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Issue 33 – May 17, 2013
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Embrace Self-Disruption Using the Business Model Canvas ................... Doug Williams Deloitte Survey: How Millennials See Innovation ……………..………….... Paul Hobcraft Build a High Performance Innovation Team ……..........……………..…… Matthew Griffin The Potential and Peril of Radical Innovation………………….………...…...... Greg Satell Making New Mistakes .…………………………………………………...……… Jeffrey Phillips Monster Loyalty, ala Lady Gaga …………………..………….…………..…. Matthew E May So how will we innovate in the future? ……………………………...……..…. Paul Hobcraft Innovation: a Case for Entitlement (really!) ………………...…….. Deborah Mills-Scofiield The Flux Lines of Innovation …………………….…………………….…...….. Mike Shipulski Taking the Mystery Out of Innovation ……………………………..…..…..…. Holly G Green
Your hosts, Braden Kelley, Julie Anixter and Rowan Gibson, are innovation writers, speakers and strategic advisors to many of the world’s leading companies.
“Our mission is to help you achieve innovation excellence inside your own organization by making innovation resources, answers, and best practices accessible for the greater good.”
Cover Image credit: Eric Peters Autos
Embrace Self-Disruption Using the Business Model Canvas
Posted on May 9, 2013 by Doug Williams
Your business is unsustainable in its present form. It doesn’t matter what you make, or sell, or offer. If you continue to embrace “business as usual,” you are doomed. That was the bottom-line message offered by Alexander Osterwalder, co-author of Business Model Generator, in his Day Two keynote at the Front End of Innovation conference in Boston this week. As I learned in my days at Forrester Research, whether you are writing a research report or giving a speech, there’s nothing like starting off with a little fear, uncertainty and doubt (FUD) to get people’s attention. Osterwalder introduced the crowd to his Business Model Canvas (BMC), which is a tool that allows people to make existing or new business models tangible so they can be discussed. There are 9 components to the BMC: Customer Segments, Customer Relationships, Channels, Value Propositions, Key Activities, Key Resources, Key Partners, Cost Structure, and Revenue Streams.
The Business Model Canvas, developed by Alexander Osterwalder and Yves Pigneur Osterwalder was able to demonstrate its applicability across a variety of businesses. His most interesting example was for the Nestlé Nespresso coffee machine. He demonstrated the power in having developed separate business models for the machines (straight retail, a very broad channel) and the coffee pods (new yet narrow channels like online, telephone, mail order, and a few Nespresso retail stores developed by Nestlé). Nestlé was able to create billions of dollars in profit by disrupting the traditional all-retail business model for coffee makers and coffee. The best part of the story, though, came when Osterwalder told us how Nestlé’s failure to self-disrupt its Nespresso business could cost it those billions in profit. The patent on the Nespresso coffee pods – its primary Key Resource – expired last year, which means Nestlé will no longer be the sole distributor of the pods through its own channels. Osterwalder’s point: business models are like yogurt in the refrigerator: They are expiring, like it or not. By failing to di srupt itself before the expiration of the patent, Nestlé has put those billions in profits at risk. With the crowd now familiar with the approach, we were asked to pair up and, using an interviewer/explainer approach and materials provided to us, fill out a BMC for one person’s actual product – in just 8 minutes. The fact that the capacity audience was able to do this within minutes of being introduced to the BMC is a testament to one of its key advantages: simplicity.
Osterwalder created a tiered system to rank companies based on their level of innovativeness with their business models. A successful business model is defined by analyzing its mechanics; this is accomplished by asking the following seven questions:
1. Are there switching costs built into your product? 2. Do you have recurring revenues? 3. Do you earn money before you spend it? 4. Do you have game-changing cost structure? 5. Are you getting others to do the work? 6. Are you scalable? 7. Are you protected from competition?
The audience was asked to score our own businesses on a scale of 1 to 10 for each of these questions, and it was an eye-opening exercise. It’s unlikely that anyone awarded themselves 10s across the board – or even 5s, for that matter. The truly honest among the participants would likely have had at least a few 1s and 2s. Osterwalder contends that the companies that compete on business models are the true innovative companies in the market. He shared a 4-level ranking system for companies based on their business model mechanics: Level 0 companies (“the Oblivious”) focus only on the product; Level 1 companies (“the Beginners”) use the BMC, but only as a checklist; Level 2 companies (“the Masters”) use the BMC well but haven’t shown themselves capable of self -disruption; and Level 3 companies (“the Invincible”) have a superior model, but use the BMC to constantly think of proactive new model s before they need them. When using the BMC to self-disrupt your own business model, Osterwalder urged the audience to embrace design thinking when developing new business models. Throwing away the first iteration of a new business model is a best practice: it’s part of the creation process, and allows you the freedom to explore alternatives and answer the question: “What could this become?” It forces you and your colleagues to challenge orthodoxies and think of something else that could result in true differentiation and advancement to the next Level. What it means: Many consultants and researchers have tried to devise ways of identifying and even ranking the most innovative companies using various metrics. Osterwalder’s approach is not as direct as compari ng financial results, R&D spend, or patent registrations, but in my view, focusing on the business model and the changes and adaptations a company makes to its business model accurately captures the essence of what makes the most innovative companies that we all know and love (the Apples and Amazons of the world) invincible.
In fact, Osterwalder suggests that companies like 3M and Google, which are widely revered as being innovative, are actually Level 0 or 1 companies when you assess how they compete with business models. That contrarian position might elicit a reflexive response of “No, they aren’t” until you stop and think for just a moment about the staleness of their curr ent business models. That’s not to say product innovation at 3M isn’t incredibly re fined and impressive, nor am I suggesting that 3M won’t continue to be successful. The point is that there will be limits to the success of those Level 0 or 1 companies unless they explore the possibilities and long-term benefits of self-disrupting their own tired business models – before someone else does. So what level are you?
Doug Williams, Chief Research Officer and Principal Analyst, leads the development of IX Research. Doug is the primary author of IX Research‘s syndicated research reports, and is responsible for the development of the IX Research Panel and IX Custom Research lines of business. A former analyst at both Forrester Research and JupiterResearch, he launched and led Forrester’s innovation and co-creation practice for product strategy professionals. He authored 36 highly rated Forrester Research reports on innovation, open innovation, and co-creation, and was the primary author and developer of Forrester’s Open Innovation playbook. Doug tweets from @DougWilliamsMHD.
