillips at 5:54 AM 0 comments

Monday, September 11, 2017

3 innovation types: evolution, preventative and creative

I was thinking over the weekend that for years we've positioned innovation incorrectly.  Too often we position innovation as creating a new and valuable offering or solution, ready when customers are ready to demand new products and services.  In other words, we've positioned innovation as something to do to prepare for future business, future needs and future demands.  Innovation does answer for these issues - identifying needs and developing ideas for products and services for unmet and perhaps unanticipated needs. 

But in the hustle and bustle of day to day business, the main focus is on the now.  What can you deliver today, this week, this month, this quarter?  How can you help me achieve my quarterly revenue and income goals?  Sure, the future is nice, but I'll worry about that when I get there.  With this mentality, cost cutting, becoming more efficient, gradual but general improvement is the key focus, not innovation per se.

Making innovation more relevant right now

So the question becomes, how do you make innovation more relevant, right now, to executives and managers who are so focused on the short term?  One approach would be to focus on the "short term", what can innovation do for us to put better products on the shelves in less than 90 days.  The general answer to that, given product development cycles, channel issues and customer awareness is:  no much, except perhaps in the virtual world.  Building, modifying and releasing a physical product is going to take more than 90 days, and 90 days is the magic timeframe.  Anything we can do to impact revenue and cost within 90 days is good.  The timeframe beyond 90 days seems almost imaginary.

Innovation, where practiced at all, becomes incremental because of this pressure to generate rapid results.  Even if we can speed up innovation activities (we've run innovation programs from problem definition to fully developed prototypes in under a week) you've still got to go through the product development and launch cycle.  This means innovation will be focused on items and attributes around the periphery - messaging, packaging, claims, rather than interesting or radical innovation of the product or solution.

Another approach is to use innovation to ferret out efficiency gaps.  If we can't create better products and services, can we use innovative thinking to shorten any barriers or gaps to bringing our products to market with less cost or with fewer inputs?  This has been the management focus for years - right-sizing, outsourcing, automating.  It doesn't necessarily lead to new products but may lead to less expensive products or more rapid turns of incremental products. 

So, while we can speed up the existing processes and use innovation to identify gaps or inefficiencies, or use innovation to make some changes to the periphery of the product or service, there's not a lot of innovation that can be delivered and impact the bottom line in 90 days or less.  So we need to think about innovation differently, or perhaps in different categories.

Categorizing innovation

Clearly, as I've defined above, there's a real need for focus on process and peripheral innovation.  These innovations are meant to gradually improve the product or service, cut costs and deliver more bottom line value, and to do so quickly.  The driving pressure for this innovation focus is cost reduction, time reduction and the desire to show customers something "new", even if the newness is relatively minor.

There's also a need for preventative innovation.  I'll call any work to blunt attacks by existing competitors or new entrants as preventative. This kind of innovation identifies potential openings and gaps in a product line, or new "in demand" features or benefits that you don't currently offer.  Preventative innovation considers a slightly longer time frame - perhaps 2 or 3 quarters - doesn't necessarily create a new product as much as identify missing features or product line gaps and carefully evaluate what competitors and potential entrants are doing. 

Then there's radical or disruptive innovation, creating a completely new product or service, or disrupting an existing adjacent market.  This kind of innovation takes focus and planning, commitment for quarters or even years, and full commitment over several planning and budgeting cycles.  This kind of innovation ends up on the magazine covers and is what every CEO wants but can't quite understand how to deliver given the demands for quarterly results.

Three horizons

The three categories I've defined above are exceptionally similar to the "three horizons" model that many innovation consultants talk about.  But rather than call them "incremental", "radical" and "disruptive" I think it makes more sense to describe them based on what they are:  constant evolution, preventative and creative.

