Archive for category replication
What’s the Best Medium for Spreading Your Great Idea?
Posted by Tim in connect, innovation strategy, replication on 1 July 2010
I had a very invigorating meeting with Johnnie Moore while I was in London. We discussed a wide variety of interesting things, but there is one idea in particular that has stuck with me – that it is very important to develop the skill of choosing the best way to communicate your ideas.
Here’s the issue – when we have a new idea (and it’s one that doesn’t need to be made into something physical), we have a wide range of methods available for spreading it – we can write about it in 140 characters on twitter or 200-2000 words in a blog post, we can write it as an article for a magazine, or an e-zine, or an academic journal, we can make it into a e-book, or we can write a regular book. And those are just some of the written options – there are also video, public speeches, lectures, webinars, and many, many other choices.
That’s a lot of options, and many of us only consider 1 or 2 of them every time we have a new idea. The result is that we often end up framing our idea in a way that fits a medium that isn’t ideal, or putting it in front of an audience that doesn’t care about it. These are both huge errors if we are trying to get the idea to spread.
Picking the best medium for our great ideas is a critical 21st century skill – we all need to work on getting better at this.
This idea is obviously not new – this is part of what Marshall McLuhan was getting at with his ‘the medium is the message’ idea. The medium that we choose for our idea in large part determines who will pay attention to it, and how it will be interpreted.
This idea has many practical implications. The week after I spoke with Johnnie, I was fortunate enough to spend a bunch of time with Neil Kay working on getting a new research project up and going. He has just posted a paper on his website talking about two articles that he has had available for download there for the past couple of years. One article argues that Coase misapplied marginal analysis in his highly influential work on the theory of the firm, and the second criticises the applications of game theory in economics.
Neil has been working on getting these into journals for a while now. He has written quite a few books and had many academic papers published, so this is both a natural medium in which to work for him, and also something that he knows a fair bit about. But neither paper has been accepted yet – in part due to their controversial points (why journal editors might be hesitant to publish controversial papers is another conversation entirely).
Now normally, failing to get a paper published is very frustrating for an academic. And Neil was frustrated. Until he noticed that both papers are getting downloaded many times a day! New he’s thinking about the readers of these articles:
These already number in the thousands for the Coase paper and the numbers are still on a upward trend – and what is the expected readership for the average published academic paper? There are various estimates I have seen for this last question, and I can tell you categorically the numbers are never in the thousands.
If I do publish these papers eventually, then the standard editorial instruction will be to remove them from my website and also remove the increasing visibilty and implicit recogntion of these papers. Will I do this? What do you think?.
I plan for these papers to stay on this website indefinitely. And as for protection of my intellectual property – well, I think ventilation of the arguments are more important, and in any case many more people than I could have hoped from conventional academic distribution are already familiar with these papers, the ideas, and who authored them – that will do for me, though of course I can and will also archive them on a Working Paper site.
The conclusion that he reaches is that the papers might actually be better off not being published in academic journals. This might not seem shocking, but in many ways it is.
With so many different methods available for getting our ideas to spread, we need to be skilled at using multiple channels. If we only consider one or two methods, then we greatly reduce our chances of getting our ideas in front of the people that are most likely to be interested in them, and those who are most likely to act on them. If we want to have an impact, we have to be able to find these two groups of people.
Here are a few steps to take when you have a great new idea:
- Decide what impact you want it to have. Do you want people to talk about it? Or pay you to tell them about it? Or tell their friends about it? There are many different paths to impact – how will you measure impact for your idea?
- Who needs to hear about your idea to achieve this impact? Academics, businesspeople, customers, everyone? Figure out who needs to know about your idea if you are going to have the impact you desire.
- Think about how to best reach this group. There are an almost infinite number of media available now – which ones are best the audience you are trying to reach?
- These days, you probably need to use multiple routes. My impact here has increased substantially once I combined the blog with twitter and public speaking. Multiple routes to reaching the people with whom I want to be talking. Decide which routes will work best for your new idea.
- Finally, consider a new medium. Is there some method for reaching people that you’ve been curious about, but haven’t tried? Is there a medium that is unusual to use in your field? Try thinking about alternate ways to spread your ideas. Remember Neil’s papers – they seem to be doing very well outside of the normal academic media.
