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 .

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

• 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.Edgar Mitchell: • The idea of going to the moon was virtually an irresistible challenge. 9 .

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

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

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. • I recognized that our scientific description of the way the universe is put together was at best incomplete and perhaps in some ways inaccurate.

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

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

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

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

• 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 . As an art. • As a discipline. and can be learned and practiced . 22 .The Art and Discipline of Innovation • Innovation is both an art and a discipline . it has processes and principles that are actually quite simple.

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

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

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.

and leadership practices . knowledge management. That’s the discipline . organization design. – 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. business models. That’s the art. – 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 . if given the right tools .• Two principles have emerged from this movement essential to the field of innovation . but in marketing and sales. 26 .

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

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

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

aligning and attuning your work together requires the art of good conversation . when we often come from so many functions and specialties? 30 . whether the scope of your innovative work is small or large.• So. • But what should that conversation be about? • And how do we speak the same language. 31 .theinnovationprocess.

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

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

• Today. 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 . but a cultural norm as well . ideas and intelligence. • To facilitate the open sharing of information. and avoid the kind of politics and turf wars so common in corporate life. 34 . Dell Inc.• Dell Direct became not only the theme of the business model. leaders in the company were actively encouraged to deal directly with each other.

35 .

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 . and a tricky one . It’s tricky because of the word exactly .

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

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

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

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

We do not limit our view of processes and products to those that are related to goods sold to consumers. 41 . • But that’s not all to the innovation scene . 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. • For example. we also include better ways of doing our jobs and new tools that make us more productive. – Instead.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 . 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.

but created. 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.• 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 . Knowledge is generated anew from connections that weren’t there before. where information is not just accumulated or stored. 42 .

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

and each domain has its own specific aim . Mid-Line. 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 names these four domains as Top-Line.

Chart 1 — Domains and Aims of Innovation 45 .

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

providing better training of employees. establishing more efficient techniques of manufacture. speedier consumer service and complaint handling. finding new markets and consumer needs. distribution and sales. finding cheaper sources of materials. more reliable warranty coverage and repair. attentiongetting advertising. 47 .• 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.

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

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

Chart 2 — Sustainable Innovation 50 .

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

it can all depend on one’s job perspective. • But from the perspective of actually selling an automobile. • For example.• 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. 52 . when electronic fuel injection (EFI) replaced carburetors in automobile engines. the engineers could very well consider it a major breakthrough in providing fuel efficiently and effectively.

• 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. 53 . situations can arise in all four of the quadrants in Chart 3. • In fact.

Chart 3 — Degrees of Change with Innovations 54 .

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

low impact (upper left quadrant) is the Simplified Keyboard. • Still. and Linux . patented in 1936 by Dr . Microsoft Windows. given the dominant preference market for the QWERTY keyboard .• 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. 56 . an educational psychologist and professor at the University of Washington . August Dvorak. • 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). and is included with major operating systems such as Mac OS X. the impact of this innovation is extremely low.

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

• The innovation cycle contains differing degrees of change as well as differing degrees of impact.• 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 . to which everyone can contribute 58 .

did the tree make any sound? • Here the question is.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. is it an innovation? 59 . 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. If something new is produced and no one is affected by it.

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

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. 61 .• On the other hand.

it is an innovation. a pioneer and expert in identifying the patterns of product innovations as they diffuse through society.• 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 . 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. The perceived newness of the idea for the individual determines his or her reaction to it. 62 . • Everett Rogers. If the idea seems new to the individual.

” or some other earth-shattering idea brought to life . 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.• While these philosophical questions can be interesting to debate. • So long as it’s new for you and your organization. somewhere. • It just has to be a new concept that gets implemented and creates some benefit for someone. • That’s what it takes for you to say that you’ve been innovative . it’s an innovation for you. 63 .

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

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

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

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

• First. 68 . Frank found that Those teams that stood out had leaders and managers who treated their customers as they themselves wanted to be treated. • 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 .

because they were always what they were. every single hour of the day. and didn’t have to pretend to be something that they weren’t. or know something they didn’t know . He said they were authentic.• Second. 69 . 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.

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. in the ultimate hightech world. was the presence of two sincerely-practiced values: caring and authenticity .