Deloitte Survey: How Millennials See Innovation
Posted on May 10, 2013 by Paul Hobcraft
Deloitte Touche Tohmatsu Limited (DTTL) have provided a set of interesting results from a survey of the world’s future leaders and what they think about innovation, which was released for the World Economic Forum, held in January 2013. Millennials see innovation differently The top line was only 26% of those surveyed believed their current organizations leaders encourage the practices that foster innovation. This indicates a major shift really is needed in the organizational mindset to give innovation the chance to thrive. The implications are nicely summarized by this statement from Deliotte’s Global CEO. “Innovation at the institutional level is needed to sufficiently shift an organization’s mindset to allow new ideas to truly emerge and thrive,” said Deloitte Global CEO Barry Salzberg. “While our current business leaders can debate how and where to innovate, it’s clear how much importance our future leaders place on innovation—not just as a driver of business growth but also as a catalyst for solving society’s most pressing problems.” DTTL surveyed close to 5,000 Millennials from 18 countries. When gauging the perception among future leaders about innovation and its impact on society, 84 percent say business innovations have a positive impact on society, and 65 percent feel their own company’s activities benefit society in some way. For more information and to view the survey results, visit: www.deloitte.com/millennialsurvey The critical message – can we wait or shift leaders aside who don’t get it? “A generational shift is taking place in business as baby boomers, many of whom may have been wedded to the ‘old way’ of doing business, begin to step down from their leadership roles to retire,” said Salzberg. “Real opportunity exists for organizations to step up and create the conditions and commitment needed to encourage and foster innovation in their work environments. And there’s a tremendous upside if we get this right: we can better retain talent, remain more competitive into the future, and more positively impact society.” The report provides a nice infographic here: http://tinyurl.com/autexyn So what really catches my eye?
The one chart that stands out for me is the one that outlines the required provisions of innovation conditions and the present delivery “gap” in creating these to foster innovation. Taking this as the make-up of many of the essential conditions it is worth listing them here
1. Encourage & reward idea generation and creativity 2. Provide employees with “free” time that can be dedicated to learning 3. That leadership encourages idea sharing regardless of seniority 4. To promote openness and the freedom to challenge 5. Provide a commitment to successfully advance innovation ideas 6. Provide strong and inspirational (innovation) leadership 7. Have a clear vision of the future 8. Have a (better) understanding of the Millennial generation 9. Improve or expand use of internal social and informal learning (methods) 10. Encourage both formal and informal learning 11. Have a (real) commitment to a sustainable business 12. Provide (the conditions) and commitment to continued development 13. Provide (consistent) improvement to internal processes 14. Commitment to (consistent) and continual product and service improvements 15. The (vexing issue) of a lack of hierarchy
The ones highlighted in bold gained the highest responding as needed but this is a fairly valuable list to work from in fostering the ‘right’ innovation conditions. The Millennials felt the purpose of business was to improve society, generate profit and to drive innovation. They overwhelmingly believe innovation is essential for business growth. They feel it is acceptable for business to profit from social innovation and those organisations that are (clearly) seen to be innovative will attract the talent According to DTTL the findings endorse the importance of leadership and innovation and the impact business can have on society. This creates opportunities for business leaders – both individually and collectively – and for the long-term success of their businesses. My initial thoughts triggered from this survey Today’s leaders need to think very differently about their role and the expectations of business, if we are to capitalize on the opportunities that innovation can provide, simply by allowing these opportunities to be shaped more by the Millennial generation, sitting inside or collaborating outside their organizations.
For me, this survey simply strengthens my view that today’s leaders just don’t get innovation in the multiple ways they should: to enhance their business and to regain growth. The generations coming up into leadership positions are not just aware of innovation’s importance but are being exposed and trained in all the different facets but are often seemingly frustrated that those above “simply don’t get it and the bigger picture”. The issue is “can we really wait?” I don’t believe so. Some might need to step aside or be pushed aside - do you know any one?
image credit: facebook.com/DeloitteSAgroup
Paul Hobcraft runs Agility Innovation, an advisory business that stimulates sound innovation practice, researches topics that relate to innovation for the future, as well as aligning innovation to organizations core capabilities.
Don’t Kill your Organisation! Build a High Performance Innovation Team
Posted on May 10, 2013 by Matthew Griffin
How to Build a Lean High Performance Innovation Team
The world we live in is changing at a dizzying rate and sectors including the energy, technology, education, entertainment, communications, finance, sports, manufacturing and engineering sectors are all experiencing change on a seismic scale. Many of the innovative advances of the past ten years, from smart phones to digital cameras have become commoditised and creativity has become the currency of success. In a study in 2012 over 1,500 CEOs ranked creativity as the number one leadership attribute needed to drive prosperity. Creativity is the lifeblood of sustainable competitive advantage but unfortunately most companies, particularly smaller ones fail to leverage the human capital in their organisations to their advantage. In this article I show you how large and small organisations alike can build lean, agile, high performance innovations teams.
Build the Right Team
Throughout the innovation process people are your biggest asset, closely followed by insight and data. Innovation is as much about learning as it is creating and there are few other business initiatives that rely as heavily on recruiting the right people. As a senior stakeholder you want to create a new innovation team because you want to make a commanding difference to your organisations future prosperity and earnings so you must recruit the best people, anything less and you could end up disappointed. When I talk to my customers and ask how they put their innovation teams together I often find that many of the people were appointed. Typically a senior stakeholder will have dictated that each line of business has to be represented and
managers then scramble to find people who are available and the least likely to embarrass them. Commonly the best employees are almost always busy working on different projects so inevitably you find innovation teams that are made up of mediocre performers and unwilling participants. If this is your starting point then you’re already crippling yourself. Innovation teams must be made up of insanely curious, empathetic, committed, passionate people who lead by example. Overall you need three types of people and should be made up of a cross section of stakeholder communities that can, and should include a cross section of your own employees as well as customers, partners, academics, analysts and industry experts to name but a few.
Have a vision
If you command your team to ‘Innovate’ you’ll invariably see them scatter in a variety of different directions. As with all teams you need to provide them with a clear vision that is tied to your own business objectives. While you don’t want to be too prescriptive you similarly don’t want to leave it so broad that your team tries to take on too much and end up diluting the final innovations. For example, a vision statement can be as simple as “Design a solution that helps our customers automate their operations”. A vision along these lines gives your team a clear mandate which they can then use to uncover genuine customer needs and begin gaining insight.
Build a culture of Innovation
Your people are your greatest assets and they are the interface with your second greatest assets – your customers and partners and because they’re already on your payroll if you use them effectively then you can find new inspirations, design new solutions, increase your returns and make your employees feel empowered all without increasing your expenditure. Building a culture is simpler than many people think. All it requires is one person to change and the effects ripple out from there like a stone being thrown into the water. However – we all live in the real world and while this one by one approach has its merits it can also be tediously slow. The fastest way to enable organisational change is by Executive order but the CEO sending out a blanket communication will do little. The new changes have to be programmatic, championed and acted upon at all levels of the organisation. Businesses will always have discussions about whether it’s better to create a dedicated innovation team or whether it’s better to make innovation part of everyone’s job and while there are pros and cons if managed correctly your employ ees can help dig up ideas and then funnel them through, typically via an open innovation portal, to the innovation team whose job it is then then start filtering and developing them into marketable solutions. For example, three years ago I was head hunted for roles within IBM (whose strap line is “Think”) and HP (whose strap line is “Invent”) so you could argue that either way I was going to be faced with a tough choice of which one to pick. Over the course of twelve interviews, six with each, with a veritable mix of senior European VP’s and Directors I was able to gauge the difference in Executive culture between the two organisations. Three years on I believe I can say that the cultural chasm between the two organisations is ultimately one of the cornersto nes responsible for HP’s collapse in share value – and I’m not alone. When I first interviewed HP shares were trading at $46.30, today they have collapsed by 64% to $17.01. IBM’s shares on the other hand were $172.98 and have now increased by 19% to $204.4 2. So what was the cultural difference? IBM is renowned as being one of the world’s most innovative companies and throughout the interview process Executives were very specific that they wanted me to help them change the game and be disruptive. Meanwhile across at HP the tone was very different. They were very clear that you come in, do your job and then leave at the end of the day. One of the senior European Sales Directors even went as far to tell me that he’d entered the company nine months previously and he hadn’t been able to enact any changes. If the senior executives don’t feel empowered then it’s fair to say that their teams will feel similarly disillusioned.
