The Innovation Process

Energizing values-centered innovation from start to finish


• Introduction — The Art and Discipline of Innovation • PART I — Starting Your Innovation Conversations
– – – – – Chapter 1 — What Is Innovation? Chapter 2 — Innovation and Values Chapter 3 — Models of the Innovation Process Chapter 4 — The Creative Journey Chapter 5 — Your Creative Journey

• PART II — Expanding Your Innovation Conversations
– – – – – Chapter 6 — Taking on a Challenge Together Chapter 7 — Focusing Together on What It Takes Chapter 8 — Finding Innovative Solutions Together Chapter 9 — Completing the Journey Together Chapter 10 — Being a SPIRITED Leader of Innovation

• Epilogue — Making a Difference



Waves of Innovation


Adoption d’une innovation 6 .

Area of innovation 7 .

8 . but in the real-time voyage of man into space — walking on the moon. • Edgar Mitchell. • He once related his adventure. and bringing that extraordinary shift of perspective back to the planet . is one of those rare people who had the privilege of walking on the moon’s surface . seeing the earth against the backdrop of the universe. including how his experience in space led to his returning to Earth as a very different person .Introduction • Perhaps the most significant epic journey of modern times is not found in literature. a member of the 1971 Apollo XIV crew.

Edgar Mitchell: • The idea of going to the moon was virtually an irresistible challenge. • I characterize the space flight — of getting off the planet — as being an event as significant as when the first sea creatures crawled out onto land. 9 .

• All that knowledge and skill had to be practiced to a point where it was automatic. • To deal with unexpected events. is when our judgment would come into play.• Preparation for the Apollo flight involved many skills. however. 10 . plus all the academic work.

• The automatic abort system had failed in such a way that if we tried to descend to the surface. it would automatically take us back into orbit. only minutes before the engines were to be ignited. • We finally came up with a way to reprogram the computer.• The problem that posed the most potential for creativity was before we went down to the lunar surface. • This was less than two hours before we were supposed to start down to the surface. 11 . with just a few seconds to spare.

• I recognized that our scientific description of the way the universe is put together was at best incomplete and perhaps in some ways inaccurate. 12 .• This powerful experience of seeing Earth and our whole solar system against the background of the cosmos had a very profound effect — an overwhelming sense of being connected to all things. • The universe is more of a living organism than a set of discrete things.

Automatically that brings this deeper sense of love and responsibility for one’s self. • And that means letting go of fear. along with our creative potential. surroundings. the responsibility that goes with it… to become proactive rather than just reactive. • We each have to accept. 13 .• What came out of that experience was an enormous sense of responsibility that goes with the power of creativity. environment and planet.

• He summed up his transformation. We returned as humanitarians . and that of many fellow space travelers.” 14 . “We went to the moon as technicians . by saying.

a transformative experience that illumines our continuing quest for innovation and progress .• Man’s journey to the moon and back was not only an extraordinary achievement of technical and engineering innovation. as humanity. saw ourselves floating in space . but an indescribable hallmark in the history of mankind . we. • For the first time. • It was. • The question is: Do we undertake that quest for innovation as technicians or as humanitarians? 15 . and still is.

we can more readily see that innovation can have both positive and negative consequences . science. as the pace of innovation spirals in the context of the global economy. business. religion. 16 .• In one way. the history of mankind can be told as the epic story of man’s innovations in art. • Yet today. technology and culture .

• On one hand, we have rid the world of smallpox and are on the brink of eliminating polio. • On the other hand, the major causes of death today are lifestyle-related (such as cancer and heart disease), not viral or natural; and we often use our healthcare innovations, such as pharmaceuticals, to temporarily relieve physical maladies, so we can continue our unhealthy lifestyle habits with less discomfort .

• As time progresses and we evolve as a community of species on this Spaceship Earth (as Buckminster Fuller called it), we see that we are co-creating the course of our planetary and cultural evolution through our innovations.


• So the questions of the day have expanded from “What can we innovate?” and “How can we be more innovative?” to include “Why are we innovating?” and “How can we focus our innovative thinking on more positive, useful purposes?”


• The call is not just for more innovation, but for innovation that contributes to the wellbeing of all stakeholders, including customers, suppliers, employees, shareholders, society and the environment — innovation with a social conscience, innovation driven by our higher human values .


it’s a human endeavor that can be driven by values as we work collaboratively to create what is most meaningful to us .The Art and Discipline of Innovation • Innovation is both an art and a discipline . it has processes and principles that are actually quite simple. As an art. 22 . • As a discipline. and can be learned and practiced .

23 .• The field of innovation has the Total Quality movement to thank for establishing two important principles: – Innovation is an important part of every job. – Every person has the capacity to contribute to innovation.

find and implement solutions.• When Edward Deming and Joseph Juran sparked the Total Quality Management movement in Japan in the 1950s. 24 . and follow through with continuous improvement . they taught the discipline of quality improvement: techniques to identify quality issues.

the world was beating on the Japanese doors to learn how to manage quality as well as they were . 25 .” • As we all know.• The Japanese culture supplied the all-important social structure to implement those techniques by training everyday workers — those who were closest to the work processes that needed improvement — in the art of conducting “Quality Circles . by the 1980s.

– The first is that TQM demonstrated that everyone has the capacity to generate and implement innovative ideas. • These principles apply not only to working on innovations in new products and work processes. and leadership practices . business models. That’s the discipline . That’s the art. knowledge management. – The second is that TQM spread the responsibility for quality so that “innovating improved work processes” became everyone’s job. it was no longer just the quality engineer’s job . 26 . if given the right tools . but in marketing and sales. organization design.• Two principles have emerged from this movement essential to the field of innovation .

while practicing strong values.The Journey of Innovation • To borrow a phrase.” • But it is powerful enough to build and launch a spacecraft . the art and discipline of innovation “is not rocket science . • It’s something we can all participate in. given the right understanding and framework . 27 . we will naturally contribute to others’ well being . • And when we are innovating skillfully.

So is knowledge. So are values.• Innovation means much more than just coming up with creative ideas. 28 . innovative thinking is required. and ends up with innovative achievement and new learning . • All along the way. • Innovation can be seen as a journey that starts with setting a purpose or goal. those ideas have to be put to work to create a benefit .

if ever. and implement it . involving people from R&D. sales. finance. customer service. a solitary effort . production. focus on it.Starting Your Innovation Conversations • Innovation is rarely. an innovation project could be large in scope. IT and human resources . engineering. • At other times. • It takes people working together to develop a goal. 29 . generate an innovative solution. marketing. that’s as simple as working with one or two colleagues during a normal daily routine . • Sometimes.

when we often come from so many functions and specialties? 30 . aligning and attuning your work together requires the art of good conversation .• So. whether the scope of your innovative work is small or large. • But what should that conversation be about? • And how do we speak the same language.

com/ 31 .theinnovationprocess.http://www.

his price was less than half of IBM’s for a comparable computer . • By eliminating the middle-man. rather than using retail outlets . he ran a dorm-room business selling random-access memory (RAM) chips and disk drives for IBM PCs with revenues of $80. • He sold directly to customers.Chapter 1 What is Innovation? • When Michael Dell was a 19-year-old college student at the University of Texas. much to his father’s chagrin. • He left school.000 per month . 32 . and began assembling and selling IBM PC clones under the name PC Limited .

a revolution occurred in the industry . • With Dell. in his words. each computer was built to the customer’s own specifications. and fully paid for before assembly — quite a nice financial model . and sold its inventory through retail stores .• When Michael started Dell Computers. he also established a unique manufacturing system — one in which the inventory of parts should have. • And the business model needed less overhead . • Not only did Michael cut out the need for an inventory of fully-built machines.” 33 . and direct-toconsumer sales became the core of his business model. “the shelf-life of lettuce. • Every other computer manufacturer made its best estimate of how customers wanted their computers to be configured.

Dell Inc. • Today. 34 .• Dell Direct became not only the theme of the business model. and avoid the kind of politics and turf wars so common in corporate life. • To facilitate the open sharing of information. but a cultural norm as well . is the world’s largest PC manufacturer. • Would you say that the Dell’s direct-to-consumer business model was an innovation? • Your answer depends on how you view and define innovation . ideas and intelligence. leaders in the company were actively encouraged to deal directly with each other.

35 .

It’s tricky because of the word exactly . and a tricky one .Defining innovation • What exactly is innovation? It’s an obvious question to ask. • Take for example this variety of definitions developed over the years: 36 .

new methods of production and distribution. new method. device. or new sources of production for existing commodities. change in the way of doing things. something newly introduced. renew. 1942) • The act or process of innovating. etc. (Webster’s New World Dictionary. Socialism and Democracy. or introducing new forms of economic organization. Capitalism. (Schumpeter. custom.Defining innovation • Introducing new commodities or qualitatively better versions of existing ones. finding new markets. alter. Second College Edition. 1982) 37 .