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

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

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

say and do .• The word value comes from the Latin verb valere. of importance) to us in what we think. Values shape what is meaningful and motivating for us . 74 .e .. values are feelings and convictions regarding what is of strong worth (i . 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. • People who are aware of their own values will naturally strive to find a way to express them through their work . dedication and commitment it takes to innovate 75 .• Personal values have long been underappreciated as a driver of innovation .

• 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 . 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 . H . • In their research.

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

Chart 4 — Values and Commitment 78 .

• 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 .• Of course. the ideal is an alignment between company values and personal values. 79 . • It seems like every organization today has a set of values it wants its employees to embrace and practice.

80 . 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). bureaucratic and stressful to work in. Organizations that don’t have this alignment tend to be more inward looking. They may be financially successful. the organization is more successful and more focused on customer satisfaction and community service. but find it difficult to hire and keep self-actualized individuals and talented people.• According to former World Bank Values Coordinator Richard Barrett.

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

• 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 . practical. 82 . values are the key. bold or exciting results with your innovative work. • And they help organizations foster a positive culture. • They help teams to work collaboratively toward goals based on common priorities.

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 the accelerating effects of global warming . we have an electronic global network. • On the other hand. 83 . • On one hand.

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

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

suppliers. shareholders. society. we’ve focused on the domains and aims of innovation from the point of view of the organization that is producing them. – But what about the people outside the organization — such as customers. 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 .• This point of view raises some provocative questions for every person and organization: Thus far.

• Floy Aguenza is its President. both are possible at the same time . when values are the driver of innovation. • An example of this dual choice for supporting “fellow villagers” while growing a successful enterprise comes from the Planters Development Bank in the Philippines .• 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 .

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

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

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

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

– We are the only development bank that is partly owned by multi-laterals such as the World Bank and the Asian Development Bank (ADB). 92 . 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).

shareholders. suppliers and employees. 93 . It’s all a question of values . • It’s clear that we can target our innovative efforts to contribute to the well-being of others — customers. society as a whole. Businesses must live by the right values. If we all do something. not just strive to be number one while sacrificing all else. we can all gain.• 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. and the environment — even as our own organization thrives .

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

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

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

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

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

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

What personal values do you hold as most important in your own work? 2. When you add the dimension of values. How are those personal values reflected in what and how you innovate? 3. and see what you can all learn from each other . consider the following questions . how does it change your definition of innovation from Chapter 1? 100 . Use them to start an innovation conversation with your colleagues at work. Consider: 1. 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.

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. 1961.Chapter 3 The Process of Innovation • On May 25. just 43 days after cosmonaut Yuri Gagarin of the Soviet Union became the first human in space. which in many ways may hold the key to our future on earth.” 103 . President John F.S. U.

104 .F. 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. of landing a man on the moon and returning him safely to the earth. and none will be so difficult or expensive to accomplish. or more important for the longrange exploration of space. Kennedy: • I believe that this nation should commit itself to achieving the goal. There is no sense in agreeing or desiring that the United States take an affirmative position in outer space. before this decade is out. No single space project in this period will be more impressive to mankind. unless we are prepared to do the work and bear the burdens to make it successful.J.

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

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

called a phase-review-process. • One tool NASA used was what has become known as a first generation model of the product or technology innovation process. 107 .The NASA model • NASA took up the charge to foster a degree of dedication. organization and discipline that had not existed before . 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 . as shown in Chart 5 . • The NASA model showed development in sequential phases. • It was used as a management tool to systematize and control work with contractors and suppliers on space projects .

Chart 5 — Phase-Review-Process Model 108 .

109 .

110 .

• 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. 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 . the so-called father of the study of innovation. technologypush or science-push model .• This phase-review model drew from the 1930s pioneering of Joseph Schumpeter. 111 .

Chart 6 — Technology Push/Demand Pull Model 112 .

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

114 .

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

Chart 7 — Stage-Gate-Process Model 116 .

117 .

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

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

Ulrich Normative Process 120 .

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

Chart 9 — Network Model 122 .

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

Chart 10 — Technology Model 124 .

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

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

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

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

Chart 12 — Values Analysis Model 129 .

130 . • 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.Innovation process models for knowledge innovation • Another domain of innovation is knowledge. as shown in Chart 13 . captured concepts).

Chart 13 — Knowledge Creation Model 131 .