Role centred behaviour will kill your organisation
The greater majority of today’s businesses operate traditional role centred management hierarchies that leave very little room to foster the creativity or collaboration needed to inspire organisational innovation. Employees are slotted neatly into the organisations structure and ascribed a specific job functions and specific targets both of which are typically at odds with the innovation process where people need to be free to employ creative lateral thinking and be given the freedom to go beyond their job roles. For example, it’s not by chance that Steve Jobs penned his now infamous quote: “Here’s to the crazy ones, the misfits, the rebels, the troublemakers, the round pegs in the square holes… the ones who see things differently – they’re not fond of rules… You can quote them, disagree with them, glorify or vilify them, but the only thing you can’t do is ignore them because they change things… they push the human race forward, and while some may see them as the crazy ones, we see genius, because the ones who are crazy enough to think that they can change the world, are the ones who do.”
Trust me – you need Trust
Trust. Unfortunately most organisations would find it easier to visualise what life would be like without it rather than with it so consider where you and your organisation would be if there was no trust.
Without it your customers would desert you and your sales would erode, analysts and shareholders wouldn’t believe your statements and your staff would feel trapped by their own toxic opinions. Psychologists liken the absence of trust to cancer because it eats organisations from within so it’s not by chance that all of the hyper growth organisations have trust deeply embedded into their cultural psyche. If your organisation doesn’t have a culture of trust then you’ve already eroded your growth potential and given your competition the upper hand. Trust is the freedom to communicate opinions and observations in a civil manner without the fear of persecution and it’s the cornerstone of every successful innovation strategy. It enables and encourages partners and colleagues alike to collaborate more intimately, share richer feedback and insights and pose new radical ideas in a safe environment and without these you’re designing in the dark. Feedback is the life blood of innovation and trust gives you a lens that you can use to uncover issues, find common themes and identify future trends. Just as important though is the fact that some of the feedback and insights you will receive may be unnerving but it’s important that people can air them and it’s equally important that you listen carefully – you can filter it, prioritise it and respond to it all later.
Find the Need
Once you have created your teams vision you have to find and address a genuine, qualified Need that people care about and will pay money to
solve. There are millions of needs so finding one isn’t as hard as you think and your vision will define your areas of interest. Once you have found one your passionate, empathetic team need to spend time digging into and clearly understanding the 360 degree needs of all of the stakeholders who are ultimately going to use and pay for the new solution as well as those people who are directly, or indirectly going to be affected by it. While this can sometimes feel like trying to mix oil and water together if done successfully then your new innovation will be able to meet ev eryone’s requirements without distilling its original essence. Sometimes I find that the teams I work with, particularly those in larger organisations live in an Ivory Tower – they only consider the needs of the Executive stakeholders or Board members. If this is where you start and finish then it’s highly likely that you will rush out a low quality, overpriced, mass market solution that is cheap to develop but fails to meet any real consumer needs. These types of solutions are unlikely to set the world or your revenues alight and over the long term their lack of success will do more damage than good and undermine the organisations willingness to invest in R&D.
For example, I recently worked with one of the world’s leading sporting authorities and their CEO simply told me to “Innovate” their sport. When considering just what to innovate I could have just played to the Chairman’s needs which was to increase the governing bodies earnings, improve the sports appeal to boost recruitment and improve grass roots performance. Simple enough. However not satisfied with that and knowing that I could deliver more I took a 360 degree view and worked to understand how I could innovate something that mattered to everyone –the Executives, the Coaches, the players, the sponsors, the public and the press. Once I understood all of the needs I was able to spot common themes and ended up designing a mobile application and a white labelled Cloud hosted analytics solution that the governing body could resell for a low monthly subscription which improved every player’s performance, consistency and welfare. Why? The Executives wanted to promote the sports profile while increasing earnings so they could invest more in improving the sport but wanted to minimise the upfront capital investment. The Coaches wanted to be able to identify up and coming new talent, monitor the wellbeing of their players when they were at home, keep their A players fit and on the pitch for longer and improve their game strategy so they could win more matches and become the club of choice for top flight talent. The players wanted to improve their on the field performance and welfare. The sponsors wanted to support ethical, high performance, winning teams which reflected positively on their brand image and helped them increase sales. The public wanted their grass roots squads and National team to win everything all the time which in turn would boost the sports uptake and the press wanted good news stories and in depth game analysis.
Many organisations believe that the cost of creating and resourcing an innovation team is going to be one of their biggest barriers to entry but while this might be true for startups in highly regulated and technologically advanced industries like aerospace it’s not a universal rule. Today the world is littered with innovations that were developed without the need for any capital investment where plucky entrepreneurs scrounged parts and called in favours from friends and while their first prototypes, whose costs you can reduce even further by using sketches and storyboards, might not have been elegant they showed the art of the possible and proved the concept. For example, at one end of the scale the sports industry is packed with low or zero cost innovations such as the skateboard which was first developed in the 1950’s and is now a $2.5 Billion a year industry while at the other end of the scale the Federal Government, long renowned for seeking cutting edge capabilities and spending tens of billions of dollars to acquire them, now demands that every new capability, from Defense to Social Security, is constructed by integrating low cost, commodity off the shelf products which not only reduce the cost of assembly but also the acquisition and running costs.
Innovate at Speed
Many people think that creating a new innovation and taking it to market takes time but it doesn’t have to. How does 12 weeks sound? Having access to the right ecosystem of resources will always help you innovate faster but wrapping the innovation process into a rapid programmatic initiative will dramatically accelerate it. For example, Extreme Blue. Extreme Blue is an IBM innovation initiative that condenses the innovation process, from conception to market, into 12 weeks and what’s more there’s a twist in the tail because the people who lead the process aren’t hardened IBMers. They’re University students. So how do we do it and does it work? Twice a year we offer a select number of gifted students the opportunity to work for IBM for a period of four months. We then break them into teams and assign each team three mentors – a business mentor, a technical mentor and an IBM R&D mentor who acts as their interface into the regional IBM R&D center. We then encourage a mix of IBM customers with real world business problems to issue a challenge. The teams then have 12 weeks to create a ready to go to market solution. In a recent example CapitalOne challenged us to help them increase their two way trust with customers using their mobile channel. After a week of brain storming and research we concluded that eliminating passwords from their mobile apps would not only help increase trust but would also increase customer satisfaction so that’s what the students did. Eliminating passwords from a mobile banking app would normally have regulators and CISO’s climbing the walls but we worked with a mix of cross line of business customer stakeholders that included the business, IT, security, risk and regulators and created a fully compliant mobile app that didn’t rely on passwords t o authenticate the user. So how did we do it? If you’re a CapitalOne customer you’re already using it but for those of you who aren’t we used a mix of geolocation tagging, environmental monitoring and tactile cue’s that when combined give us varying degree s of confidence that the person using the app is who they say they are. As a result of the initiative not only did we eliminate passwords and create a seamless ‘frictionless’ customer experience but customers now log into the CapitalOne banking portal ten times more often which, for a brand that doesn’t have a retail presence means that they have ten times more opportunity to ‘talk’ to their customers. Win, win and as they say – win!