We need to be good at getting our ideas to spread. There are many different ways to do this, and many different media we can use. Matching media to our messages is an essential skill these days – if we’re good at it, we’ll be better at spreading our ideas. Diffusing ideas is a critical step in the innovation process – consequently, learning to match our ideas up with the most appropriate media is also critical.
Innovation as an Evolutionary Process
Posted by Tim in innovation strategy, replication, selection, variety on 13 June 2010
Here’s another clip from the video series that we did a couple of years ago for our Innovation Leadership course. This time it’s John talking about how innovation is an evolutionary process:
Generic evolutionary processes have three parts – generation of variety, selection, and replication. This maps on to the three steps in the innovation value chain. The Innovation Value Chain also has three steps – idea generation, idea selection and execution, and idea diffusion. The connections between the two models should be fairly apparent!
Innovation as evolution has some interesting implications, including:
- The ideas that spread are often not optimal solutions to problems, they simply happen to be the best solutions currently available. In other words, our innovations just have to be good enough, not perfect.
- Consequently, the idea that we’re not looking for a perfect execution of our new ideas is a strong argument in favour of taking a build, launch, tweak approach to getting our new ideas out there. We’re most likely to get to the best solutions to the problems we are interested in through an iterative process, rather than through pure development.
- This leads to the last point, which is that the evolution of our great ideas is built on collaborative networks. The sooner we can enlist the help of our network (customers, partners, suppliers, etc.), the more likely we are to come up with the best version of our great new idea.
The economy is an evolving system. Thinking of it in this way gives us some important insights into how to best manage innovation.
Innovation: The War of Ideas
Posted by Tim in book riffs, business models, replication on 27 April 2010
Innovations are ideas. Even if your innovation is a new gizmo, it is essentially an idea. Once you have a great idea (by making a new connection), you have to figure out how to get it to work, and once you’ve done that, you have to figure out how to get the idea to spread. The last part is often the tough part. Consider what Machievelli had to say about it about 500 years ago in The Prince:
There is nothing more difficult to plan, more doubtful of success, nor more dangerous to manage than the creation of a new order of things… Whenever his enemies have the ability to attack the innovator, they do with the passion of partisans, while the others defend him sluggishly, so that the innovator and his party alike are vulnerable.
Machievelli was talking about innovative political ideas, which is why he refers to “the innovator and his party”, but the same idea holds in economic innovation. Innovation is tough – and new ideas get attacked. This leads to a common mistake that smart people make – they often think that a great new idea will sell itself. In the fantastic new book Seeing Further: The Story of Science and the Royal Society edited by Bill Bryson, Rebecca Newberger Goldstein shows that even Galileo made this mistake:
Galileo, for his part, could be high-handed in regard to experimentation, writing, for example that it was only the need to convince his ignorant opponents that made him resort to ‘a variety of experiments, though, to satisfy his own mind alone he had never felt it necessary to make any’. As [historian of science E.A. Burtt] has written, ‘If this was seriously meant, it was extremely important for the advance of science that Galileo had strong opponents…’
In this case, experiments were critically important because those are what demonstrate that Galileo’s theories were right – that they worked when you applied them out in the world. It’s the same with innovation – we need to show that our ideas work. And then we need to get them to spread, which usually means defeating the opponents of our ideas.
Machievelli’s enemies are Galileo’s opponents. Whenever we come up with great ideas of our own, we have enemies and opponents too. One way or another, our innovative ideas have to displace ideas that are already out there, to which people often have strong attachments. To get our ideas to spread, we have to break these attachments.
This is a large part of why business model innovation is so attractive. When we innovate our business models, we are creating new space, where the competing ideas aren’t as strongly embedded. The drawback to this is that it is harder to prove to people that the ideas work, because there are fewer references points. The advantage is that there are also fewer pre-existing connections that have to be broken.
Getting ideas to spread is challenging. It’s a mistake to think like Galileo and to believe that it’s simply enough to have the great ideas in the first place. We have to show that they work, and then we have to enter the battle that Machievelli describes. This is often hard, because many innovators are ideas people. But it’s much more satisfying to see our ideas adopted. So don’t just have the great ideas, show that they work, and get them to spread.