The first type of innovation is necessary (and is almost always underway) because your products and offerings can't sit still.  You must find ways to cut costs, make your delivery more efficient and tinker around the edges of existing products.  The second type of innovation is probably the least understood, because too many companies don't understand what their competitors are doing, and are often shocked by the offerings of new entrants.  Companies need to do a lot more preventative innovation, from a defensive point of view, to ward off new entrants and sustain or grow market share. 

Everyone acknowledges the importance of creative innovation - that is, the creation of a completely new offering that radically changes the competitive landscape - but few truly know how to do it or are willing to commit the resources to do it.

Investment cycles

Here's where every innovation consultant will lecture you about how much time and investment should be made in each of these three portfolio segments.  You can think about the three horizons, or my evolution, preventative and creative phases, as components of an innovation portfolio and next ask:  how much time, energy and investments should go into each one?  The general rule of thumb answer is 70:20:10.  Seventy percent of your innovation effort should go into evolution, 20% into preventative and so on.  But what if your budget for innovation is:  zero?  What if executives demand innovation but don't provide budgets or funding or resources?

The inevitable fall back position is to conduct efficiency innovation (evolution) because that's something your teams understand and can do relatively well now.  And, of course, you'll build and staff one high profile team to explore some really interesting innovation (creative) but they won't have the commitment or funding to stick it out - it's merely window dressing, because you expect to show some immediate results from the evolution innovation in the next few weeks and everyone will be satisfied.

Let's change the language

I think innovation champions and teams would do themselves a big favor by refocusing innovation language and talk about innovation in line with processes and outcomes.  We can flavor our language with:  evolutionary innovation to deliver short term benefits, preventative innovation to resist new entrants and sustain market share, creative innovation to win adjacent markets and customers. 

Once we win the language battle and demonstrate we can deliver on evolution and preventative efforts, we can get the funds and resources to do truly creative innovation.
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posted by Jeffrey Phillips at 6:23 AM 0 comments

Wednesday, September 06, 2017

Innovation lessons from Lego

In television, an outlandish episode that seeks to introduce revive a series often signals the eventual downfall of the show.  Those old enough to remember the TV series Happy Days will remember the episode when Fonzi jumped the shark on water skis.  This gave us the expression that something had "jumped the shark", an event signalling an inevitable downfall.

Today I'm wondering if making a movie about toys is a signal that something has "jumped the shark".  In strange and disappointing news, Lego announced that it was facing dire sales projections, with growth slowing from over 25% per year to low single digits.  Strange, when just a few years ago Lego was on top of the world, with great new toys, Lego kits, Lego Robots and the Lego movies.  While the management team blames internal complexity for the slowdown, those factors don't necessarily contribute to slowing sales.  Rather, I suspect that a company that had been on the brink of bankruptcy only a little over a decade ago discovered how to innovate in desperation, and began to neglect innovation as growth accelerated.  What we are seeing now is the aftermath of too little innovation and too much marketing.

What lessons can we learn?

Of course I should admit I'm doing this analysis from a distance, without complete information since Lego is a private company, but over the last few years Lego hasn't done nearly the innovation or introduced nearly the range of products and services that it did from the mid 2000s until 2012 or so.  Lego management turned the company around in the mid to late 2000s, and growth accelerated, only slowing in the last year or so.  The signals were out there, of course.  A new CEO was hired and let go within only 8 months.  What can we learn from Lego's example?

Growth can lead to bureaucracy and risk avoidance
Lego may be challenged by its aggressive growth, and with that growth came size and complexity.  However, and complexity isn't necessarily a factor in its innovation success, unless Lego allowed complacency and bureaucracy and risk avoidance to grow as sales grew.  Innovating at the brink of bankruptcy clarifies the mind (Steve Jobs would agree) and forces companies to focus on what's really important.  Getting large and perhaps bureaucratic can mean that concerns grow about taking new risks.  Internal bureaucracy didn't cause slow sales growth unless it blocked new innovative products or redirected investments.  Lego probably just lost some of its edge and taste for risk and innovation.