Make something bad exceptional
Many organisations that I speak to initially feel that their ability to innovate is beyond them. I’ve heard all the reasons – they don’t have the time,
the money, the resources, the wisdom, the insights, the infrastructure and so the list goes on.
There are two distinct types of innovation – Primary, where an organisation creates something new from scratch and Secondary, where they take an existing solution and simply fine tune it to increase its efficiency and effectiveness. When it comes to the latter you don’t have to be a highly resourced, creative genius to find ways to improve many of today’s solutions and while it is often difficult for people to visualise what ‘Good’ looks like most of us knows what ‘Bad’ looks li ke so if you have a relatively inexperienced innovation team select a so lution and get them to pull it apart. Once they’ve drawn out the solutions failings and weaknesses they can then work out ways to turn it into something truly exceptional. For example, NEST is a US based company that has recently been hitting the headlines because they have redesigned the common a garden household thermostat. Originally designed in 1883 the thermostat has become a ubiquitous, dull grey box that makes your wall look ugly but late in 2010 it caught the attention of Tony Fadell, father of the iPod, and two years NESTs sleek new intelligent thermostat is pushing past $20 million in annual sales.
Create a War Room
Organisations can control the end to end innovation process but there is one thing that they can’t control – Competition. Many organisations make the mistake in believing that competition is only external. Competition is pervasive and it attacks
you from many angles – including internally. Once the market needs have been clearly identified your next step should be to create a War Room which runs parallel with the innovation process. The War Rooms objective is to provide the Innovation teams and senior stakeholders with unbiased real world competitive views, opinions and insights which will help the Innovation team create more rounded and robust solutions and Go to Market strategies that have proven communicable value and are flexible enough to adapt to a continually evolving, competitive environment. The competition will come at you from every angle so you need to gather as much insight as you can. Get inside their heads, understand their access to resources and see the world from their perspective. Asking the right questions and analysing your insights after you’ve finished designing your solution is too late. At best your company will end up having to invest extra resources and money reworking it and at worst by the time it’s finished, for the second time, y ou may have also lost your first mover advantage. War Rooms are made up of four teams of experienced volunteers taken from the audiences they represent. Temporally these teams should provide insights that span the whole marketing life of the solution so, for example, if your solution has a marketing life of three years your teams should take a three year view of the market. Team One should be comprised of handpicked individuals from your target customers. Team Two represents your rivals and can be divided into sub teams which represent a mixture of competitors – while you will never get your rivals working with you there are still ways you can get wide range of insights into their world so this team can be made up from a mix of industry analysts, bloggers, new employees who recently worked for your competition, freelance consultants, industry partners and trusted channel partners. Team Three represents your organisations own business and should have both senior and junior participants from each of the lines of business who will be responsible for warehousing, shipping, marketing, supporting, financing and selling the solution. Organisations that are vertically integrated are particularly prone to internal conflict so understanding the agendas and dynamics of your own organisation cannot be over stated enough. Finally Team Four is your Innovation and R&D team and they need to listen and interpret the opinions of the other three teams and integrate the findings in to the final solution. One additional consideration you must account for, particularly if you are developing a solution for a global market is cultural bias and again this can be incorporated into your War Room.
Of all the ideas submitted at the beginning of the innovation process it’s a w ell known fact that only a handful will ever make their way through to the end to become marketable products and services. While many ideas never get past the starting blocks there are still myriads of stronger ideas that fall out in the latter stages beca use they don’t fit or align with
the objectives of the core business. Larger organisations typically try to spin these ideas off as separate divisions or businesses, with varying levels of success, or, as is more often the case shelve and abandon them. Being able to validate which innovations to take to market is as equally important as being able to validate which ones to fail and the faster you can fail them the more time and resources you have to invest in the stronger ones.
Love your Cannibal
One of the common mistakes that organisations make is developing a new product or service only to shelve it part way through the innovation process because they fear it will cannibalise the sales of an existing top selling line. Time has shown us over and over that companies who have quashed such cannibalistic innovations have themselves eventually been disrupted by the very competitors that their new innovation sought to dislodge but by the time they’ve realised their mistake and started the process of bringing i t to market they’ve already lost first mover advantage. Organisations who embrace disruptive innovations enter and dominate new markets faster so while fear of the unknown is a powerful detractor the right leadership team will know how to dovetail the new monster into a fit for purpose go to market strategy. Stopping the development of a new product is always going to be simpler than trying to create a new cohesive sales and marketing strategy that allows it to coexist in harmony with its kinfolk but if your new innovation is that good an improvement on the old one then you owe it to your customers and your shareholders to find a way to take it to market in manner that let’s you grow organisation revenues and profits at an accelerated rate. For example, history has shown time and time again that organisations that stay still fail faster as new entrants take market share. Where would Kodak be now if they had embraced digital technology rather than trying to defend their camera film empire? What’s more ironic is that by the time the company entered into Chapter 11 they had one of the most comprehensive digital patent portfolios in the industry which was eventually bought by Apple and Google for $532 million. Innovation is no good if it is left on the shelf…
image credit: themojocompany.com
Matthew Griffiths specialises in creating new medium and long term revenue streams for both private and public sector enterprises. Recently, he has helped McLaren Formula 1 and the FIA, Toyota, Barclays, Lloyds, GE, DHL and ADP create new differentiated revenue streams.
The Potential and Peril of Radical Innovation
Posted on May 10, 2013 by Greg Satell
Nobody likes the status quo. It’s boring. The companies that we admire are radical. They have the courage, smarts and verve to do something truly different. The problem is that radical innovation is rarely a prudent course. It not only disrupts competitors, but also your value network: customers, suppliers, partners and even employees. It’s one thing to lead the charge, quite another to get anyone to follow. So what to do? If you stand still you’ll get run over, but if you go chasing every half baked idea that makes its way onto TechCrunch, you’ll lose focus on your core business and decrease competitiveness. Some firms, however, have learned how to harness disruptive technologies not by being first movers, but by learning how to follow intelligently.
The Business of Running a Business
Most managers aren’t focused on innovation. They are, perhaps unsurprisingly, mainly concerned with running their business. They have suppliers to keep in line, demanding customers who always want more, employees who need to be trained and motivated and competitors who want to eat their lunch. At any given time there is an active crises going on. An unhappy customer is about to bolt; a competitor comes out with a hot new product; a facilities problem or any one of a million things going on threatens to spiral into a company-threatening morass. A good manager is a good problem solver and that’s where the bulk of time and effort are spent. That’s why business schools teach good management principles. Effective strategic analysis tracks competitors, evaluates consumer needs and preferences and formulates a plan of action. Organizational theory helps organize the company in an effective way. Sound finance ensures that you have enough money to invest in the future and so on. If you follow solid principles, chances are that you’ll do pretty well. Unless, of course, you get disrupted.