How You Define a Problem Determines if You Can Solve It
Posted by Tim in connect, innovation, replication on 1 April 2010
How we define things is incredibly important. I’ve been reminded of this almost constantly this week. Here are some examples:
- I was talking with a friend of mine over the weekend about using social media to improve the flow of ideas within an organisation. She is a high-ranking manager in a very large organisation, and she was curious to hear about this blog, and about how John and I have used it as a communication tool. She is thinking about implementing some kind of strategy to improve communication across the silos that are deeply entrenched within her organisation. When we started talking about the various tools that are available to help – wikis, blogs, message boards, instant messaging, and so on – I reminded her that if her problem is defined as a technological one, it’s unlikely that she’ll be able to solve it. When silos are approached as an IT problem, you get a lot of tools put in, but no real change in communication patterns. You must define silo problems as communication issues if you want to improve things. The way that you define this problem can determine your success in solving it before you even start.
- Michael Schrage just wrote a post about how many different types of failure there are when we are trying to innovate. He argues that there are many different types of failure, and that we have to be more clear about what we are talking about.
The underlying distinctions between failures typically overwhelm their similarities. …
What kinds of failure make the best or most useful resources for your organization? Which failures matter most for the future? …
When do you declare an “underperformer” a “failure?” Is it determined by semantics, the marketplace, or your CFO? In my experience, managers talk rather differently about “learning from failure” than they do “boosting underachievers.” Indeed, a Google search for “learning from underperformers” got no results. Needless to say, underperformance is a form of failure. Which brings the end of this post right back to its beginning: What are the kinds of failures that matter most to you and your organization? It’s ironic to the point of perverse that our failure to define failure can undermine our ability to learn from it.
So how we define failure determines whether or not we can learn from it.
- I’ve argued previously that one of the reasons that people have problems with the idea of innovation is that it is intentionally broadly defined. Here’s what I said:
… a penguin and an eagle are both birds, yet they look completely different, they act differently, they live in different environments, there’s no clear connection between the two of them. If we try to use the word ‘bird’ to describe two such obviously different things, then it is a useless word, and we shouldn’t use it at all.
Innovation can be defined clearly. It does get used to signify many different things – because it describes a broad phenomenon: executing new ideas so that they have economic value. It’s a classification equivalent to ‘bird’. Of course there are different ways to do this. There are many different ways to do this. Which is why we have so many different types of innovation to discuss. Incremental and radical, open and closed, design-driven and customer-focused: penguins and eagles. They are among the many different ways that we can execute ideas with economic importance.
Innovation is a higher level term, which means many things. It’s important to classify the various sub-types as carefully as possible. Last year John and I were doing some consulting and we ran into a guy that said “our firm has to stop encouraging innovation.” This statement was surprising because in all the people we interviewed in that organisation, his ideas were by far the most radical, and by far the most innovative. So how could he argue against innovation? He could because in that organisation, “innovation” actually meant “incremental innovation.” Because his ideas were far from incremental, they weren’t considered. The way that they defined innovation determined the type of innovative ideas they were willing to entertain.
Taxonomy is the basis of all of the earth sciences – like biology, geography and biogeography. But in economics and business research, no one wants to take the time to classify things. Articles that are merely “descriptive” are discounted as being worthless – they’re not real research – real research is theory building. The problem is that you can’t build theory without having clearly defined building blocks. And to have those, you need a bunch of that boring descriptive work.
It’s a real problem – how can make a call to action to encourage more classification? It’s a boring topic. Admit it – even though this is hugely important, how likely are you to share this post? I think the answer is “not very likely at all”. Because classification isn’t interesting. But accurate classification is absolutely essential to solving problems successfully.
We must have clear, usable definitions of innovation and all of its sub-categories, and of failure and all of its sub-categories. The trap that we fall into is that we think of an idea only in terms of one of the sub-categories (say, innovation to mean incremental innovation) – and if someone else uses the term to refer to a different sub-category (innovation to mean radical innovation), we think that they’re wrong, or misguided.
Clear definitions are the foundation of all science. If we want to manage better, if we want to build our innovation processes on a solid foundation, we must spend some time classifying. Because how you define a problem determines if you can solve it.
(photo of Darwin’s Tree of Life sketch from flickr/speakingoffaith under a Creative Commons License)
The Innovation Fight
Posted by Tim in innovation strategy, replication on 27 March 2010
Thursday was one of the worst days of work I’ve had in a long, long time. John and I had major problems arise on three different projects that we’re working on, and it seemed like the entire day was taking up with fights. It was absolutely exhausting, and by the time I got home, I was discouraged.