132 .

133 .

• The resulting knowledge creation process has five key steps. Enlarging individual knowledge Sharing tacit knowledge Creating concepts Justifying concepts Networking knowledge 134 . 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. 3. 5. 2. 4.

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

136 . • Each of the eight components or phases interacts with the other phases. as shown in Chart 14 . 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.

Chart 14 — Organization Development Model 137 .

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

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

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

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

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

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

• 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. 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 . • 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. 144 .

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

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

• Over the first two days of the innovation search. etc. his averages. they generated hundreds of ideas and clustered them in a variety of ways . – A computer system that analyzes a bowler’s performance and recommends ways to improve technique. • As a sampling. depending on what mistakes were being made 147 . and how he did on different pin combinations. 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.

etc.– Feedback on speed. (changing scoring methods) 148 . and so on. 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. accuracy.

and so on. accuracy. 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 . it came time to narrow down the ideas and select the most promising ones for technical and market feasibility studies .• Then. Certain ideas made it. 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.

• Finally. they began to install and do final testing of new products in company-owned bowling centers within a few hundred miles of their headquarters . 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 . so they could determine if they needed to speed up or slow down their ball delivery to hit the pins better .

000 installed worldwide.• One key to the renewal of Brunswick’s bowling business was the new GS pinsetter. is the #1 selling new pinsetter in the world. the GS-X. with more than 10. 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 latest generation of pinsetter. • Today. • The side-gulley idea (for people new to bowling) has turned into their Pinball Wizard bumper bowling system 152 .

• 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.The beginning of a new model • This Brunswick project occurred when I was just beginning to formulate my version • of the innovation process . • What could I invent that might contribute to the field of innovation? 153 . and my professional curiosity got the best of me .

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

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

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

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

Chart 19 — Creative Journey Model 158 .

The Creative Solutions — generating ideas and then developing and deciding on the best solution 4. The Challenge — deciding what you want to accomplish and acknowledging the risks along your path 2.• 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 Completion — implementing your solution and celebrating what you accomplished and learned along the way 159 . through four distinct stages: 1. The Focus — tapping into your source of confidence and prioritizing issues you need to resolve 3.

3. celebrate results. and then only as monitoring or evaluating results 160 . 4. A third task. 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. • Looking at Chart 20. you can see: 1. then compared it with the models studied from various domains . 2. 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) .• Upon completing the development of the Creative Journey model.

• 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 . involving a variety of tools and techniques . 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. • For example. • However. IT. the task of implementation for a new product could include the sub-tasksfor engineering. manufacturing. and I began to delve more deeply into their significance for the innovation process 161 .

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

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

Chart 21 — Confidence Curve 164 .

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

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

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

Having an innovation conversation • • • To help clarify and integrate your insights from this chapter. 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. Looking back on innovative projects you’ve worked on: 1. How did they impact your effectiveness in generating and implementing an innovative solution? 4. and see what you can all learn from each other . How do you currently complete your innovative projects? 168 . consider the following questions . Use them to start an innovation conversation with your colleagues at work.

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

• 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 . 170 . • 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.

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

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

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

and a “can do” attitude 174 .• 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.

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. regarding any of the four domains of innovation: – – – – Top-line / revenue producing innovation Mid-line / process improvement innovation Knowledge innovation Leadership innovation 175 . and you didn’t quite know where you were going to find it . 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 some of the creative ideas/options you considered.• What story can you tell? To relive your quest to find a solution. What were the most important issues that would require some creative ideas to resolve? 5. your character — gave you confidence you could somehow do it? 4. consider the following eight questions: 1. What was your initial goal? 2. What about you — your values. What were the results. and what did you learn during the process? 176 . What did you do to implement those solutions? 8. What were the ideas/options you chose? 7. even if you didn’t use them? 6. your experience. What were the risks? What was at stake? 3.

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

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

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

transformative journey that is spoken of in all of the world’s epic literature . 180 . • And every time you embark on this Journey. • Recognizing that. you are probably engaged in some way or another in an innovation process aimed at meeting some tangible work challenge or opportunity.• The point is simple: no matter what job you have. 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. no matter what process you are engaged in or what your job description is.