Only the paranoid survive
To me, one of the most important take aways should be, you simply cannot become complacent.  Good innovations from just a few years ago will only sustain your growth and differentiation for so long.  Customers are hungry for new solutions, rapacious in their research and unforgiving in their quest for new stuff.  In the past products and solutions had long shelf lives.  You could create an interesting product and merely tweak it, adding a handful of new features every few years.  Those days are over.  Customers demand and expect new capabilities and features on a regular, recurring basis.

Companies need to gin up a consistent innovation program which aims for incremental and disruptive innovations to occur all the time.  Lego is just an extreme example of desperate but winning innovation to avoid bankruptcy followed by a period of less interesting or less successful innovations while harvesting the profits of the prior innovations.  Lego and companies like this are particularly subject to this boom and bust cycle because of their target audience (children and teenagers primarily) who age out and don't want the same toys their siblings or parents had.  But while Lego is an extreme example, companies in every industry should take note.  From the peaks of profitability and industry acclaim to laying off 8% of its workforce in a period of only a few years.

Explore the adjacencies
I had hopes for Lego when they built some of the early Lego robots, because 1) the robots were cool 2) the robots extended Lego's audience into older kids, teens and even adults and 3) they were more expensive and had pull through.  But more importantly the robots were an exploration of an adjacent market or customer group.  Good innovators must constantly evaluate the adjacent markets and customer segments and provide new capabilities, features and products that entice new customers.  The apocryphal story is that Lego discovered lead users building robots with basic Legos and entered the market with their own product.  If that story is true, perhaps it's time for Lego to go back to evaluating what users are doing with Legos and capitalizing on new adjacencies.

The quote from the Lego chairman that he wanted to simplify the business model in order to reach more children suggests that Lego isn't reaching for new adjacencies, but doubling down on a fickle core market.

Grow up but don't grow old
Lego's problem mirrors Disney's problem in a way.  The business scales, but only so far.  Both attract children and young adults, but have difficulty really capitalizing on the adult market.  Disney has made forays into music and movies with some success, but they should be able to win more share and more business from adults.  Both of these firms need to grow up (expand their customer base using their trusted names and capabilities) but not grow old (build sclerotic bureaucracies that resist innovation).


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posted by Jeffrey Phillips at 7:43 AM 0 comments

Thursday, August 24, 2017

You don't lack time to innovate. You lack allocation and purpose.

You'll forgive me if I lapse into a bit of consultant speak - can't help but do so since I've been in consulting for many years.  One of the factors that dictates what people do as consultants (and in other jobs or industries where time is tracked to projects or other expense categories) is the availability of charge codes.  Everyone knows that lawyers, for example, typically bill their time in 15 minute increments.  They need not only to bill their time in these time segments, but they also need a "charge code" - some mechanism to associate the time they just spent to a client, a business development activity or some overhead charge.

As consultants, most of us are no different.  Regardless of how you ultimately bill the client (time and materials, fixed fee, gain-sharing or other mechanisms) almost every consultant and consulting firm I'm aware of tracks consulting time.  I'm sure the same is true in many other industries where people are accountable for a time sheet at the end of a week or month. 

Tracking Time

In a consulting firm, where you spend your time matters, especially if you are expected to generate revenues by billing clients.  As a consultant one of your primary goals is to generate enough business to sustain your salary and overhead costs.  A second goal is develop new and interesting value propositions or skills that can provide customers with new insights and create service differentiation for yourself or your company.  In the consulting business we call this "practice development".  A third goal is business development, spending time to talk to new prospects and existing customers about new work. Finally, in every business there is some time that is simply "overhead" - filing, retrieving data, filling out time cards, doing stuff that drives the business forward but isn't billable.

As an individual with a time sheet, you are constantly evaluating your time commitments:  how much time for this customer?  How much time and effort for that customer?  How much time in business development? How much time in practice development?  Time and how it is accounted for, becomes a major consideration in everything you do.