All three were related to different innovations that we’re working on. In two cases, we were fighting bureaucratic rules – the systems almost built to prevent new ideas from getting implemented. It was frustrating in the extreme.
In the afternoon, I went for a walk to clear my head and I ran across Mark. He said “running into problems like this is a sign that you’re actually doing something.” He’s right. And it’s a fight that all innovators end up having. If they’re in big organisations, they have to fight the rules, and the entrenched interests. If they’re on their own, they have to fight to get someone to listen to them.
It’s easy to be glib about breaking connections to get your ideas to spread, or about creative destruction. But the impacts of both are real. That’s why there’s always resistance to new ideas. This is another reason why having a great idea simply isn’t enough. If you’re going to innovate, you have to be ready to fight. You have to persuade. You have to change minds.
Thursday was a lousy day, but it’s good to be reminded of these things periodically. It makes it that much better when you have a breakthrough. Now that I’ve had a couple of days to rest and reflect (and to work on fixing things!), I’m ready for another fight. I better be – I’ve had a few more ideas, and now I have to figure out how to get them to spread!
Get Better Ideas, Not More
Posted by Tim in connect, innovation strategy, replication on 16 February 2010
Innovation is all about executing ideas so that they have economic or social value. John and I have both talked frequently about how many firms overemphasise generating ideas when they try to increase innovation. When they make this mistake, they end up with a lot of stockpiled ideas, but the amount that they have successfully executed hasn’t gone up because they have mistaken invention for innovation.
There are two issues with ideas that we need to manage – we need to get better ideas, and we need to get them to spread. At a personal level, these are the two parts of connecting – we connect ideas together to create novel, valuable new ideas, and then we connect these ideas to people to get them to spread. We also have to do both of these things as firms when we are managing innovation.
I ran across a great example of these issues today with the blog. A couple of days ago I wrote about how Venessa Miemis used the skills of aggregating, filtering and connecting to create a great blog post called ‘iPad: Overhyped Flop or a Case of Great Design Thinking?‘. The post was very good, and it ended up going fairly viral, with over 14,000 views in a week. Venessa’s assessment is that the bulk of this traffic was driven by this tweet from Tim O’Reilly:
That seems like a pretty reasonable assessment to me. Our conclusion was that connecting the idea to O’Reilly was what led to it being connected to many of the 14,000 people that arrived later. Coincidentally, I had the same thing happen to me yesterday with my post using the aggregate, filter and connect framework to analyse the success of O’Reilly Media. It also was tweeted by Tim O’Reilly:
You couldn’t really ask for a better controlled experiment, could you? So what happened with my post? Well, O’Reilly drove a bunch of traffic to my site – today has had the single highest number of visitors to the blog ever, and it’s still only 1 pm here in Australia. But the total number of visitors is about an order of magnitude less than the number Venessa had.
Why is this? I think it is because of the quality, or at least the spreadability of the ideas in the two posts. Seth Godin uses this diagram in his post today to show how the quality of an idea is worth more than the number of (faux) followers you are talking to:
He is arguing that if your idea is more likely to be passed along, than you can start by giving it to only 100 people (the purple and green lines), and it will quickly spread further than worse ideas seeded among 10,000 people (the red and yellow lines).
Why were Venessa’s ideas more likely to spread than mine? A few reasons:
- I think hers were better thought out. Her post on the iPad is thorough, it makes really good sense, and she articulates the key themes that she found very well. Mine was a lot rougher and this makes my post less likely to spread (though I’m still thrilled with how many people have read it!). The better idea spread much further through the same channel.
- Venessa’s topic has a broader appeal – which makes it more spreadable. There are a lot more people interested in whether or not the iPad will be any good than there are interested in business model innovation. Hard to figure, but true!
- The iPad is a better fit with Tim O’Reilly’s network. If we can generalise about over a million people, I think it’s reasonably safe to say that they are probably more interested in technology than in innovation ideas. So the overlap between the overall higher number of people interested in iPads and O’Reilly’s list of followers is high too.
I think this is a perfect example of the importance of connecting up ideas before we try to connect them to people. Godin’s conclusion is:
A slightly better idea defeats a much bigger but disconnected user base every time.
The lesson: spend your time coming up with better ideas, not with more (faux) followers.