Leading for Innovation and Organizing for Results. practice or object that is perceived as new by an individual or other unit of adoption. Frances. 2002). • An idea. Diffusion of Innovations. (Peter Drucker. (Rogers.Defining innovation • Change that creates a new dimension of performance. in Hesselbein. 1983 and1995) 38 .

Defining innovation • The capability of continuously realizing a desired future state. Innovation Strategies of the World’s Most Innovative Companies. leading to the creation of economic value. (Eric von Hippel. (U .S . 2005) • The intersection of invention and insight. 2005) • Anything new that is actually used (enters the market place) . (Daniel Montano. (John Kao. National Innovation Initiative. 2005) • The staging of value and/or the conservation of value. 2006) 39 .whether major or minor. Democratizing Innovation. The Innovation Manifesto.

as John Emmerling — innovation consultant and former ad-agency creative director— once said: Innovation is creativity with a job to do. creativity is the concept and innovation is the process • Or. original ideas . Senior VP for R&D at 3M. • A starting point is to first make a clear distinction between creativity and innovation: – Creativity is coming up with new. day-to-day . whereas innovation is the successful implementation of those ideas within an organization. • Wayne Coyne.• With this multiplicity of definitions. In other words. 40 . – Innovation is putting those ideas to work and creating a benefit . let’s bring it down to simple terms we can all use. put it this way: – Creativity is thinking of new and appropriate ideas.

This broadened view allows us to fully engage all employees in our creativity/innovation program and to tap into the creativity that is in us all. • But that’s not all to the innovation scene . • For example. the Clorox R&D group included process innovation as equally important: – We define innovation as the implementation of creative ideas to produce new or improved processes or products. – Instead. 41 .The domains and aims of innovation • Many people think of innovation only in terms of producing new products or technologies sold to make money — jobs that only a few of us might actually be working on . We do not limit our view of processes and products to those that are related to goods sold to consumers. we also include better ways of doing our jobs and new tools that make us more productive.

• While new products and new processes are two very distinct domains where innovation can occur in an organization. • Knowledge innovations relate to how we create and manage knowledge so that an organization’s intellectual capital increases . so are two more equally important domains: knowledge and leadership . Author Meg Wheatley described this domain of innovation: – Innovation arises from ongoing circles of exchange. but created. Knowledge is generated anew from connections that weren’t there before. where information is not just accumulated or stored. 42 .

• Innovative approaches to performance appraisal can actually inspire and encourage risk-taking and innovation. • Michael Dell’s business model was an innovation that focused everyone on what and how to deliver their products and services. rather than squelch it. 43 .• Innovations can also transpire in how the leadership of an organization develops new business models. • The aim of leadership innovation is to focus and inspire the organizational leadership and workforce. fosters a culture. designs the organization. and manages its human resources.

Mid-Line. • Chart 1 names these four domains as Top-Line. and each domain has its own specific aim . Knowledge and Leadership (where Top-Line and Mid-Line refer to the intended impact on the balance sheet of the business) 44 .• Organizations focus on four innovation domains.

Chart 1 — Domains and Aims of Innovation 45 .

• An important point to note is that in many rollouts of a major innovation. • For example. new processes may be put into place. new knowledge of customer segmentation may be created. 46 . and a new business model to make it all work together successfully . all four domains of innovation could be involved . when a new product is being launched.

more reliable warranty coverage and repair. providing better training of employees. 47 . finding cheaper sources of materials. distribution and sales. finding new markets and consumer needs. speedier consumer service and complaint handling. establishing more efficient techniques of manufacture. attentiongetting advertising.• Robert Reich underscored this diverse set of domains and aims for innovation when he spoke about entrepreneurs: – They innovate by creating better products at less cost.

you might be improving productivity or quality.• The point is that innovation is part of everyone’s job — including yours. and everyone can participate in innovation — in at least one of these four domains . or improving employee relations . 48 . • If you’re not producing the next new product or service. or sharing best practices across the organization.

how it is being done. and impact • Invention is the creation of a new device or process… • Innovation is the introduction of change via something new. Rouse. change. as shown in Chart 2 . 1992 • Every innovation introduces change — in what is being done.Innovation. — William B . • Classically. Strategies for Innovation. or even why it is being done . 49 . innovation can produce two distinct degrees of change: revolutionary-breakthrough change or evolutionary-incremental change.

Chart 2 — Sustainable Innovation 50 .

• And focusing only on incremental change can lead to extinction. both degrees of innovation are important for sustainable innovation 51 . • Over time.• To manage innovation over the sustainable long term. we need to foster both breakthrough and incremental change. • Focusing only on breakthrough change can lead to exhaustion. as we don’t do what it takes to keep up with the times. as we don’t take the time to integrate the change.

• But from the perspective of actually selling an automobile. 52 . the engineers could very well consider it a major breakthrough in providing fuel efficiently and effectively. • For example. when electronic fuel injection (EFI) replaced carburetors in automobile engines.• Sometimes it’s hard to tell whether an innovation has produced a breakthrough or incremental change. the salesperson might consider EFI to be an incremental improvement in the overall performance and perceived value of a car. it can all depend on one’s job perspective.

53 . situations can arise in all four of the quadrants in Chart 3. • In fact.• A very important distinction — not often made — is that the amount of change introduced by an innovation is not necessarily the same as the overall impact of that innovation.

Chart 3 — Degrees of Change with Innovations 54 .

55 . however.• When most people think about breakthrough change. they typically assume that it means a change that will have high impact (the upper-right quadrant). that is not always the case .

August Dvorak. given the dominant preference market for the QWERTY keyboard . the impact of this innovation is extremely low. and is included with major operating systems such as Mac OS X. 56 . low impact (upper left quadrant) is the Simplified Keyboard. • He designed it to overcome the inefficiency and typist fatigue that was common with the standard QWERTY keyboard layout (which had been designed in 1860 for the first commercially successful typewriter). • Still. Microsoft Windows. patented in 1936 by Dr . and Linux .• An example of high change. • It has seen an increase in popularity in recent years among computer programmers who do a great amount of typing. an educational psychologist and professor at the University of Washington .

when most people think about incremental change. high impact (lower right quadrant) is a story of Ford Motor Company in 1994 . this assumption is not always the case. However. • Again.• Similarly. 57 .000 to the company’s pre-tax profits. • A worker had come up with an idea that saved the seemingly insignificant amount of only $ . they usually assume that it means a change that will have a low impact (lower left quadrant). it ultimately had the impact of contributing $500. • An example of low change.10 (10 cents) on the cost of manufacturing a vehicle.

• So. • Nor do you have to shoot for the big breakthrough to realize a big impact . you don’t have to measure the innovative contribution you make by the amount of change you instigate . • The innovation cycle contains differing degrees of change as well as differing degrees of impact. to which everyone can contribute 58 .

If something new is produced and no one is affected by it. is it really an innovation? • This question is a bit like the old philosophical inquiry: If a tree fell in a forest and no one heard it fall. did the tree make any sound? • Here the question is. is it an innovation? 59 .How do you know when you’ve been innovative? • Here’s an interesting question to ponder: If an intended innovation fails to achieve its aim and doesn’t get utilized.

whether it is used or not: – (Innovation is…) the idea.• Twenty years ago. Sumantra Ghoshal and Christopher A . Bartlett pointed out in an HBR article (“Innovation Processes in Multinational Corporations. or that is regarded as novel independent of its adoption or non-adoption.” Harvard Business Review. 1987) that some people would say that innovation occurs. practice. or material artifact that has been invented. 60 .

61 . most others in the field of innovation (as we’ve sampled in the quotes that began this chapter) would say that innovation occurs when there is some tangible impact: – (Innovation is…) a process which proceeds from the conceptualization of a new idea to a solution of the problem and then to the actual utilization of a new item of economic or social value.• On the other hand.

The perceived newness of the idea for the individual determines his or her reaction to it. had this to say: – It matters little whether the idea is “objectively” new as measured by the lapse of time since its first use or discovery.• Another question often asked is whether an innovation has to be totally new — never before seen by the eyes of man — or can it just be the “first time” within an organization . it is an innovation. 62 . If the idea seems new to the individual. a pioneer and expert in identifying the patterns of product innovations as they diffuse through society. • Everett Rogers.

it’s an innovation for you. • That’s what it takes for you to say that you’ve been innovative .” or some other earth-shattering idea brought to life . • It just has to be a new concept that gets implemented and creates some benefit for someone. 63 . what it all comes down to in our real. day-to-day work life is that an innovation does not have to be some invention “never thought of in the history of mankind. • So long as it’s new for you and your organization. somewhere.• While these philosophical questions can be interesting to debate.