Cobbler's Kids

Which is why even consulting firms need a charge code for innovation.  While we in the consulting industry are good at tracking and allocating time, we aren't always good about spending time innovating our own products, services and business models.  And time allocation matters - if you have a goal of being 70% chargeable, that's where your focus and emphasis will be.  Which means you'll spend more time with customers and less on business development, practice development and lastly, of course, will be innovation.  This is why even consulting firms that lead innovation efforts are often like the Cobbler's kids - they have the worst shoes.  Even those of us who talk to our customers about making time for innovation often fail to do it well.

If we, who track time so assiduously fail to define time and account for time spent on innovation, what must it be like for corporate practitioners who don't account for their time or worst, don't have specific time allocations?  As we know, innovation is very important but rarely urgent, so it frequently slips down the "to do" list until it becomes an utter necessity, at which point it becomes a "rush job".  No time allocation, no fixed expectation of time spent in innovation and an acceptance of allowing innovation to fall to the bottom of priorities mean that very little time is spent building skills to become better at innovation, let alone actually doing innovation.

What If

But what if everyone in your company had to account for their time, and what if everyone had a specific time allocation for innovation?  That might differ depending on the individual, their experience and interest in innovation of course, but what if at the end of each year you could look across your team and see how much time an individual spent building innovation skills and contributing to innovation projects.  Wouldn't that be valuable as a manager?

Wouldn't the signal that people will be expected to spend time on innovation, and that time will be managed and accounted for, send signals about the importance of innovation and the expectations that innovation must deliver results?    All too often we hear that people within corporations don't have time for innovation.  That's because they believe they are 100% allocated to their "day jobs" and can't afford distractions or time away.  What if managers and executives specifically allocated and measured time spent in innovation by individual, team and department, and set goals for each individual or group, and examined the outputs and outcome.  Do you think people would find time for innovation?  Do you think more innovation would get done?  Of course the answer to these questions is "yes".

Innovation with a purpose

But the final twist to this story isn't just that people should spend significant time, but that they should be focused on significant opportunities.  It's easy for people to commit 5% of their time to innovation and to generate really incremental ideas.  That outcome isn't really all that better than what happens today.  Beyond simply allocating and evaluating time, management teams should include specific portfolio goals - 70% of your innovation time on incremental tasks, 30% on disruptive ideas, and then measure against those goals.  If every individual or team in your company spent 5% of their time on innovation (100 hours in a 2000 hour work year) and 30% of that time was focused on disruptive innovation (30 hours per individual per year), could we expect some really new and interesting ideas?  You bet we could.

What's holding innovation back?  Time.  Time to think, time to explore, time to experiment.  And strangely, we aren't time deficient.  Most people work a 9-5 job and spend inordinate amounts of time in meetings where very little gets decided or done.  If we could reclaim even a modest amount of that time and reallocate it to more important activities, and direct those innovation activities to more interesting outcomes, the innovation most companies could create would be incredible.
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posted by Jeffrey Phillips at 6:41 AM 0 comments

Tuesday, August 15, 2017

Overcoming fixedness before being locked in amber

It seems strange to me, after working for over 12 years in innovation, that so many people can view the same set of circumstances and opportunities in so many different ways.  Our economy is awash in innovation opportunities, and the opportunities are growing and expanding.  There are opportunities to innovate new products and services, of course, but also new channels and new business models.  Customer experience is rapidly becoming an important innovation avenue.  Paul Hobcraft and I have been writing about the opportunities that are available in entire platforms and ecosystems, and these of course create in turn new opportunities.

The basic building blocks of opportunities - customers, unmet needs, emerging trends and technologies - are all growing.  Beyond that most of us have our basic needs fully met - food, clothing, shelter are all reasonably achieved.  That means that new innovations may be more intangible, psychological, emotional, notional - but there are as many opportunities there as there are in tangible innovations, if not more so.