This is an important innovation lesson as well. We don’t need more ideas, we need better ideas. In many ways this is a stock and flow problem – if we only focus on stocks of ideas, we’re less able to get them connected to people. We need to think about our idea flow. As the story of these two posts illustrates, the quality of an idea has a lot to do with how well it flows through our networks. It is yet another example of the greater importance of quality, not quantity.
As we’re managing innovation, we need to figure out ways to increase the quality and the flow of our ideas, not just the number of them.
Fighting the System
Posted by Tim in complex systems, networks, replication on 3 February 2010
Today was one of those days when a lot of related ideas just seemed to keep popping up. It started when I read today’s post by George Siemens which discusses the difficulties of changing the educational system. I recommend reading the whole post, but here is part of his argument:
I want to resist the mindset of measuring what is possible by the existing system.
Look at a few of the biggest technological “innovations” of the last decade: learning management systems, student information systems, interactive whiteboards, iclickers, and virtual classrooms. These tools integrate with existing systems, which is why they are successful. The systemic design of education, from curricular planning to delivery to evaluation, has not been recast in light of the web. Instead, the web has been recast in light of existing systems. In many instances, teaching and learning has been transferred to, instead of transformed by, the internet.
What is the impact of this mindset? When I present on alternative views of assessment and accreditation, or suggest non-course approaches to teaching, the inevitable push-back is “well that won’t work because of _____ aspect of the system”.
Perhaps it is time that we turn our attention explicitly to working on, rather than in, the system.
The thing of it is, this is problem is not restricted to the educational system. It is another example of how the embeddedness of ideas makes it difficult for innovative new ideas to spread. I think that the extent to which this is a problem varies along a spectrum. It is an acute problem in education, and in the public sector. However, as I discussed in an earlier post, we see the same thing happen with the introduction of innovative new commercial ideas. Even products that are clearly superior along all dimensions, like the 56k modems versus the 28.8k modems they were designed to replace, innovation is difficult.
John and I were discussing this idea at lunch today, when I realised that another group of people have a similar problem. We are involved with teaching a class called Developing Business From Science. Many of the students in this class are in science-based jobs, and they have an invention or a new idea, and they want to figure out how to make some money with it. Their ideas don’t have any connections to other parts of the economy, and they usually have to displace something that is already economically embedded.
Here’s what I said when discussing the 56k modems:
To get your innovation embedded into the economy, you have to unconnect the members of your value network from whatever they’re currently using (28k modems, for example), and get them to reconnect to you. The unconnecting is a critical step that we often ignore – this is a mistake.
This problem is consistent across all organisations. It’s the problem that George is talking about in education. It’s the problem that innovators in the public service face. It’s the problem that people grapple with in commercial firms, whether their idea is for a new product, a new service, a new way of doing things or a new business model. The hardest part of innovation is getting our ideas to spread.
This idea was then brought home this afternoon, when I read an article by Seymour Papert that Phil Long forwarded to me. It’s called Why School Reform is Impossible, and it is looking at exactly the same issue – how can we revolutionise education when the system swallows every new idea and assimilates it into the existing structure. He concludes with this recommendation:
Complex systems are not made. They evolve. Where I part company from Tyack and Cuban is when they turn from the book’s historical theme of showing that reform will not work to give advice to reformers about how to do it better. My own view is that education activists can be effective in fostering radical change by rejecting the concept of a planned reform and concentrating on creating the obvious conditions for Darwinian evolution: Allow rich diversity to play itself out. Of course, neither of us can prove the other is wrong. That’s what I mean by diversity.
This is very similar to my view. When we’re trying to get new ideas established, we need to experiment, see what works, and do more of that. One of the areas in which we must experiment is that of our basic assumptions. Siemens’ prescription for education will for everyone, I think:
I’m suggesting something much more subtle: that we no longer allow systems-based arguments and criticism to dampen our creative exploration for what is possible in education. A period of “no boundaries” in our thinking. Forget even arguing against those who appeal to integration with existing structures. Just ignore those discussions completely. I’d like to focus instead on creating a compelling vision of what education could be given new technologies and almost global connectivity.
So there it is from two really smart guys plus me: innovation is evolutionary. The way to enact big change is to treat it as an evolutionary process. All of our organisations are operating within complex systems, so this is the approach to use, no matter what industry we’re in. Let’s start experimenting!