Having an innovation conversation Before we move on. and see what you can learn from each other . How involved have you been with incremental or breakthrough change? How does this relate to the level of impact that you produced as a result? 64 . Looking over the four domains of innovation. let’s focus on you for a moment . To help clarify and integrate your insights from this chapter. 1. which have you participated in? – – – – Top-line / revenue producing innovation Mid-line / process improvement innovation Knowledge innovation Leadership and management innovation • 3. Use them to start an innovation conversation with your colleagues at work. What is your own definition of innovation as it relates to your work? 2. consider the following questions .

and he once received the “Inventor of the Year” award from the U . • At both companies. Intellectual Property Owners Association for his RISC architecture work.Chapter 2 Innovation and Values • As Director of HP Laboratories. 65 . he was responsible for all corporate research and advanced development. and later as Executive VP and Chief Technical Officer of Philips Electronics.S. Frank Carrubba is one of favorite consulting clients .

66 .• Frank shared the results of a study he sponsored at HP Labs about the difference between product-development teams that failed. and those that achieved extraordinary success. those that succeeded. • Relationship between innovation and the values held by individuals and teams .

motivation and commitment to succeed.• The study found that teams that failed differed from those that succeeded in degrees of talent. there was no difference in these factors between the successful and extraordinarily successful teams . 67 . • Instead. • However. two other factors clearly stood out.

Frank found that Those teams that stood out had leaders and managers who treated their customers as they themselves wanted to be treated. 68 . • He said those teams not only perceived that they had customers (a techie breakthrough in itself at the time). but also truly cared for those customers .• First.

69 . every single hour of the day. or know something they didn’t know . Frank saw that Team members found in themselves the qualities of spirit and truth… • They were people who had no reason to wear a particular mask. because they were always what they were. He said they were authentic. and didn’t have to pretend to be something that they weren’t.• Second.

in the ultimate hightech world. was the presence of two sincerely-practiced values: caring and authenticity . 70 .• There you have it — a remarkable finding that Frank also repeatedly observed as Executive VP at Philips: the difference between successful teams and extraordinary teams.

let’s say.• Frank made sense of this discovery by saying that a team of people with high levels of talent. motivation and commitment will naturally find a way to achieve. • But extraordinary success demands more. • And that’s where the values of caring plus authenticity come into play 71 . 75 percent of their potential . and achieving 100 percent of their potential depends on the quality of relationships that they foster .

• Values play a critical role in both . it’s a collaborative human endeavor . • As an art. I spoke about the art and discipline of innovation . when there are so many other important things to cover about the innovation process?” • In the Introduction. it has processes and principles that can be learned and practiced .The role of values in the art and discipline of innovation • At this point you might be asking. “Why make such a big deal about values. 72 . As a discipline.

team and organization — we are conscious of creating what is truly important to us and beneficial to others. values are what motivate us to complete the full process. 73 .• When innovation is values-centered at all levels — individual. from start to finish. • So values are part-and-parcel of any discussion about innovation . • And since innovation is more than just dreaming up a creative idea. and sometimes we have to work hard to actualize that idea.

74 . Values shape what is meaningful and motivating for us .• The word value comes from the Latin verb valere. say and do . values are feelings and convictions regarding what is of strong worth (i .e . of importance) to us in what we think. which means to be worth and to be strong. • In our daily lives..

• Having personal values as the driver of innovation raises the level of personal investment. dedication and commitment it takes to innovate 75 .• Personal values have long been underappreciated as a driver of innovation . • People who are aware of their own values will naturally strive to find a way to express them through their work .

• In their research. people were asked to rate three things: – How well they understood their company’s values – How well they were aware of their own personal values – How committed they were to their work 76 .• Research by Barry Posner and W . Schmidt has shown that clarity about our personal values is more important to our job commitment than clarity about our company’s values . H .

not from more understanding of company values! 77 .• Chart 4 shows a surprising result: the increase in commitment came only from an increase in self-knowledge about personal values.

Chart 4 — Values and Commitment 78 .

the ideal is an alignment between company values and personal values. • These values are part of the mission-visionvalues that align and attune employees to a common direction and are intended to guide decisions at all levels and provide cohesion . 79 . • It seems like every organization today has a set of values it wants its employees to embrace and practice.• Of course.

but find it difficult to hire and keep self-actualized individuals and talented people. consultant and author of Liberating the Corporate Soul: Building a Visionary Organization: – Research shows that when the values of employees are in alignment with the values of the organization (the leaders of the organization).• According to former World Bank Values Coordinator Richard Barrett. the organization is more successful and more focused on customer satisfaction and community service. bureaucratic and stressful to work in. 80 . They may be financially successful. Organizations that don’t have this alignment tend to be more inward looking.

• The alignment between organization values and personal values often comes when people come together in teams. these managers fostered the linkage between personal and organizational values. • One finding was that their best 200 managers consistently worked with their people to define a set of group values that everyone was committed to. • The Hewlett Packard Corporation once conducted an internal study to discover the best practices of their highest-performing managers. • They then posted these group values as “guiding principles” for all decisions and actions. • Through these discussions. 81 .

bold or exciting results with your innovative work. values are the key. • They help teams to work collaboratively toward goals based on common priorities. 82 . • And they help organizations foster a positive culture. practical.• Whether you and your team or organization are trying to achieve realistic. • They help individuals to tap into their greatest sources of energy and inspiration as they more fully invest themselves in what they are doing .

• On the other hand. • On one hand.Who benefits from innovation? • It’s not hard to see the positive and the negative impact that the human propensity for innovation has had on our quality of life. we have an electronic global network. 83 . we have the accelerating effects of global warming .

power and demands of these jobs. we have fostered a new breed of workaholics who choose to work rather than spend time with their families. we have innovated with job design and job enrichment.• On one hand. 84 . to empower people with more complex and selfaffirming jobs. in white collar jobs as well as manufacturing. leading to an epidemic of work-life imbalance. • On the other hand. with the allure.

• Whether we focus our innovation impacts on our own sphere of life — work colleagues.000 miles away can have a huge impact on us . • Marshall McLuhan coined the term Global Village to communicate that we’re all neighbors. customers. And vice-versa 85 . for better or for worse . and sometimes it’s with our whole community or country. and the actions of people 10. • Sometimes that impact is with just a few colleagues at work. friends and family — or a larger picture of society. what we do today co-authors the story of the future . it is an important reminder that what we do daily in our work has an impact on the people and environment around us.• While this list could go on and on. sometimes it’s with our many customers. or more .

society.• This point of view raises some provocative questions for every person and organization: Thus far. even the environment? – Where do they fit in to the picture? – Are our innovation activities fueled only by self-serving motives? – Or are they energized by our wish to contribute to the well-being of others? – Can we afford to do both? 86 . – But what about the people outside the organization — such as customers. suppliers. we’ve focused on the domains and aims of innovation from the point of view of the organization that is producing them. shareholders.

• An example of this dual choice for supporting “fellow villagers” while growing a successful enterprise comes from the Planters Development Bank in the Philippines . both are possible at the same time .• More than most people expect. and the story she shared demonstrates what can happen when people in an organization integrate their values with the art and discipline of innovation 87 . when values are the driver of innovation. • Floy Aguenza is its President.

• Originally. and their businesses started to flourish. During the times when it was starting out as a small bank in a provincial town. we became friends. this bank found a new calling. it had no choice but to cater to the small businessmen of the area. helping their business as financial advisors and even more than that. the bank’s Chair wanted the bank to join the top tier of big banks in that country. but as Floy stated: – Somewhere along the way. We became a part of their lives. giving them the proper guidance. 88 . We worked closely with them.

89 .– We saw the impact our bank was making within this small community. we made a decision that we would continue to serve this niche. and it touched our hearts in a special way. no matter how big we would become. From then on.

90 . deliberately including their customers’ values in their credit approval process: – When talking to new customers. We go to their place of business to observe how they run their business and treat their employees. an important part of our credit process is finding out about the character and lifestyle of the principal. We want to lend to companies and businesses which are anchored on the right values.• The bank was innovative in the way it attracted new customers and developed relationships with them.

and its role in society. In our case. This must be balanced with all of the other concerns of the organization. – This bank has been set up by the shareholders and they expect a good return.• They even developed a unique approach and philosophy to growing the bank financially . profitability and social impact are fundamentally intertwined. However. equally clear to us is that it is not profit at all costs. 91 .

92 .– We are the only development bank that is partly owned by multi-laterals such as the World Bank and the Asian Development Bank (ADB). They invested in our bank because they saw our developmental impact and how we are serving as a catalyst for economic growth by our work with the small and medium enterprises (SMEs).

If we all do something. not just strive to be number one while sacrificing all else. It’s all a question of values . Businesses must live by the right values.• What is Floy’s message to the rest of us about the role of business in society? – Businesses have a role to play in nation building and in building the character of the people. suppliers and employees. 93 . society as a whole. shareholders. • It’s clear that we can target our innovative efforts to contribute to the well-being of others — customers. and the environment — even as our own organization thrives . we can all gain.