Why Good Companies Fail
Even companies who do the right things sometimes falter. Clayton Christensen, a professor at Harvard Business School set out to understand why. He looked at strong companies, whose management graced the covers of prominent business magazines, invested heavily in R&D, listened to their customers and delivered on promises.
What he found was that adhering to these time honored practices not only didn’t help them, they accelerated their demise. The problem wasn’t that their competitors outperformed them or that customers abandoned them, but that th ey got blindsided by a completely new market. Christensen called this phenomenon disruptive innovation. As incumbents continued to make their products better and better, they overshot what consumers really needed and the basis of competition changed. That opened the door for new companies to offer a product that was worse from a traditional standpoint, but performed better in areas such as price or convenience and a new market would develop. Incumbents would usually ignore these new markets because they still needed to keep their existing customers happy. The new upstarts served a different kind of customer that seemed tangential, niche and less profitable. Unfortunately, as we have seen in categories ranging from digital music and photography to video rental and discount brokerage, is that disruptive technologies have the unruly habit of eventually invading the mainstream.
The Difference between Radical Innovation and Revolutionary Breakthrough
The fact that so many industries have been disrupted has led some to conclude that big, established companies don’t innovate well. They are fat, lazy and unwilling to break new ground or the story goes. In fact, nothing could be further from the truth. If there is a breakthrough, it is most likely to come from someone already working in the field. The microchip, for example, was not a disruptive innovation , but a breakthrough on a well known and clearly defined problem. In much the same way, Steve Jobs was not, for the most part, a disruptive innovator, but used Apple’s vast resources to come up with novel solutions that revolutionized existing products. As I explained in an earlier post, disruptive innovation thrives because it creates solutions to undefined problems . Nobody ever demanded a digital camera or a discount broker, people were generally happy with the cameras and brokers
that they had. Moreover, when disruptive innovations first come to market, they tend to be crappy and are therefore ignored. It is only when a disruptive innovation goes beyond early adopters that it becomes a threat to established companies. By that time though, the incumbents have usually missed out. Or have they?
How Disruptors Get Disrupted
Contrary to popular belief, first movers do not usually dominate the markets they pioneer. Amazon was not the first online bookseller, nor was Google the first search engine or Southwest the first discount airline. Somebody else was there first, defined the category and then fell behind. This is puzzling, especially since we hear so much about first mover advantages. Early entrants have a head start on technology, can snap up choice assets and build loyalty with consumers. Why is it that they so rarely succeed? Geoffrey Moore gives a very convincing explanation in his book Crossing the Chasm , which is summarized in the chart below:
Early adopters are excited about new capabilities. They are usually technology enthusiasts who will put up with a few glitches in order to be on the cutting edge. As performance gets better, their appetite grows and helps create a viable market. However, as the base widens, it attracts a different type of consumer who wants convenience and usability. Early MP3 players were popular with the tech crowd, but once the technology improved, Apple was able to provide a greatly enhanced experience and blew everybody else out of the water. When digital cameras became good enough, Canon was able to capitalize on their expertise in lenses and become a market leader. The list goes on.
Taming the Beast
Radical innovation is not nearly as sexy as some would have us believe. As mythical beasts go, it’s less like an elegant Pegasus on which we can ride into the sunset than a many-headed Hydra that can bite us from just about any angle. However, as we have seen, rushing to be first is rarely the best policy. Early stage technologies have limited viability, a small customer base and low profitability. However, it is possible to have the best of both worlds: timely adoption of emerging technologies while maintaining focus on the core business. Here’s how to do it:
Identify: A growing number of companies are establishing dedicated innovation units which are responsible for keeping
up with emerging trends. For reasons I explained in an earlier post, these units should be primarily made up of junior employees who aren’t directly involved with strategy formation.
Evaluate: While identifying hundreds of potential technologies is a low level exercise, putting them into strategic context
requires more senior involvement. Executives need to be trained to spot salient aspects of disruptive innovations and how to evaluate the potential for these to “cross the chasm.” One of the most curious things about famously disruptive companies like Netflix and Google is that they approached the market leaders early on and were rebuffed. If Blockbuster and Yahoo had an ongoing evaluation program running, they might have been able to make better decisions.
Test and Learn: In rare cases, like IBM’s PC development, the opportunity is clear enough that immediate resource
deployment makes sense. However, usually the picture is hazy and muddled. There are a number of technologies that look promising, but no way of knowing which ones will pan out. That’s why it’s essential to have an active “test and learn” program where a number of pilot projects are c ontinually running. The aim here is not so much to produce successful ROI, but to be able to fail cheaply. As Thomas Edison said of his long road to inventing the lightbulb, “I didn’t fail 1000 times, I found 1000 ways it didn’t work.” In the final analysis, radical innovation is no longer an option, but a necessity. As I’ve pointed out before, technological cycles are becoming shorter than corporate decision cycles. By the time something has been shown to be strategically significant, it is often to late to capitalize on it.
image credit: americaslibrary.gov
Greg Satell is an internationally recognized authority on Digital Strategy and Innovation. He consults and speaks in the areas of digital innovation, innovation management, digital marketing and publishing, as well as offshore web and app development. His blog is Digital Tonto and you can follow him on Twitter.
Making New Mistakes
Posted on May 11, 2013 by Jeffrey Phillips
Nothing is quite so frustrating as working with a client who claims to want and need innovation, but is paralyzed by indecision or doubt. Unless, of course, it is a client who has decided that regardless of the new ideas they generate, they will all fail, because of the mistakes they made in the past. I’ve worked with a number of clients where teams can generate interesting, relevant, valuable ideas for needs that exist in their customer base. Rather than proceed to develop these ideas, the team then huddles up to discuss all the reasons the ideas won’t work. And often, the reasons the ideas won’t work are nothing more than a litany of mistakes the organization made ‘the last time’ they tried to innovate. Those who ignore the past It’s one thing to be paralyzed by indecision, or to question innovation due to the costs or risks involved. It’s quite another to reject innovation because of failures or mistakes made in a previous attempt, but you’d be amazed and saddened by the amount of discussion that goes on about the previous mistakes. Many companies and teams are haunted by the fact that previous teams made mistakes that slowed or killed innovative ideas. What the past has to tell us about the future is completely another matter. Santayana is credited with saying that those who ignore history are doomed to repeat it. What did he say about those who are fixated with history and believe we cannot learn and change? Whatever happened to all the lip service about becoming a “learning organization“. Can we simply acknowledge the past and then move on? What does this learning organization learn? How to avoid failure? Let’s make new mistakes Perhaps one of the rallying cries for innovation teams should be “let’s make new mistakes”. At a minimum, innovators should look to history for cues as to decisions or actions to avoid, in order not to make the same mistakes again. But they should not become fixated on the past. Instead, innovators should decide to avoid the mistakes of the past, and realize that they will make a host of new mistakes moving forward. They’ll make mistakes because many firms have never attempted a consistent, sustained innovation program. Any new activity where the history has been less than successful
and the teams are working in unfamiliar territory will lead to mistakes. That should be OK – we are a learning organization after all, and new mistakes should equate to new learning, new insights and ever better processes and outcomes. Error-free innovation Like perpetual motion, life on the Moon, and the calorie free chocolate bar, error-free innovation is a myth. You will make mistakes when you innovate. As they say in skiing, if you aren’t falling occasionally, you aren’t challenging yourself. The same is true with innovation. But rather than avoid mistakes, your first goal is to change the attitudes and mindsets about making mistakes, as long as those mistakes lead to ever better outcomes. Of course we should be able to avoid the mistakes of the past, and should not become morose in our beliefs that we’ll simply repeat those mistakes. If you are living in a Groundhog Day of repeating past mistakes, innovation isn’t your key need as a business. The problem with Six Sigma, Lean, efficiency and so many management philosophies is that they’ve eliminated experimenting, trying new things, making mistakes in order to learn and grow. Corporate cultures recoil at even the hint of a less than perfect outcome, and innovation by its very nature is messy and uncertain. It’s simply not possible to innovate in an error free manner, so you can’t eliminate mistakes. What you can do is e liminate the attitudes and perspectives about mistakes, which are ultimately the factor that is holding your team back. The Innovator’s Creed Perhaps a line in the Innovator’s Creed should be: We promise to understand and attempt to avoid past mistakes, and not be bound by them, and we promise to risk enough to create new mistakes and learn from them, in order to grow and change in ways that improve our company, and deliver products and services that matter to our customers.