Innovation Diffusion Lessons from Edison
Posted by Tim in business models, innovation strategy, replication on 8 January 2010
How do we win with innovation? I’ve been arguing strongly that one of the key changes in thinking that we have to make is shift from an emphasis on the importance of ideas to one on the importance of execution. In other words, instead of spending so much time trying to have ideas, we’d be better off putting our time and resources into getting our best ideas to spread. Everett Rogers wrote the definitive book on innovation diffusion (unsurprisingly called The Diffusion of Innovations), and here’s what he had to say about the issue:
Many technologists think that advantageous innovations will sell themselves, that the obvious benefits of a new idea will be widely realized by potential adopters, and that the innovation will diffuse rapidly. Unfortunately, this is very seldom the case. Most innovations in fact diffuse at a surprisingly slow rate.
Let’s go back to the innovation metaphors that I was talking about yesterday – light bulbs versus shovels. Edison is famous because he invented the light bulb, right? That’s why we always use the light bulb as the symbol of innovation. One problem: at least 23 other people invented working light bulbs before Edison did. Twentythree!
Why does Edison get credit for the light bulb then? Because he was the first one to build power stations and distribution cables so that everyone could use his light bulb. He did it by paying people to dig up New York to put in the copper wires to carry the electricity from his Pearl Street Power Station.
This story reinforces a few conversations that we’ve been having here recently:
- Edison’s key innovation was actually in the business model. He built a fundamentally different place for himself in the value network. Instead of waiting for others to build the infrastructure needed to get his idea to spread, his company built what they needed. Edison gets the credit because of the shovel, not the light bulb.
- Second, to get his idea to spread, Edison had to get people to unconnect (literally) from their existing value network (gas lighting), and get them to reconnect to his new value network (electricity). The gas industry didn’t just sit by and watch the electrical cables get laid – they fought it all the way. The first 23 teams to invent light bulbs didn’t fight this battle – but Edison’s team did. The network that you’re trying to tap into and the strength of connections within it determines how quickly your new idea can spread.
- Finally, I can’t think of a better illustration of why idea execution is more important than idea generation. If all that matters it the idea, we’d be talking about one of the other 23 teams that invented a working light bulb, not Edison’s.
If that doesn’t convince you of the supremacy of the shovel over the light bulb, I don’t know what will!
(pictures from Global Edison)
The 1000 Cell Spreadsheet Kills an Innovation
Posted by Tim in business models, innovation strategy, replication on 30 December 2009
A few years ago I had a consulting job where my task was to help a company figure out how to sell the waterless composting toilet that they invented. They had already had other consultants working on the problem, but they weren’t happy with what they got from them. The only constraint that I had was that the plans had to be for selling the toilets in China and India (by the way, I was thinking about adding a picture to this post, but I think we all should be thankful that I didn’t…).
You may well ask why China and India? I certainly did. The company was already active in the US, Europe and Australia with other products, so why not go there first? Their answer was the 1000 cell spreadsheet. One of their early joint venture partners had developed an incredibly detailed market analysis spreadsheet. It considered about 25 possible markets for the toilets. The spreadsheet started by taking the population of these 25 countries, and then running this number through a huge long string of calculations (% of people buying a toilet each year, and a number of similar things). At the end of all of that, the two markets with the biggest potential were China and India. Why? Because every calculation that they made was either a multiplication or division of the original numbers, with no variation between countries. So the end results (value of the toilet market) were directly proportional to the original set of numbers (population).
This is clearly poor analysis, for a number of reasons. The key one is that trying to sell high technology toilets in countries where huge numbers of people lack access to any toilets at all is a bad idea. If someone hasn’t spent US$20 on a pit toilet, why would they spend 10 times that on a composting toilet? The answer ended up being: there’s no reason for people to do that. The company that I did the report for is now out of the toilet business, and their great invention never got into the market. This is a situation where thinking about value networks and business models would have helped.
I wish I had realised it at the time, but I hadn’t started thinking about this in great detail yet – the company had no business model for their new idea. Their value proposition was basically ‘it’s a cool toilet’. Consequently, the markets that they targeted were simply the biggest ones they could find in terms of number of people. The fact that there was no value network to plug into in these markets was never considered, despite my best efforts.
If their value proposition had been ‘this is a waterless toilet’, then they would have looked for markets with limited water supplies, like Australia, South Africa and the Southwest United States. All of these countries already had value networks for water-conserving toilets that my firm could have tapped into.