• One way to experience the relationship between learning and innovating is to tune into our own breathing rhythms . • And in return. learning stimulates innovation . innovation gives birth to new learning and knowledge . 94 .What is Values-Centered Innovation • A discussion about innovation would not be complete without acknowledging the link between innovation and learning . • In the form of information and knowledge.

deciding upon. implementing and celebrating innovative responses to opportunities and challenges 95 .• Learning and innovating go together just like inhaling and exhaling: – Inhaling = learning: acquiring. creating and sharing new knowledge. converting knowledge to wisdom – Exhaling = innovating: generating.

So what? 96 .• Values play the key role of asking.” • In quick review. “Why are we breathing in the first place?” — and providing the meaning and motivation for this “breathing process . we could say that learning provides new levels of Know-what? Innovation produces new levels of Now what? • And values pose the question.

• In Frank Carrubba’s story at the beginning of this chapter. • Daniel Goleman’s model of EI and management effectiveness emphasizes the importance of self-awareness. understand and manage our emotions . 97 . and relationship management . social awareness.• When we put our values into practice. we also strengthen our emotional intelligence (EI) — our ability to perceive. self-management. use. the key value of caring is part of social awareness and the value of authenticity is part of relationship management .

We can conclude that .• Integrating all that we’ve covered thus far. 98 . we can now revisit and expand our original definition of innovation to include learning and values .

shareholders and the environment) • while generating new revenues. increasing intellectual capital. employees. suppliers. processes. reducing time and costs.VALUES-CENTERED INNOVATION IS: the application of learning and knowledge to develop and implement breakthrough and incremental improvements in products/services. team and organizational values 99 • • • • . inspiring the work force. and focusing the leadership • in alignment with personal. society. knowledge and leadership/management practices • to contribute to the well-being of stakeholders (customers.

How are those personal values reflected in what and how you innovate? 3. Consider: 1. consider the following questions . When you add the dimension of values. What personal values do you hold as most important in your own work? 2. How aligned are your personal values with your organization’s values? How does this impact how and why you innovate? 4.Having an innovation conversation • • • To help clarify and integrate your insights from this chapter. how does it change your definition of innovation from Chapter 1? 100 . Use them to start an innovation conversation with your colleagues at work. and see what you can all learn from each other .

101 .

102 .

Kennedy spoke to a joint session of Congress to paint a vision and request the funds for the United States to “take a clearly leading role in space achievement.S.” 103 . 1961. which in many ways may hold the key to our future on earth.Chapter 3 The Process of Innovation • On May 25. U. President John F. just 43 days after cosmonaut Yuri Gagarin of the Soviet Union became the first human in space.

Kennedy: • I believe that this nation should commit itself to achieving the goal.F.J. and none will be so difficult or expensive to accomplish. 104 . of landing a man on the moon and returning him safely to the earth. or more important for the longrange exploration of space. Let if be clear that I am asking the Congress and the country to accept a firm commitment to a new course of action — a course which will last for many years and carry very heavy costs. before this decade is out. unless we are prepared to do the work and bear the burdens to make it successful. No single space project in this period will be more impressive to mankind. There is no sense in agreeing or desiring that the United States take an affirmative position in outer space.

1961 speech about what he foresaw: 105 .• The commitment from Congress and the nation came. 1969. and Kennedy’s vision was achieved on July 20. But what did it actually take to achieve this monumental task? President Kennedy was quite clear in his May 25. when Apollo 11 commander Neil Armstrong stepped off the Apollo Lunar Module’s ladder and onto the Moon’s surface .

and the possibility of their diversion from other important activities where they are already thinly spread. If we make this judgment affirmatively. 106 . it will not be one man going to the moon.J. Kennedy: • In a very real sense. It means a degree of dedication. or a high turnover of key personnel. it will be an entire nation. This decision demands a major national commitment of scientific and technical manpower. wasteful interagency rivalries. material and facilities. It means we cannot afford undue work stoppages. inflated costs of material or talent. for all of us must work to put him there. organization and discipline which have not always characterized our research and development efforts.F.

organization and discipline that had not existed before . • One tool NASA used was what has become known as a first generation model of the product or technology innovation process. It adopted new ways of managing and developing all the innovations it would take to land men on the moon and bring them back safely .The NASA model • NASA took up the charge to foster a degree of dedication. • The NASA model showed development in sequential phases. as shown in Chart 5 . called a phase-review-process. • It was used as a management tool to systematize and control work with contractors and suppliers on space projects . 107 .

Chart 5 — Phase-Review-Process Model 108 .

109 .

110 .

technologypush or science-push model . the so-called father of the study of innovation. 111 . insights about market-pull or demand-pull innovation — driven by consumer demand rather then scientific discovery — produced a different form of this linear model as shown in Chart 6 . • By the 1960s. who believed that the process begins with inventions and ends up with innovations that make money — a view that became the basis for a linear.• This phase-review model drew from the 1930s pioneering of Joseph Schumpeter.

Chart 6 — Technology Push/Demand Pull Model 112 .

process innovation. • Innovation process models across every domain of innovation: revenue producing innovation. evolved. • Not limited to product innovations. modified and morphed into perhaps an overabundance of possibilities to choose from. knowledge innovation and leadership innovation. models of the innovation process for new products and technologies have been expanded.Innovation Models • Since then. 113 .

114 .

such as this one from Coopers in Chart 7 . 115 .Innovation process models for topline innovation • By the 1970s and early ‘80s. revenue producing innovations had morphed from the phase review model into stage-gate models. models that mapped the process for top-line.

Chart 7 — Stage-Gate-Process Model 116 .

117 .

118 .• But these models faced criticism because of their apparent linearity: – Models that depict innovation as a smooth. uncertain. wellbehaved linear process badly misspecify the nature and direction of the causal factors at work. technological and other types of constraints — all simultaneously. Innovation is also difficult to measure and demands close coordination of adequate technical knowledge and excellent market judgment to satisfy economic. Innovation is complex. and subject to changes of many sorts. somewhat disorderly.

and faster time-tomarket 119 . Such models (shown in Chart 8) brought closer attention to the process innovations needed to support product/technology innovations. in which the roles of various functions are described and woven into an overall process .• Ulrich offered a modified stage-gate model. responsive cycle times. such as quality control and improvement.

Ulrich Normative Process 120 .

and business planning as the three most influential functions involved with innovation 121 .• The most recent network models aim at showing the complexity and uncertainty involved in the innovation process . • One such model by Trott. shown in Chart 9. identifies marketing. research and technology.

Chart 9 — Network Model 122 .

they give more detail to the complexity by mapping all the variables. such as this model in Chart 10 of the technology innovation process developed by Vargonen 123 .• As researchers continue to integrate the best of models.

Chart 10 — Technology Model 124 .

125 .• There have been many other innovation process models for new product and technology development . • Study them further: the internet provides a wealth of resources .

Innovation process models for midline innovation • These two historically-important process improvement processes were an inspiration for the later Total Quality processes . Shewhart in 1939. • The first was invented by W .A . 126 . as shown in Chart 11. and made popular through Edward Deming . and mapping a repeated cycle of continuous improvement. • Their Plan-Do-Check-Act (PDCA) process was very useful in solving quality issues.

Plan-Do-Check-Act (PDCA) Model 127 .

purchasing and quality employed a formal protocol to improve the manufacturing process and reduce costs. developed by Larry Miles at GE during World War II. engineering. • That protocol had eight basic steps as shown in Chart 12 . • This model was the precursor to the Measure. Improve process that is the basis of the Six Sigma improvement process — though Six Sigma adds a Control step 128 . whereby cross-functional teams from design. Analyze.• The second was Value Analysis.

Chart 12 — Values Analysis Model 129 .

• Nonaka conceived of a model for knowledge creation that incorporated both tacit knowledge (resident in individuals and groups as personal experience or intuitive knowing) and explicit knowledge (formulated. captured concepts).Innovation process models for knowledge innovation • Another domain of innovation is knowledge. as shown in Chart 13 . 130 .

Chart 13 — Knowledge Creation Model 131 .

132 .

133 .

4. Enlarging individual knowledge Sharing tacit knowledge Creating concepts Justifying concepts Networking knowledge 134 . 2. 3.• The resulting knowledge creation process has five key steps. 5. where the end result can be knowledge innovations in any field of human endeavor — impactful to the degree that the concepts are employed and then integrated into day-to-day experience: 1.

measurements are taken to determine whether the pilot implementation did. Processes. – At the Check stage.Innovation process models for leadership innovation • The domain of leadership innovation also has identifiable processes associated with it for us to consider . author of Organization Development Principles. Performance in 2005. 135 . if successful. decisions are made about what might be done to improve the organization and its processes. is implemented . – At the Do stage. the process. using a variety of decision making tools . – At the Act stage. the action research model that is deeply embedded in the practice of Organization Development has a similarity to the Deming/Shewhart PDCA model. • According to Gary McLean. those plans are carried out in a pilot or trial implementation . through a commitment to continuous improvement: – At the Plan stage. in fact. result in the changes desired .