image credit: better mistakes image from bigstock
Jeffrey Phillips is a senior leader at OVO Innovation. OVO works with large distributed organizations to build innovation teams, processes and capabilities. Jeffrey is the author of Relentless Innovation and the blog Innovate on Purpose.
Monster Loyalty, ala Lady Gaga
Posted on May 9, 2013 by Matthew E May
Lady Gaga is one of the most well-known pop artists in the world, which is no surprise given her vocal talents and often bizarre wardrobe. She’s sold 23 million albums, won five Grammy awards, and been named by Forbes as one of the world’s most powerful celebrities. But behind the public persona lies a shrewd and calculating business professional, a marketing machine which has turned music lovers into a worldwide legion of diehard fans eager to buy her music, her concert tickets, and any and all products related to her. Is this simply a classic case of loyalty marketing and customer cultivation? Perhaps. Apple aside, few businesses can claim a base of zealots anywhere near the same scope and scale. In Monster Loyalty: How Lady Gaga Turns Followers into Fanatics, author Jackie Huba argues that Lady Gaga has not only created a brand, but is cultivating a fanatical group of consumers that will follow her for the next two decades of her career and beyond. In four short years, Lady Gaga has built an army of passionate fans that numbers in the tens of millions around the globe. According to Huba, Lady Gaga didn’t become the success she is today based solely on her talent. She did so through the message she inspires and the community she has built around that message.
The Loyalty Playbook
Huba distills seven key strategies from the Gaga approach, which, while individually effective, become a solid business blueprint when taken together: 1. Focus on Your “One Percenters”: Gaga spends most of her effort on just one percent of her audience, the highly engaged super-fans who drive word of mouth. 2. Lead with Values: Create an emotional connection with customers by showcasing what you believe in. 3. Build Community: Connect your most loyal customers with each other to strengthen their bond with you.
4. Give Fans a Name: Gaga calls her fans her “Little Monsters.” A name gives customers a way to self -identify as part of the group. In fact, Gaga now has her own social network, little monsters.com. 5. Embrace Shared Symbols: Shared symbols help customers bond by creating a collective experience. 6. Make Them Feel Like Rock Stars: Become a fan of your fans and find ways to make them feel special. 7. Generate Something to Talk About: Make your business “word-of-mouth-worthy” by continually giving your fans reasons to talk about you.
5 Insights to Gaga
While these seven lessons seem sensible enough for a pop star, they beg a bit of insight and explanation in order for businesses to learn from them. Here, Huba answers a few questions: Lady Gaga has such a specific brand and audience. What can the average businessperson really learn from her? Gaga’s business of show business may be very different from the “average” business, but her focus on growing through devoted customer loyalty is a universal business objective. Most business people know that it’s far cheaper to keep a customer than to get new one. Gaga gets the math. It’s her overarching philosophy to focus on her core advocates, the super-fans, the “Little Monsters.” These advocates will ultimately be e vangelists who bring in new customers on their own. This customer philosophy is one that businesses would do well to learn from Gaga. How do more practical companies partake in her business philosophies without going over the top? The best ideas sometimes come from the unlikeliest sources, and whether you love her or hate her, you can’t ignore what she has accomplished. I think it’s important to study what she does, how she does it and why, because there are ways to
replicate her success in more traditional business settings. In every lesson from Gaga in the book, I highlight how traditional companies—from Whole Foods to MINI—are applying her methods to their customer bases, without having to wear any dresses made from meat. You call her Little Monsters “One Percenters.” Can you explain this concept a bit more? The idea of the One Percenters comes from our research during the early days of online community and social media. I looked at online communities and tracked what percentage of members in those communities created content —in other words, who was most engaged. I found it amounted to just 1 percent of the total community members. This was surprising. The amount of super-engaged community members did not follow the usual 80/20 rule. We discovered that the volume of content creators was much smaller, at just 1 percent. That’s a very small part of the community, and yet it was creating most of the value for the entire community. Our thesis is that these One Percenters are a business’s most diehard customers—the ones who really love the company, buy new products as soon as they are released, give them as gifts and evangelize the company to everyone they know.
“Little Monsters” is a great fit for Lady Gaga, but can you give an example of how a business might “give fans a name”? One of the best examples of a brand naming its fans is Maker’s Mark, the premium bourbon company out of Loretto, Kentucky. Bill Samuels, Jr., son of the founder, was looking for a way to better connect with the brand’s fanatical customers and created the Maker’s Mark Ambassador program.
Ambassadors are brand evangelists who volunteer to tell others about the product, and encourage bars that didn’t carry the brand at the time to do so. Today, there are hundreds of thousands of Makers Mark Ambassadors who receive custom business cards and fun holiday gifts from the brand, and gather for events at the distillery in Loretto each year. What’s the most surprising thing you learned while studying Lady Gaga? Lady Gaga’s business sense impresses me, but her passion for changing the world for the better through any means possible is what truly inspired me to study her. She is influencing an entire generation of young people to stand up for each other, to be more tolerant of differences and to be brave in the face of difficulty. I have spent hours and hours reading fan comments about how she has changed lives for the better. I have cried watching YouTube videos of kids saying they thought about hurting themselves or ending their lives, but that her belief in them, a woman they don’t even know, kept them from doing it. They listen to her music, especially “Born This Way,” and they feel better about themselves. I believe that if there was ever a candidate to continue Oprah Winf rey’s legacy of inspiring people to live their best lives, it’s this five-foot-one, 26-year-old in a studded bikini. Give Monster Loyalty a read, because there’s a lot to learn from Lady Gaga. It is trust that engenders loyalty, and there isn’t a business or individual on the planet that couldn’t improve their trust quotient .
Matthew E. May is the author of “IN PURSUIT OF ELEGANCE: Why the Best Ideas Have Something Missing.” He is constantly searching for creative ideas and innovative solutions that are ‘elegant’ – a unique and elusive combination of unusual simplicity and surprising power.