• They’re filled with questions to ask. and stories to inspire. techniques to use. there’s a personal exercise that will help you master the art of innovation to bolster each task you undertake .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. obstacles to side-step. 181 . • But before going there.

• What’s essential to the Creative Journey is that we put our minds. • For that. hearts and souls into what. 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 how that fits into our innovative work . • Let’s start with what moves you: what contribution you want to make with your life. and what motivates you to make a difference 182 .

• Using Chart 23. you can state your personal purpose in six different ways . • The triangle symbolizes how the questions become more and more foundational to your life purpose as you move from #1 to #6. 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 . • There may be some overlap in your answers.

Chart 23 — Personal Purpose Exercise 184 .

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

But overall. this environment is tremendously competitive. 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. 186 . my purpose turns more and more spiritual. when the time comes to check out. As time goes on. when he was head of Hewlett-Packard’s Circuit Technology Division .• A conversation with Fred Schwettman. you better feel really good about what you accomplished — and making a little profit here and there is probably not going to cut it. 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.

• 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:



• In the next four chapters. • As a discipline. • At the end. you will grow in the art and discipline of innovation. 192 . knowledge and skills to assist you in taking and leading each stage and task in the Creative Journey. • As an art. you will gain insights. starting with the Challenge Stage. 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.

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

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

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

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 .


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.• 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 . pay Schwab for each transaction. not the investors.. at the • same cost as if they had transacted directly with the mutual fund companies. 201 .

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

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

The Challenge Stage of the Creative Journey 204 .

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

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

207 .

TASK 1: Establish the purpose or goal 208 .

209 . they mean the same thing: your intention — what you wish to accomplish overall. • Depending on your situation you may want to use one word or the other. while goal can imply a destination to arrive at. • 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.

210 . • It should be clear enough to provide you with a direction to follow. • It defines what is unique about what you want to accomplish.• A statement of purpose or goal is powerful. yet without pre-determining the solution for achieving it. 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.

• Under these conditions. • 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. • You may encounter an atmosphere of apathy. encourage everyone to think about how your project has the potential to really make a difference in other people’s lives. • Or they might be thinking narrowly about what kind of goal to aim for.

• That’s easy. Great start… and could you restate that in terms of a customer benefit? • The group paused. • He replied. 212 . more sales and more profits. one person said: How to make more money. • 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. • He asked them to state a goal we could Journey on together. stunned by the question and the task.• W.

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

• Here are a few you can use to broaden the discussion.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 . 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 .

• How can each of us fulfill our own purpose while working on this specific challenge together? 215 .• 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.

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

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

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 .• To narrow your goal statement. 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.

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 . 226 . • An affirmation that often signals your team’s full commitment is the feeling that. • What the Creative Journey requires from a purpose or goal statement is everyone’s intention and commitment to achieve it.

227 . poll the group . often conduct a little test: ask them to rate their enthusiasm for working on that goal. where 1 means little or no enthusiasm at all. Then. and 5 means a great deal of enthusiasm. on a 1-5 scale.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.

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

TASK 2: Assess the risks • The second task of the Creative Journey is to assess the risks entailed. 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 . once a commitment has been made to a goal. however. the biggest risk you can take in a fast changing world is to avoid change yourself. – What risks do we face? – What’s at stake? • Most often. • Ironically. 229 . the more likely a fear of failure will arise. the first thoughts that pop up in our minds are all the risks. • The more important the goal.

or a championship game. 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. • As a simple example: When I’ve spoken at conferences. • Yet I’ve found it’s equally natural to prefer and even to seek those kinds of situations. 230 . 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.

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

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

stay tuned to the risks they were taking. • They knew that the best way to get to the top was to pay close attention to their environment. innovative skills. and then rely on their common purpose. 233 . 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.

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

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. 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 . • The main question here is simple. think about what is at stake — what could be the consequences if you fail to meet the goal.

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 .

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. given the stresses that the innovation process can bring on .• We may easily define the risks. 237 . but to say we’re anxious or afraid is not often culturally acceptable. • In acknowledging that feelings of anxiety or fear are normal.

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

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

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

Chart 25 — Knowledge-Gap Analysis 241 .

Chart 26 — Assessing the Knowledge 242 .

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. or others.• 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 .

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

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. as they seek new jobs elsewhere 245 .

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. We know the risks — and we’ll keep going! • So.

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

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