• Each of the eight components or phases interacts with the other phases. 136 . he offered a modification of the PDCA model that he called the organization development process (ODP) model .• But because of the critique that models like this appear too linear and don’t portray overlapping stages. as shown in Chart 14 .

Chart 14 — Organization Development Model 137 .

• For example.Creative problem-solving processes • There’s a fine line between models of innovation and those of creative problem-solving . consider the classic OsbornParnes Creative Problem-Solving (CPS) model invented by Alex Osborn. • Their model has six steps as shown in Chart 15 138 . executive vicepresident at the huge BBDO advertising agency. and researched by academician Sidney Parnes .

Chart 15 — Creative Problem-Solving (CPS) Model 139 .

• Showing the parallels between the CPS model and models of the product innovation process is not difficult . Development (work out the bugs and scale up) 6. Donald G . in 1988. Solution (solution through invention. • For example. Utilization and Diffusion (implementation and use) • A comparison of his model and CPS. Recognition (technical feasibility and potential market demand) 2. Problem-Solving (search. Idea Formulation (fusion into design concept and evaluation) 3. in Chart 16. solution through adoption) 5. readily available information) 4. Marquis described a six-step innovation process: 1. experimentation and calculation. shows the overlap of concepts 140 .

Chart 16 — Comparison of Marquis and Osborn-Parnes Models 141 .

how would you describe them? 3. or models. Did the model. seem to miss anything that you felt was important? If so. • Use them to start an innovation conversation with your colleagues at work. what was that? 142 . How effective was the model. consider the following questions . Have you used one or more specific innovation process models to guide your innovative efforts? 2. did they have a common set of stages or tasks? If so. If more than one. or models. in helping you achieve your goals? 4.Having an innovation conversation • To help clarify and integrate your insights from this chapter. and see what you can all learn from each other . • Looking back on your past projects: 1.

• But when the bowling boom there went bust. market lagged. a big bowling craze developed in Japan. and have something totally new to sell 143 . • They had been selling the same mechanical pinsetter for more than 25 years . all those pinsetters went onto the used market . a VP of Engineering from the Brunswick Corporation’s Bowling Division — one of the two leading makers of bowling equipment — called for help with a challenge he faced . • Brunswick sales were way down .S . The VP of Engineering thought he saw a solution: reinvent the pinsetter with up-to-date technologies. At one point. while the U .Chapter 4 The Creative Journey • Many years ago. and Brunswick had sold a huge number of those pinsetters .

• The first thing we did was to look closely at the goal the VP had laid out: was the task at hand really to reinvent the pinsetter. or was it something else? • They realized his real goal was to rejuvenate the entire bowling industry — to bring people back to bowling through a totally new experience of what it meant to play that sport .• How that project unfolded filled in a lot of the missing pieces I had seen in the • innovation process models I had studied up to that point. 144 .

• They began to select the kinds of people who could come together in a multi-day. not just pinsetters . such as an expert from the luxury cruise industry. 145 . software engineering. • They also invited a wide variety of other specialists. digital detection equipment. and other technologies . cross-functional innovation search — an idea-generation session that would focus on the entire experience of bowling. who knew about the entertainment experiences that people were looking for . • They ended up involving specialists in robotics.

including topics such as new scoring systems and technology-based feedback-coaching systems . 146 . • They selected specific focus areas. asked a few key specialists to deliver stimulating talks on those subjects to spur our idea generation .• They collected research on market trends in related industries and technology trends that might impact our search . • Then.

and how he did on different pin combinations. • As a sampling. his averages. etc. – A computer system that analyzes a bowler’s performance and recommends ways to improve technique. they generated hundreds of ideas and clustered them in a variety of ways .• Over the first two days of the innovation search. here are a few of the ideas that were voiced: – A pinsetter that sets whatever pins a bowler wants set for practice purposes – A “smart card” that “remembers” who a bowler is. depending on what mistakes were being made 147 .

(changing scoring methods) 148 . and so on. accuracy. as the ball travels down the bowling lane – Put bumpers into the side gullies so that the bowling ball always bounces to hit pins — important for people new to bowling (including kids and adults) – Changing the normal scoring system by allowing a person to “bet” one’s pins on the odds of an opponent picking up on a particular spare. etc.– Feedback on speed.

such as: – A pinsetter that sets whatever pins a bowler wants set for practice purposes – A computer system that analyzes a bowler’s performance and recommends ways to improve technique. as the ball travels down the bowling lane – Putting bumpers in the side gullies 149 . accuracy. Certain ideas made it.• Then. and so on. it came time to narrow down the ideas and select the most promising ones for technical and market feasibility studies . depending on what mistakes were being made – Feedback on speed.

• It took a couple of months to complete the feasibility studies and return to Brunswick to help make a final decision about what to take to the Board as priorities for development funding . the final decision wouldn’t come until after prototypes were tested in their labs and in actual facilities 150 . • Even then.

so they could determine if they needed to speed up or slow down their ball delivery to hit the pins better . one of the early hits was putting in a ball-speed indicator — using a radar gun (like highway police use) — which gave bowlers feedback. • As the Engineering VP later told me. 151 . they began to install and do final testing of new products in company-owned bowling centers within a few hundred miles of their headquarters .• Finally.

• One key to the renewal of Brunswick’s bowling business was the new GS pinsetter. • The side-gulley idea (for people new to bowling) has turned into their Pinball Wizard bumper bowling system 152 . which led the way to being able to reset a previous pin combination when pins were inadvertently knocked down after a first ball was bowled . the GS-X.000 installed worldwide. is the #1 selling new pinsetter in the world. with more than 10. the latest generation of pinsetter. • Today.

and my professional curiosity got the best of me . • What could I invent that might contribute to the field of innovation? 153 .The beginning of a new model • This Brunswick project occurred when I was just beginning to formulate my version • of the innovation process . • It wasn’t that I needed my own process model — but I had seen the potential for a robust yet simple model that could apply to projects in any domain of innovation.

They did the feasibility studies. 3. They generated a wide array of potential ideas and concepts . with some very fuzzy boundaries between them. indicating • overlapping and simultaneous stages: 1. my initial “map” of the innovation process for that bowling project • contained five steps.• Looking back. add to. and produce new generations of those product lines . and prioritized the issues that needed creative ideas . 2. development and prototyping necessary to make a final decision of what to implement . those stages corresponded well with the product innovation models I had been studying . 4. 5. 154 . • As shown in Chart 17. They gathered and analyzed data. They scaled up and commercialized the new products — and continued to refine. They set a purpose and direction (goal) .

Chart 17 — Comparison of Miller Observations with Other Innovation Process Models 155 .

• That person could bring an entirely new perspective to stimulate our innovative thinking . I would bring in a person who was great at generating ideas. innovation process in a totally different field — cultural mythology 156 . but who was from a field that had little relation to the topic at hand .Finding what was missing • Many times when conducting Innovation Searches with clients. • In the same way.

Chart 18 — Comparison of Heroic Journey with the Innovation Process 157 .

Chart 19 — Creative Journey Model 158 .

through four distinct stages: 1. The Creative Solutions — generating ideas and then developing and deciding on the best solution 4.• The Creative Journey is a roadmap of the innovation process that enables anyone to practice the art and discipline of innovation with greater awareness and skill. The Focus — tapping into your source of confidence and prioritizing issues you need to resolve 3. The Challenge — deciding what you want to accomplish and acknowledging the risks along your path 2. The Completion — implementing your solution and celebrating what you accomplished and learned along the way 159 .

Five of the eight tasks in the Creative Journey were mental tasks highlighted in most or all of the other models . Two tasks were never highlighted in the other models: assess risksand tap into character. was only infrequently mentioned in other models. 2. and then only as monitoring or evaluating results 160 . The four stages can be found in all the main innovation process models studied from the four domains (though most of the stage-gate product development models were very light on where the original concepts came from) . then compared it with the models studied from various domains . • Looking at Chart 20. A third task. you can see: 1. 4. celebrate results.• Upon completing the development of the Creative Journey model. 3.

the three tasks mentioned in #3 and #4 above — all related to the three insights I had from Bernbaum’s book — kept drawing my attention. IT. • However. involving a variety of tools and techniques . and I began to delve more deeply into their significance for the innovation process 161 . manufacturing. • For example.• Also noteworthy to me was seeing that each stage and task in the Creative Journey might have multiple subtasks to complete. marketing and distribution — and each of those functions might need its own Creative Journey to determine how to accomplish its responsibilities during that implementation task of the larger innovation process . the task of implementation for a new product could include the sub-tasksfor engineering.