So how will we Innovate in the Future?
Posted on May 13, 2013 by Paul Hobcraft
In two short posts I have extracted a couple of strands of thought that might provide us some pauses in our thinking of where innovation might be heading for its consequences and implications and what this might mean for each of us. This is the first. Evidence is all around us, that there are changing innovation patterns, more evolutionary than radical, taking place. There are new forms of innovation that are offering novel emerging concepts, ideas and strategies of how innovation is becoming organized or possibly will be. Due to the enormous acceleration of innovation, companies have focused far more on the trend to “over -engineer” their products in order to stay that little bit more competitive. They have often tended to lock into incremental improvements and thereby have been losing track of their main objectives: to be able to reap the benefits of their innovativeness and to meet their customers’ real needs. We are falling short of transforming through innovation. A Foresight Project on Innovation A report, undertaken between 2009 and 2112 and covering 144 pages, has been coordinating views on innovation and its possible future direction. This was funded by the EU FP7 on a foresight project on the future of innovation (INFU). It can be explored under the web page www.innovation-futures.org Our first ‘pause’ is the seven dimensions of change for us to manage: There will be new forms of coordination and mediation – existing models will be challenged by growing coordination mechanisms, such as self-organizing communities or web-based co-design platforms. These today are seen to be on the rise. The emerging ones will present challenges on who is in control of these. The present reality is that our business organizations are not well set up in the emerging competences required, suffer considerable inertia and in-grained difficulties and barriers to change their cultures, to learn and adapt. There will be a wider participation with the increasing trend of citizens and customers gaining increasing relevance to influence innovation, both in deciding the priorities and contributing to the innovation process. Co-creation will require more instruments, tools and techniques’ to enable this effectively. They are warning too much participation and too little coordination may slow down the innovation process and this growing consensual solutions ends up offering even lower innovativeness.
The motivation for innovation will be changing . The dominant aspect up to now has been company profits but with growing and complex societal and environmental problems becoming increasingly important, these will influence and become far more the driving force to innovate. This will push organizations to develop even more new (hybrid) business models to integrate all the parties making up part of these complex solutions, in the balancing out of the monetary with the non-monetary returns. We will also test the limits of participation. The increasing use of technology and software will seek ways to automatize innovation far more, where the current “creep” of algorithms, web crawler technology or simulation techni ques to access market potential and others, will have the increased implication on the place and what’s left in space for human creativity. Equally the increased security issues and maintenance of these will be equally at some degree of variance with human imagination. There will be a growth of grand challenges but as eco-innovation pushes up the agenda we will likely see a growing movement towards sustainable solutions balancing production and consumption far more, or imposing constraints so more circular flows of cradle-to-cradle innovation becomes the possible model to control. Again we need to reflect on where scaling, transfer and standardisation come into play. Seeking optimisation becomes one of the biggest challenges to tackle.
A possible move towards an innovation society? We will also begin to change within society on the perception of creativity? Do we become more of an innovation society but as we explore this we might have growing negative aspects of innovation fatigue or heaviness in the leadership expecting innovation. Lastly the significant shifts taking place of where innovation will eventually reside . Will the West become more of the fast follower, the adapter to the innovations emerging from the East? Where will the regional shifts take innovation, how will this evolve? Is the current innovation approach regarded as too ‘Western’ and the East modifie s or changes our thinking and approaches to how we innovate? We are equally moving more towards GLocalisation in design, approaches and solutions. There will be a race to anchor ‘specific capabilities’ into a country or a region will become more intense in the immediate as well as long term future. I think these all have growing implications for thinking through innovation. They each offer challenges, risks and opportunities. What is sure is that the pace and direction of innovation will change as the pressure to consider societal needs become increasingly important. We need to also look far more at the unintended and negative consequences of the consistent, increasingly relentless demand for innovation. It risks having a growing undesirable aspect that needs increasing awareness and factoring into the push for “anything new”. What do these seven dimensions have as our opportunity for us to consider? image credit: innovation-futures.org
Paul Hobcraft runs Agility Innovation, an advisory business that stimulates sound innovation practice, researches topics that relate to innovation for the future, as well as aligning innovation to organizations core capabilities.
Innovation: a Case for Entitlement (really!)
Posted on May 13, 2013 by Deborah Mills-Scofield
Isn’t it amazing how we complain about our federal government’s lack of guts to do anything about the entitlements and
yet we do nothing about it in our own organizations. Have you looked at your own organization lately? I’ve looked at a bunch of them – and the sense of entitlement, the ‘right’ to not perform because so-and-so criticized my project, the machine was down, the internet was down, the coffee machine was down – is simply astounding! Add in the predominant sentiment that this ‘generation’ is full of indulged spoiled kids who feel entitled to the latest ‘stuff’, being taken care o f, passing every course, and getting an award for just showing up (ahem, if they are, perhaps we, the parents should look in the mirror!). Well, I’d like to challenge orthodoxy and make the case for entitlement as a necessary ingredient for innovation, not a necessary evil. Let me explain. I’ve spent a lot of the last 18 months with college kids who are changing the world, having tremendous impact tangibly and intangibly – on their target markets and even on the ‘untargeted’ markets. Why? Because these kids feel very entitled – they feel entitled to try to change the world. They feel they have the right to try to improve the world around them! These kids come from affluence, from never lacking for anything, including their education to those that have struggled to get where they are, who are on aid and working to pay tuition. They don’t feel entitled to stuff or privilege. What they do feel is entitled to make a difference for others. They feel that nothing should stand in their way to try to do that. They understand may not succeed, probably won’t initially, but they have every right in the world to go for it. Because of their youth and ‘naivety’, they create innovative business models,
products, and services through partnerships based on a currency of trust and verification. They are not constrained by traditional organizational structure and are creating new frameworks for identifying and understanding markets, creating meaningful and appropriate solutions and measuring output and outcome. Here are just a few examples, though it’s hard to pick:
Hip Hop 4, founded by Pierre Ivan Arreola & Emily Goldman: a social venture using Hip Hop to
cultivate leadership with at risk youth (in LA and Providence, RI) by partnering with local artists and youth programs employing a multi-sided and revenue generating business model for sustainability. The Formula: Culture + Creativity + Service = Hip Hop 4
MED International, founded by Han Sheng Chia & Jayson Marwaha: the NGO assesses the
current equipment, clinical needs and infrastructure capacity of hospitals
in Zanzibar and ships over the
appropriate surplus/used equipment from the USA, such as incubators that are now saving lives. They created an inventory and maintenance workflow system with the Zanzibar Ministry of Health and have trained technicians to repair the equipment.
NBA Math Hoops, CEO Khalil Fuller: Middle school kids, especially boys, usually hate school but love
basketball, so why not use basketball to get kids to like math? NBA Math Hoops is a board game, and app, to do just that. The NBA gave them a license to all things NBA and Hasbro has donated manufacturing. Results? Teachers report increased scores and engagement! Not bad.