With this opportunity abundance, why is it that so many individuals and companies see restrictions, limits and barriers to innovation, rather than the vast potential that's available if only they'd set aside past conventions and risk tolerances.  After all, this isn't a 'glass half empty, glass half full' conundrum. This is more akin to a 'glass half empty, barrel overflowing' situation.  People simply aren't paying attention, are too distracted or too fearful to really think about all the potential innovation opportunity.  Or, as I'll explore below, we give into a perspective that suggests that many issues, conventions, regulations and cultures are fixed, unable to move.

Like an insect in amber

You may be familiar with amber - the gemstone that originates from ancient tree sap that hardened over time.  The Czar of Russia had an entire room that was covered in amber - supposedly one of the most beautiful rooms in the world.  You'll often find in amber insects from long ago that were captured by the sap as it flowed down pre-historic trees.  I often think of modern business executives and their teams share similarities with those insects.  They are caught up, stuck, and have lost their freedom of movement. But unlike the insects, that loss of freedom isn't because of a tangible, sticky substance, but because of the stickiness of their perspectives, their cultures, their experiences and education and their industry conventions.  They are insects in a virtual amber, doomed to limits that are dictated and prescribed by their own thinking.

Innovation comes from outside

It may not seem evident at first, but virtually all radical and disruptive innovation originates from outside an industry's boundaries, by people who often weren't even in the industry, who were serving other clients or other needs and saw a way to serve a new set of customers or solve a new set of needs.  The reason these outsiders can so easily disrupt an existing industry is because they haven't been paying homage to the conventions and cultures that built the industry or market.  These entrants have little or no stake in how the industry or market is built or its existing business models, and in fact can profit by radically changing the business model.  These individuals, like Richard Branson or increasingly Elon Musk, are radical free agents, who aren't bound by industry conventions or past expectations, who actively look across industries for rigid decision making and adherence to past ways of doing business.

Weak links / Strong links

The other way to think about this stickiness is a "weak link/strong link" framework.  There are two perspectives: first, the linkages within the industry or convention and second the linkages between the participants.  Disruptive innovation is easier in the first example when there are few strong industry conventions or shifting from existing conventions is relatively painless for the consumer, or when everything is shifting, so the customer accepts that shifts are necessary and important.  An example is when digital music appeared via MP3s and Napster made music sharing acceptable.  Apple was able to disrupt music distribution and publishing because the form factors changed, the technology (digital versus physical media) changed and the music players themselves changed.  When multiple factors are changing, disruption is easier to accept.

Conversely we can see why it is difficult to innovate in the airline industry.  There are too many rigid, regulated or business model conditions.  Safety concerns, unions, the transparency of pricing, the reliance on key volatile inputs (oil, labor), the fixed number of gates and so on don't leave a lot of options for innovation. This means that much of the innovation needs to happen outside of the core offering, and explains why the most interesting innovation has come from outsiders (Branson for branding) or new entrants (Emirates/Qatar) for new services.  But even these innovations pale when we compare them to innovations in technology, in software and in other markets or industries where conventions or regulations are absent or easier to ignore.

What's fixed / what mutable?

So the questions a potential innovator must ask themselves in any situation is:  what's fixed, and cannot be changed?  What do competitors assume is fixed but could change?  Where are there strong linkages that would be difficult to change, and where is change already occurring that we can surf to greater success?  And, how "fixed" or transmutable is my company's culture, perspective and thinking?  Can others around me recognize opportunity and move with it?

Innovation is possible in any setting and in any industry.  Even a very heavily regulated industry such as air travel has plenty of potential for innovation if only the participants would think beyond product innovation.  In other industries that are less regulated, innovation opportunities abound.  Innovators must determine the "fixedness" of their perspectives and cultures, and then the fixedness of the industry or market they compete in.  Otherwise, like the insect swallowed by the tree sap, they'll find themselves encased, unable to move and unable to innovate.



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posted by Jeffrey Phillips at 6:19 AM 0 comments