• Those teams often started with great confidence and enthusiasm. but as they began to face the risks. fear.Confidence and energy in the innovation process • Looking again at Chart 20. then their ideas lacked boldness. values and sense of meaning that is required to drive the innovation process forward . but the art was missing . • I recalled tales that many innovation teams had told me about their emotional ups and downs during projects . uncertainties and obstacles of their projects. • They were replete with discipline. • If they jumped from there straight to generating ideas for meeting their goal. overwhelm and a loss of confidence . originality and stretch — they were safe. status quo kinds of ideas . 162 . they often felt frustration. I saw how none of the models highlighted anything about the character.

Chart 20 — Comparison of Creative Journey with Other Innovation Process Models 163 .

Chart 21 — Confidence Curve 164 .

• Together. with very little dip at all .• An immersion into a state of fear and uncertainty wasn’t all bad. we’ve seen how their sense of purpose. and come out stronger and more innovative for it . • While most teams identify with this pattern. • And their sense of character spoke volumes: If we really believe in the importance of this goal. then we’re not going to let these risks stop us. some teams have found the initial uncertainty to be energizing. increasing the confidence that they could move through the dark times of anxiety and uncertainty. and if we are going to walk our talk with our values. values and determination made them almost instantly ready to take • on the risks . and that it could become an anticipated part of their process . 165 . • This new awareness allowed their character to come forth.

To renew energy for taking on the next challenge 166 . To identify the new knowledge that is the “boon” to carry forth to the future 3. I named that task celebrating results to emphasize that this task had a threefold purpose: 1.• Jumping to the last task of the Creative Journey. To assess how well the goal was achieved 2.

• This task signified much more than post mortem sessions during or after a project . a true sense of completion was needed before people were mentally and emotionally ready to take on the next challenge . and the innovative challenges they faced . • As my clients so often taught me. 167 . I felt ready to see how it fit with the wide variety of clients I had. • With these insights and the Creative Journey in hand. • Repeated experiences of ending projects without this renewal of energy often led to burnout .

consider the following questions . and see what you can all learn from each other . Looking back on innovative projects you’ve worked on: 1. How did they impact your effectiveness in generating and implementing an innovative solution? 4. How do you currently complete your innovative projects? 168 . What have been the energetic or emotional ups and downs that you — and your teammates — experienced during those projects? 2. How did you deal with them when they occurred? 3. Use them to start an innovation conversation with your colleagues at work.Having an innovation conversation • • • To help clarify and integrate your insights from this chapter.

Chapter 5 Your Creative Journey • Every person. from clerical worker to executive. 169 . has personal stories about taking on challenges that they’ve never faced before. and then finding ways to meet them . • Every job presents such opportunities.

• Once met a woman named Mary Nelson who was President of Bethel New Life in West Side Chicago in the United States — an organization dedicated to helping rejuvenate housing in rundown communities . • They were an early pioneer in what has become known as the “sweat equity” approach to building housing for people who can’t afford down payments. 170 .

frustration over impediments to implementation. excitement for new ideas. self-doubt.• Like any of us with a difficult challenge. 171 . and the joy of celebration . fear of failing. Mary had to deal with the emotional downs and ups of the entire process — times of uncertainty and anxiety. • Interviewed her about what she had gone through in the early days of trying to actualize this innovative approach to low-income housing . adrenaline rushes.

we had lost 200 housing units per year in a square-mile area. Soon. • What were the risks? What was at stake? – We needed to do something about housing in our community. – Our church was a congregation of poor people. there would be no community left. and the governor’s office and bureaucrats said.” 172 .• What was your initial goal? – We wanted to create a low-income housing alternative to the welfare system. – In ten years. “It’s not possible.

a visible statement that the church cares. We have a sense that what we do. said. makes a difference. 173 . We’ve got to do it. – As Martin Luther King Jr. with God’s help.• What was it about you — your values. We know finite disappointment but we know infinite hope. your experience. your character — that gave you • the confidence that you could somehow do it? – People said. that this is our community. because this is going to be a visible symbol.

• What were the most important issues that would require some creative ideas to resolve? – Financing housing was a big issue – So was getting people involved – We also needed the right skills. and a “can do” attitude 174 .

What’s Your Story? • One of the easiest ways to understand how the Creative Journey works is to apply it to a real-life example of your own . • So. and you didn’t quite know where you were going to find it . regarding any of the four domains of innovation: – – – – Top-line / revenue producing innovation Mid-line / process improvement innovation Knowledge innovation Leadership innovation 175 . now it’s your turn… • Think back to a challenge you’ve faced at work for which you didn’t have a ready solution. • This challenge might be one of the situations you thought of back in Chapter 1.

What were the risks? What was at stake? 3. your character — gave you confidence you could somehow do it? 4. What were the most important issues that would require some creative ideas to resolve? 5. What did you do to implement those solutions? 8. What were some of the creative ideas/options you considered. your experience. What were the ideas/options you chose? 7. consider the following eight questions: 1.• What story can you tell? To relive your quest to find a solution. and what did you learn during the process? 176 . even if you didn’t use them? 6. What about you — your values. What was your initial goal? 2. What were the results.

• Reaffirm for yourselves how everyone has an innovation tale and everyone has the opportunity to contribute to innovation! 177 . • You might wish to ask your work colleagues this series of questions and have an “innovation story-telling” session .• These are. so you can engage in an innovation process together. and the key to having innovation conversations with your colleagues in any job or department. the basic questions for the Creative Journey . • They are your guide to the major tasks for innovation. of course.

we might be engaged in an innovation process. or quality improvement .Innovation in every day work processes • Quite often. • For example. 178 . • Note the parallels to the four stages of the Creative Journey model of the innovation process . without even realizing it . marketing. new product development. doing innovative work. • That is. our innovative endeavors share a common process. • Chart 22 documents how we might normally describe those work processes. or a customer service representative trying to resolve a customer complaint. whether we are a manager turning around an ailing company. consider the typical work of strategic planning.

Chart 22 — Comparing the Creative Journey Model to Other Work Processes 179 .

• And every time you embark on this Journey. you are going through a micro version of the character-building. you can begin to apply the Creative Journey as part of the art and discipline of being innovative.• The point is simple: no matter what job you have. transformative journey that is spoken of in all of the world’s epic literature . no matter what process you are engaged in or what your job description is. you are probably engaged in some way or another in an innovation process aimed at meeting some tangible work challenge or opportunity. 180 . • Recognizing that.

• They’re filled with questions to ask. there’s a personal exercise that will help you master the art of innovation to bolster each task you undertake . and stories to inspire. obstacles to side-step.Your personal purpose • The next four chapters are dedicated to helping you develop the discipline as well as the art of innovation as you go through the Creative Journey. • But before going there. 181 . techniques to use.

and how that fits into our innovative work . • For that.• What’s essential to the Creative Journey is that we put our minds. it helps to periodically step back and get a perspective on what we want to do with our lives. how and why we innovate. and what motivates you to make a difference 182 . • Let’s start with what moves you: what contribution you want to make with your life. hearts and souls into what.

• The triangle symbolizes how the questions become more and more foundational to your life purpose as you move from #1 to #6. you can state your personal purpose in six different ways . • There may be some overlap in your answers.• Using Chart 23. but start from the top and work down (I’ve given a sample answer to each question to help you get started on your own answers) . 183 .

Chart 23 — Personal Purpose Exercise 184 .

• Notice how your values are intertwined with and illumined by your sense of purpose .• Now examine the thread of continuity — the purpose — that runs through your answers and gives them unity. and see which statements you find most enduring across all of them . 185 . not-just-nicesounding personal purpose. • Honestly examine all your key intentions and activities at work. • That’s the basis of your real-time.

my purpose turns more and more spiritual. What can I contribute to people’s lives? I also have to spend my time trying to figure out how we’ll survive within this industry. But overall. you better feel really good about what you accomplished — and making a little profit here and there is probably not going to cut it. when he was head of Hewlett-Packard’s Circuit Technology Division . As time goes on. 186 .• A conversation with Fred Schwettman. He beautifully captured the importance of finding and expressing a sense of purpose through our work: – We had a discussion about values and beliefs in our staff meeting to really articulate what the personal purpose of each of us was — what each of us was doing to grow. when the time comes to check out. this environment is tremendously competitive.

• Your sense of personal purpose provides the meaning that will guide you in your innovative work. • It strengthens and unifies your values into a powerful energy that spurs you on and keeps you on track. • Your purpose and values are what can make you a champion of innovation whenever and wherever you choose.

Having an innovation conversation
• To help clarify and integrate your insights from this chapter, consider the following questions . Use them to start an innovation conversation with your colleagues at work, and see what you can all learn from each other: • How would you state your overall personal purpose? • Looking over your story using the eight questions
– What stands out as most unique, memorable — even remarkable — about how it unfolded? – What have you learned from this?

• How do the processes you currently use at work parallel an innovation process?