If their value proposition had been ‘composting toilets are green’, then could could have looked for markets that valued this highly, like many European countries, or California.
All of these would have been better options than China and India.
I think there some important lessons here.
- First, don’t mistake numbers in a spreadsheet for reality. When you’re modeling markets for your new idea, you need to question all of the assumptions that underpin your model. The assumptions in this firm’s 1000 cell spreadsheet were deeply flawed – consequently, so were the decisions based on that spreadsheet.
- Second, don’t automatically go for the markets with the most people. The number of firms that have gone broke following the ‘If we can just get everyone in China (or India) to just buy one of our products’ strategy is very high. You’re much better off finding a smaller market that values your idea.
- Finally, you have to be clear about the business model for your idea. You need to know the hook for your new idea, who will value that, and what value network you’re in, among other things. Lack of clarity on just a couple of these can sink your entire effort before it really gets off the ground.
I just took another look at the report that I put together for them. I’m still happy with the analysis that I did, but I was answering the wrong question. I tried to lead them to better questions, but at the time I was too inexperienced to get that to work. The lesson of the 1000 Cell Spreadsheet is that while analysis is an important part of building your business model, a barrage of numbers is a poor subsitute for clear thinking. We have to get our business models right if we want our innovations to spread.
You Don’t Need Any More New Ideas!
Posted by Tim in innovation strategy, replication, selection, variety on 30 December 2009
Scott Berkun let out the secret of innovation today in an outstanding blog post. It’s a secret that Rowan Gibson tried to let out of the bag recently, and so did Braden Kelley on Blogging Innovation. I’ve tried to tell you about it too, using both analogies and statistics. The secret idea of innovation is this:
You don’t need any more new ideas.
Here is Berkun on the what we really need:
If there’s any secret to be derived from Steve Jobs, Jeff Bezos, or any of the dozens of people who often have the name innovator next to their names, is the diversity of talents they had to posses, or acquire, to overcome the wide range of challenges in converting their ideas into successful businesses.
That’s it. The problem is executing your ideas. Here’s an example – yesterday I talked about mousetraps – here are some interesting stats.
The patent for the flip-trap mousetrap design was filed in 1899. That’s a better mousetrap, right? We’re still using that design over 110 years later, so it’s probably pretty good. And yet, since 1899, the US Patent Office has granted over 4400 mousetrap patents. They receive more than 400 new mousetrap patents every year. So there’s no shortage of ideas. But fewer than 20 mousetrap designs have led to products that have actually made money. The problem in innovation is executing your new idea, and getting it to spread.
There is so much effort put into improving innovation by generating more ideas. This isn’t necessarily wasted effort, but it’s not the smartest use of resources. My MBA students evaluated innovation within their firms:
This approach is flawed, and my MBA students demonstrated why. They came from a wide range of organisations – huge multinationals, small start-ups, government departments, and educational institutions. Despite these different backgrounds, their findings were remarkably consistent – only 3 of the 60 organisations that they work in are ideas-poor. The other 57 (that’s 95%!) have problems with either selecting or diffusing ideas.
Here’s more from Berkun:
The closest thing to a real secret is this: In my years studying and teaching all things innovation, there’s one fact that’s the hardest for people to swallow and it goes as follows – To invent or create is to take a bet against the unknown. No matter what you do, you are still betting you can do well in the face of many things that are out of your control. Don’t like that? Don’t want uncertainty? Then do something else. Comfort with risk and uncertainty is the real secret. Or at least acceptance of the fact you can work your ass off for uncertain rewards.
Where does this leave us? Here are some conclusions:
- If you’re going to get some help to improve innovation at your firm, don’t focus on generating ideas. Get help on selecting ideas, or on getting them to spread. Those are the hard parts.
- Innovation is a bet – you’re betting that your new idea will work better, that it will meet needs, that it will fit into the value network. All of these things have to happen for your innovation to work. Like Berkun says, this is a leap into uncertainty.
- Most of the innovation problems that organisations face are problems with innovation diffusion – the challenge is to get your new ideas to spread.
The new idea that I’d like you to accept is that you don’t need any more new ideas. Instead of generating more ideas, let’s develop some plans for getting better at executing our ideas. That seems like a good idea heading into the new year, doesn’t it?