CCChampions, founded by Sidney Kushner: There are hundreds of thousands of kids with cancer in the
United States. Sidney
created CCChampions to help them feel like champions during the pain and fear of
treatment by creating 1 to 1, long-term friendships between pro athletes and these kids, inspiring them during treatment and helping them feel like champions! This effort has been recognized by several pro teams, like the
Lets Be Well Red, founded by Rajvi Mehta: 80% of the people in India are anemic without knowing it,
which causes 60-65% of maternal and fetal deaths. The solution? An iron-rich tasty nutrition bar containing the daily-required dose of iron. Rajvi created the recipe for the bar that is manufactured in India and uses student and peer awareness campaigns to distribute the bar.
GOALSHaiti, founded by Kona Shen: Combining her passion for the people with her love of soccer,
GOALSHaiti improves the education, health, and sanitation for over 600 kids and their families (nearly 5000 people in total) in the Leogane region of Haiti. The program uses soccer as a vehicle for academic learning, community service, and learning healthy living, resulting in leadership.
Runa, founded by Tyler Gage and Dan MacCombie: An early B-corp, Runa’s story is a favorite. Using
agroforestry and indigenous management and staff, they harvest the Guayusa plant in the Ecuadorian Rain Forest and sell the tea in the USA. The Ecuadorian division of Runa includes a foundation focused on the education of the farmers’ children.
I am honored, privileged and humbled to work with these young entrepreneurs and innovators. And yes, their academic environment at Brown University encourages this sense of ‘entitlement’ and yes, I am now entitled to work with them; it is addictive. So, how can we change the definition of entitlement in our world to the definition these kids live? You can certainly spend time with them, because it is contagious. But til then, look within your organization. Find the people with passion and excitement about what they do – help them change the definition with you by giving them the freedom, the air cover, the tools, to feel entitled to change their world.
image credit: hiphop4.org
Deb, founder of Mills-Scofield LLC, is an innovator, entrepreneur and non-traditional strategist with 20 years experience in industries ranging from the Internet to Manufacturing with multinationals to start ups. She is also a partner at Glengary LLC, a Venture Capital Firm.
The Flux Lines of Innovation
Posted on May 11, 2013 by Mike Shipulski
There are countless books, tools, processes, methodologies and frameworks for innovation. And cutting across all theory and practice, the biggest fundamental of innovation is fear. We define fear as bad because it limits new thinking and new actions, but there’s another way to look at it. We should look at fear as a leading indicator of innovation potential. When inputs, outputs, or contexts are different than expectations, our bodies create physical symptoms we recognize as fear. It’s this chemical change in the body, manifested as cold sweats, tingling hands, difficulty in breathing, or knotted stomachs, that’s the tell-tale sign innovation is in the house. If things are predictable, knowable, understandable, there is no fear. And if things are predictable, knowable, understandable there is no innovation. By the associative theorem: no fear, no innovation. We should learn to use our bodies as innovation barometers. When pressure builds, especially when we don’t know why, we should recognize our fear, not as a blocker of innovation, but as a leading indicator of it. Innovation, especially the type that reinvents, is not an in-the-head thing, it’s an in-the-chest thing. It’s indescribable, unscriptable, and almost spiritual. Just as migratory birds sense weak magnetic fields to guide themselves home, we can use our bodies to sense fear and guide ourselves along the flux lines of innovation. Fear is scary and can be uncomfortable. But for innovation, it’s scarier if there’s no fear.
Mike Shipulski brings together people, culture, and tools to change engineering behavior. He writes daily on Twitter as @MikeShipulski and weekly on his blog Shipulski On Design.
Taking the Mystery Out of Innovation
Posted on May 14, 2013 by Holly G Green
Many people see innovation as a mystifying process that requires blinding flashes of creative insight to come up with new products that change the world. In reality, there’s nothing mysterious about it. As defined in the dictionary, innovation is simply “making changes in something established, especially by introducing new methods, ideas, or products.” Those blinding flashes of creativity that change the world represent maybe .001% of all innovations. The rest are a combination of hard work and seeing the world just a little bit differently than everyone else. To de-mystify the innovation process and help you see the world a little differently, here are five “Playing With Your Brain” exercises from my new book, Using Your Brain To Win. 1. Conduct a cold-eye review. Think about areas, processes or products in your company that have gone unchanged for a long time. Then bring in people from outside that area of expertise to ask questions like: How long have you been doing it this way? Why? What is one thing you have always wanted to change? What is the biggest barrier to the process being more efficient/faster/higher quality…? If you were in charge of this area, what’s the first thing you would do differently? If you were creating this process/product all over again, what would it look like? If money were no object, what tools/equipment/resources would you replace and what advantage would that give you? 2. Change perspectives. When considering new products, services, or ways of working, prompting your brain with broad questions can help to shift your perspective. For example, ask employees, “What’s the one thing you’re most concerned will take us down?” Ask a customer, “What is our greatest strength? Are we leveraging it enough in the marketplace?” Ask yourself, “What if a 6-year old was involved? What if I worked for a competitor? What if I had to explain this on a daytime TV talk show? What if I just got hired?”
3. Think like Napoleon. To innovate, companies must first have a clear vision of winning. To get that clear vision, Napoleon imagined himself on the battlefield before stepping into battle. Conrad Hilton pictured himself owning a hotel before he ever bought one. Dr. Charles Mayo mentally rehearsed performing an operation before he suited up. So pause for a moment and focus on what winning looks like for your organization. Describe it to yourself with as many details as you can. Who is involved? What are you doing to win? What are the outcomes? How do you feel about winning? Then ask: what do we need to do differently to get there? Mental rehearsal of this type frees the imagination to roam, to consider different options, and to confront and achieve a new and better future. 4. Pre-think. Take a deep breath. Get rid of as many distractions as you can. Then ask: what significant changes have we seen in our products, markets, industry, customers or competitors? Think about how changes over the past six months to several years are impacting your business. What challenges are you facing today, and which ones are you likely to encounter again? What have others experienced that may be coming your way that you need to prepare for? What possibilities and probabilities are out there? “Pre-think” about how you will react when these challenges and opportunitie s happen in your sector. Then ponder what you should be considering and exploring now to get ready or, even better, to leap ahead.
5. “What if?” it. Consider what often gets said in meetings when a new idea or way of doing business is introduced. For example: “We can’t raise prices. Customers won’t go for that.” “We can’t renegotiate our deal with our suppliers.” “There’s no way we can penetrate that market because we’re the little guy.”
Pause for a moment and recognize these as thought bubbles – unspoken assumptions about your customers, business and industry that you automatically believe are “positively, absolutely so.” Then ask, What if…. I’m wrong? What else might I see? There are other possibilities? Our competitors see it differently? How would they see it? I had to prove myself wrong? What other data might I consider? We no longer had to follow these rules? How would we do it differently?
When you suspend your thinking and stop trying to prove yourself right, you’ll be amazed at what else you might see. So get out there, play with your brain, and start innovating! Call to action: Select one of these “Playing With Your Brain” exercises and put in on the agenda for your next team meeting. image credit: prlog.org
Holly is the CEO of THE HUMAN FACTOR, Inc. (www.TheHumanFactor.biz) and is a highly sought after and acclaimed speaker, business consultant, and author. Her unique approach to creating strategic agility, helping others go slow to go fast, will change your thinking.
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