Part II Expanding Your Innovation Conversations


• Now is the time to begin developing more knowledge and skills in each stage of the Creative Journey .Your conversations about the innovation process will now center around eight core questions:



starting with the Challenge Stage. you will gain insights. • At the end. • As an art. 192 . knowledge and skills to assist you in taking and leading each stage and task in the Creative Journey. you will grow in the art and discipline of innovation. • As a discipline.• In the next four chapters. you’ll be more capable than ever to proactively initiate the innovative future you want to be part of. you will learn how to engage in innovation conversations as you work on collective challenges.

if not all. • You will find that many. • For example.• The Creative Journey provides a robust process you can apply in any job. with any challenge — whether you are conducting a twohour meeting. • You might try out a number of approaches to implementation before converging on the one that will work best . of the tasks have a kind of diverging.converging cycle. • You might generate a wide array of ideas and options before forming them into concepts and selecting the most promising ones to develop and decide on. • You might gather lots of facts and analyze lots of issues before identifying the top priority ones. you might come up with many different statements of your purpose or goal before converging on one that seems just right. 193 . or managing a two-year project .

• These chapters will discuss the stages and tasks one by one. in the organic unfolding of your Journey. you don’t miss an important task. make sure you go back and continue where you were so that in the end. • But remember. • You might end up jumping from one task to another and back again. this model is flexible. • If you do jump ahead in the sequence. since a book unfolds in a linear fashion. or taking them out of sequence. the stages and tasks often overlap. not linear. 194 .

we will speak in terms of your working in a team or group setting. a solitary effort. innovation is rarely. although you can use everything in these chapters when you work alone. • Therefore. 195 . with questions and examples that can stimulate your work together on a collective challenge . if ever.• As a final reminder before diving in to the art and discipline of each stage and task.

Chapter 6 Taking on a Challenge Together
• In the 1970s, Charles Schwab noticed that the stock brokers in Wall Street brokerage firms faced an inherent, potential conflict of interest in their work situation. • Their job was to advise their clients on buying and selling stocks, bonds and other investments using recommendations supplied by in-house analysts, and the brokers were paid commissions on the transactions their clients made as a result .

• What was the potential conflict of interest?
– On one hand, the brokers were supposed to represent their clients’ best interests; – on the other hand, if their clients’ best interests were not to buy or sell investment instruments, the brokers made no money.

• The temptation could be to induce clients to buy and sell, whether it was really in their best interest, or not, to do so.

• Schwab saw another aspect of this situation as well: the firms assumed that clients themselves did not know enough about what and when to buy and sell — that they needed the analysts’ recommendations . • From all of this reflection, Charles Schwab saw an ethical opportunity and a business opportunity.

• He decided to establish a brokerage firm with a new basis and the following business model:
– Serve customers who know what they want to invest in – Do not offer advice or recommendations; just transact orders as customers – Pay brokers/traders on salary only; no commissions – Do not employ stock/bond analysts (not needed); thereby reduce overhead costs and allow for discounted prices – Be strict in upholding the values of transparency, honesty and integrity – Avoid at all costs even the appearance of conflicts of interest


• Schwab’s “discount brokerage” firm was an innovation that revolutionized the financial industry. • The business model, and the business, was a hit in the marketplace, and Charles Schwab & Co. grew quickly. • One of the tests of the company’s values occurred in the mid-1980s, when mutual funds were becoming quite popular. • A person had to go to the specific mutual fund company to buy shares in their mutual funds; that meant having many different account statements, which made it hard to manage a portfolio .


at the • same cost as if they had transacted directly with the mutual fund companies. not the investors.. pay Schwab for each transaction. so how would Schwab make money on this service? • By having the mutual fund companies. • But this meant that the customers would not have to pay Schwab an extra transaction fee. 201 .• Charles Schwab had another breakthrough idea: offer a service whereby customers could buy and sell shares in a variety of mutual funds through Schwab & Co .

202 . thus recouping the fees they paid to Schwab .• Many fund companies saw this service as reasonable: it would broaden their market exposure and they could absorb the cost under that rationale. • Others. wanted to create a special class of shares with a higher management fee charged to the investors. however.

Schwab and his executives held firm to their values of high ethics.• Schwab would not agree to this scheme. 203 . • So. • They eventually named this service OneSource. when customers realized they were paying a higher management fee. it would appear to them to be a hidden cost — and accuse Schwab of being unethical. transparency and integrity. even at the expense of not signing up a big mutual fund company to participate in their new service. and it revolutionized the mutual fund market . believing that under this scenario.

The Challenge Stage of the Creative Journey 204 .

or opportunities we want to actualize. • They summon our courage and focus our energy. • A challenge is defined by a purpose or goal plus the meaningful risks involved. test our skills. • After all. • It is a time to call upon all our experiences.• Challenges are simply situations we want to change. and explore the unknown. 205 . a goal would not be a challenge if there weren’t something important at stake. be bold. • Challenges are provocative. • A challenge is a call to greatness. or if there was an obvious way to meet it. stimulating and sometimes risky. problems we want to solve.

one that was bigger than his business. • As he has told his managers time and again. • He assures them that by committing to that mission. 206 . to inspire every person in the country to believe in and invest in their own future. they prosper. and is. • That mission was. He embraced that challenge. • He also felt a higher mission. the company’s own success will grow naturally .• Charles Schwab saw an opportunity to take the ethical high ground and start a new industry at the same time . when people can trust in and plan for their future and their children’s future.

207 .

TASK 1: Establish the purpose or goal 208 .

they mean the same thing: your intention — what you wish to accomplish overall. • But purpose can imply a direction to head in. or you may want to use both .TASK 1: Establish the purpose or goal • The first task of your Creative Journey is to identify: What is our purpose or goal? • Why does this question include both of the concepts purpose and goal? • In one way. while goal can imply a destination to arrive at. • Depending on your situation you may want to use one word or the other. 209 .

• It defines what is unique about what you want to accomplish. • It should be clear enough to provide you with a direction to follow.• A statement of purpose or goal is powerful. whether it is a large task or a small one. • It helps you create a picture of how the world will be a little different once you have succeeded in your Creative Journey. yet without pre-determining the solution for achieving it. 210 .

• Or people might feel discouraged by the last time they tried to innovate and weren’t 100% successful. • Focus on the value of service: How can we best serve others as well as ourselves? 211 . where no one seems to care about what is going on.Example • There may be times when it isn’t easy to get started in defining your purpose or goal. • Or they might be thinking narrowly about what kind of goal to aim for. • You may encounter an atmosphere of apathy. • Under these conditions. encourage everyone to think about how your project has the potential to really make a difference in other people’s lives.

more sales and more profits. 212 . • That’s easy. • He replied. • He asked them to state a goal we could Journey on together. Great start… and could you restate that in terms of a customer benefit? • The group paused.• W. • He was asking them to focus on what they could give — what they could provide — rather than what they wanted to get. Miller was working with computer software salespeople in New York City — a rather aggressive group. stunned by the question and the task. one person said: How to make more money.

213 . • For them to define their goal as how to serve. focusing on the reciprocal nature of sustainable business growth and value-exchange. rather than what to get. • It also showed the power and value of giving as well as receiving. it opened up so much more creativity and energy than the first statement.• Eventually they came up with. How to provide customized solutions to individual customers at a mutually beneficial price.

and bring out the values and meaning that will energize • everyone in pursuing the goal: WHAT IS OUR PURPOSE OR GOAL? – What values are important in defining the goal? – What would make this an exciting adventure? – Who do I most want to serve? – What would make any hardship worthwhile? 214 .Asking questions to define the purpose or goal • The starting point question is simple: What is our purpose or goal? To make sure you have defined your goal in terms that are the most meaningful and motivating to everyone. some secondary questions often come in handy . • Here are a few you can use to broaden the discussion.

• Including the perspectives of each person’s personal purpose (from the last chapter) will also stimulate a great deal of discussion about your shared purpose or goal. • How can each of us fulfill our own purpose while working on this specific challenge together? 215 .

for which the competing statements might all be potential solutions. as the first creative options for meeting the goal. • In that case. 216 . you may find that members of your group have competing statements. • Then. bring back those competing ideas later on. look for a broader statement.• At times. one at a higher level of abstraction. and it’s difficult to come to a consensus on the purpose or goal.

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move on to the next task (assessing your risks) with the intention of coming back to refine your goal statement later. • If you find your group getting bogged down. OK for now statement of your purpose to get you going on your Journey. agree to a simple. overlapping process. • Then. • You can always return to this task and clarify your purpose as your perspective gets clearer . 218 . • Remember. the Creative Journey is a flexible. sometimes it might be hard to pin down and craft a statement of your purpose or goal.• Also.

One technique: The Right Scope for the Goal
• As you start on your Creative Journey, realize that you are taking on the responsibility for actually changing things. • How big of a change do you want to take on? What fits with your level of empowerment to influence or make a change? • A purpose or goal becomes frustrating if it is defined in terms that are too narrow to really accomplish what people are aiming for, or if it is so broad you don’t have the power or influence to actually achieve it.

• So, one technique you can use to make sure the scope of your goal is just right — not too narrow and not too broad — is shown in Chart 24. • Once you’ve taken this step, review the different statements. • Choose the scope that best matches your power to implement an innovative solution and your willingness to make a difference.

Chart 24 — Right Scope for the Goal


A case in point
• As an example, imagine that your company has gone through downsizing and a reorganization to enable it to respond faster to changes in customer needs and market demands. • Is this too hard to imagine? • You’re part of a team with representatives from all over the organization, with the goal of figuring out how to improve morale . • How do you begin tackling this challenge?

• Your first meeting may be devoted solely to defining your challenge. • Begin with any first definition of your goal from anyone. • As a group, work with expanding or narrowing the scope until everyone agrees it is both big enough to be meaningful, yet small and manageable enough to empower your group to achieve it.

Key Question: What is our purpose or goal? • Formulate an initial goal statement: – To ensure positive morale in our new work environment after a difficult reorganization • To broaden your goal statement. ask Why do we want to do this? and restate your initial goal in broader terms: – To create a work environment where employees are content and loyal to the company 224 .

and formulate your final goal statement: – To ensure positive morale and high satisfaction among employees and management in our new work environment 225 . ask What is a key barrier to achieving this? and restate your initial goal in narrower terms: – To ensure clear communication and high satisfaction among employees • Choose a scope for your goal that your group is both motivated and empowered to achieve.• To narrow your goal statement.

• What the Creative Journey requires from a purpose or goal statement is everyone’s intention and commitment to achieve it. • An affirmation that often signals your team’s full commitment is the feeling that. 226 .Checkpoint • Every stage and task of the innovation process has a checkpoint to ensure that you’ve done it well. We can make a difference! • So here’s the first set of checkpoint questions to ask when you’re leading a group through a collective Creative Journey .

poll the group . 227 . often conduct a little test: ask them to rate their enthusiasm for working on that goal. on a 1-5 scale. where 1 means little or no enthusiasm at all. and 5 means a great deal of enthusiasm. Then.Checkpoint: Commitment to achieving the goal • Have we defined our challenge based on our personal values? • Do we feel an inner motivation to stretch and serve others? • After a group feels like they have consensus on how they would state their purpose or goal.

ask that person to offer a more motivating version of the goal. • Keep working on the goal statement until everyone is at a 4 or 5. while encouraging the group to listen closely. 228 . • Then and only then. we are assured that the group is ready to move on to the next task.• If any single person rates their enthusiasm at a 3 or lower.

the more likely a fear of failure will arise. the biggest risk you can take in a fast changing world is to avoid change yourself.TASK 2: Assess the risks • The second task of the Creative Journey is to assess the risks entailed. once a commitment has been made to a goal. or a reaction to back off and not “rock the boat” — to play it safe and stick with what already exists rather than to risk trying something new . • The more important the goal. however. 229 . – What risks do we face? – What’s at stake? • Most often. the first thoughts that pop up in our minds are all the risks. • Ironically.

or a championship game. • As a simple example: When I’ve spoken at conferences. I’ve often asked audiences which they would prefer to attend — a sports match where one team was so superior that there was no suspense about who would win. • Yet I’ve found it’s equally natural to prefer and even to seek those kinds of situations. where both teams were highly talented and the outcome might not be decided until the final minute .• Many people believe there is a natural resistance to uncertainty and the chance of failure. 230 .

• Get them on the table. Focus on the value of well-being: How might the wellbeing of our stakeholders and us be at risk? • This way. so you can all see what they are . we lose interest .• Invariably. • When you’re facing a new challenge. the vast majority of people choose the latter . it helps to name the uncertainty. The point • is that most of us actually like some level of uncertainty and suspense — and if the stakes are not high enough. and you have a chance to deal with them collectively 231 . the risks and the fears. no one is alone with their anxieties.

the art and discipline of innovation can draw many lessons from mountain climbing. • In fact. John Hunt faced as he and his team of men started up its steep slopes. 232 .028 feet. people around the world thought that it was virtually impossible to climb to the peak of Mount Everest — Chomolungma as it was known locally — the highest place on earth at 29. • They had no maps to follow. and couldn’t predict the weather. taking on a new challenge can feel like climbing a tall mountain. • They didn’t even know exactly how far they had to go. • Prior to 1953.Example • For many people. • Imagine the uncertainty and risks that Col . • Injury or death was always a possibility — other people before them had suffered those fates .

and experience to carry them through to their goal — together .• Hunt and his entire team of experienced climbers stayed focused on each other’s wellbeing. innovative skills. and then rely on their common purpose. • They knew that the best way to get to the top was to pay close attention to their environment. stay tuned to the risks they were taking. 233 .

• May 29. • They embodied the spirit of the entire team: – The real point of mountain climbing. On that day. Neither went in for unnecessary bravado. Edmund Hillary. is that it voluntarily tests the human spirit against the fiercest odds. Hunt’s team . stood on the top of the world for the first time. Tenzing Norgay. as of most hard sports. and a Nepalese Sherpa guide. Hillary and Tenzing were two cheerful and courageous fellows doing what they liked doing. 1953 was the culminating moment for Col . 234 . they were considerate members of a team. and did best. a New Zealand beekeeper.

What risks do we face? • But here are some other questions you can use to broaden the discussion and bring out the values and meaning that will clarify what you’re dealing with: WHAT RISKS DO WE FACE? 235 . think about what is at stake — what could be the consequences if you fail to meet the goal. or even if you succeed? • Those consequences could be either positive or negative.Asking questions to assess the risks • In this second task in the Challenge stage. • The main question here is simple.

WHAT RISKS DO WE FACE? • What might be at odds with our values? • What’s at stake in this situation — what could be the effects of either success or failure? • What do we fear might happen in this situation? • What biases might keep us from seeing the risks objectively? 236 .

237 . given the stresses that the innovation process can bring on . but to say we’re anxious or afraid is not often culturally acceptable. • In acknowledging that feelings of anxiety or fear are normal.• We may easily define the risks. the issue is what to do with those feelings: – Do we let them stop us? – Do we try to suppress them? • Neither one of these options really works.

they come back later to haunt the entire innovation process. 238 .• We’ve found that if these issues are not put on the table openly at this point. underneath. they say that the idea is no good. • On the surface. it’s because a risk or fear has not been put out into the open in defining the challenge . • They surface as hidden agendas when people begin killing ideas and options right and left.

and trust the innovation process to address them in a constructive way. rather than the barriers to them! 239 . • They become the very stimulus for more innovative solutions.• What works best is to bring the fears and anxieties into the light. • When the risks are voiced in this way. then they become “grist for the mill” in prioritizing key issues and generating options for resolving them.

240 . you might want to conduct a knowledge-gap analysis. including techniques for competitive analysis and vulnerability analysis.One technique: KnowledgeDifferentiation Analysis • Businesses and organizations use a great many tools and techniques to assess risk. if your goal is to differentiate your organization from others in your field. fill in the key knowledge that is pertinent to achieving your purpose or goal . • The choice of technique depends on your goal. • For example. especially in this information age. • Using the grid in Chart 25.

Chart 25 — Knowledge-Gap Analysis 241 .

Chart 26 — Assessing the Knowledge 242 .

• You can use this analysis to determine what kind of knowledge-based risks you face: – What knowledge do we need to gain that others already know. create (in Box 4) for future differentiation? 243 . or others. so we can be in the game? – What knowledge do we have (in Box 3) to leverage for our advantage? – What new knowledge might we.

• Imagine that you and your group bring to light all the risks related to your goal. • Your list might include: Key Question: What risks do we face? 244 . and what’s really at stake for your stakeholders.A case in point • Come back to our hypothetical situation. where you’re part of a team trying to figure out how to improve morale and satisfaction in your company.

as they seek new jobs elsewhere 245 .Key Question: What risks do we face? • A breakdown in communications between management and employees • A lack of work coordination due to changing jobs and moving managers around • Increasing feelings of job insecurity: “When is the next layoff? Will I lose my job?” • Interference with good productivity • Losing the best of our remaining talent pool.

We know the risks — and we’ll keep going! • So.Checkpoint • The checkpoint for this task in the Creative Journey is that your team is fully aware of the risks involved and what’s at stake for failure or success. two questions for your second checkpoint are: • Checkpoint: Conscious risk-taking – Are we aware of the potential risks and benefits? – Are we conscious of any blocks to taking appropriate risk? 246 . • An indicator of this awareness is the assurance that.

consider the following questions. What are the most memorable challenges you have worked on? What made them memorable? 2. and see what you can all learn from each other . what kinds of risks do you. 1. • Use them to start an innovation conversation with your colleagues at work. How does it feel to be facing those risks? 247 . How does your personal purpose and your values shape the kinds of goals you most like to work on? 3. your company. and your clients face? 4.Having an innovation conversation • To help clarify and integrate your insights from this chapter. When it comes to your current projects.

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