Tim Kastelle

Category: book riffs

  • Pulling in Ideas to Improve Innovation

    One of the key ideas in The Power of Pull by John Hagel, John Seeley Brown and Lang Davison is that changes in the business environment are leading to a situation where rather than creating great ideas and then pushing them out to the world, we need to take advantage of knowledge flows by pulling in ideas and resources. Hagel does a good job of outlining six of the factors leading to environmental change in his Tedx talk – it is well worth your time to watch it:

    One of the key implications of this is that if we are going to execute a pull strategy, we need to have some gravity – we need to be able to draw people, resources and ideas towards us. How can we do this? Here are some ideas:

    • Create our own novel ideas: One of the ironies in this approach is that if we are going to pull resources to us, we need to give away some value. We need to create novel and innovative ideas that will help others improve their situation. In part, we need to have what Hugh MacLeod calls smarter conversations:

      Ask not what tools you want to use, ask how you want to change how you talk to people. All evolutions in marketing are evolutions in language. Those who can raise the level of conversation in any market, win.

    • Make it easy for people to find your smarter conversations: In the book they talk about increasing your ‘findability’. This part is tricky – if you’re not careful, you can fall back into using push strategies to promote your ideas. Social media is one way to increase findability. But so are the old-fashioned methods of building networks. This is where some of Seth Godin’s ideas are useful – find the people that care about what you’re talking about, and if your ideas are good, and you’re lucky, they’ll tell other people about them.

      Sunrise Portland Head Lighthouse, Maine, USA

    • Give up power: one final step is give up power – you have to get power out to the other members of your network. Here is how a review of the book in The Economist concludes:

      What does all this mean for firms? They will have to shift from a command-and-control approach to one in which the company becomes a platform for employees to make the best possible use their pulling power. That will mean pushing more resources from the corporate centre to those employees who are most exposed to change. Employees should also be encouraged to spend more time nurturing their networks both online and off, and tweeting to their heart’s content. Firms that ban their employees from using Facebook or Twitter may suffer the same fate as the big wooden effigy at the Burning Man festival, which, as you may have guessed, goes up in flames.

      In the book, they talk about the importance of empowering everyone in order to increase passion:

      As we begin to realize that scalable efficiency cannot see us through a shift to near-constant disruption, we will begin to see that performance improvement by everyone counts, not just performance improvement for “knowledge workers.”

      We will begin to redefine all jobs, especially those performed at the “bottom of the institutional pyramid,” in ways that facilitate problem solving, experimentation, and tinkering. This will foster more widespread performance improvement. Everyone, even the most unskilled worker, will be viewed as a critical problem-solver and knowledge-worker contributing to performance improvement. One need only walk through the assembly lines of a Toyota plant to see highly motivated workers who are passionate about their jobs because they can tangibly see how they are making a difference by tackling challenging work problems and contributing to greater value.

    I was discussing ideas similar to these with a consulting client this morning. At the moment, they have an innovation process that is highly concentrated within the upper tier of management. They see a need to start including other managers in innovation, but they still can’t see how to get the low-skilled workers involved.

    We talked about how if they can figure out to do this, it will lead to significant differentiation between them and the rest of their industry (one of their competitors was telling me last week about how one of their plants had more than 100% turnover in 2009 – which is mind-boggling in several ways!)

    I don’t know if they can do it. I hope so – and I’m going to do my best to help them. One encouraging point is that they see a need to move towards a more knowledge-based business model in order to continue to do well over the longer term.

    One key component in such a strategy is figuring out how to pull ideas, people and resources into the organization.

    (Lighthouse photo from flickr/freefotouk under a Creative Commons License)

  • The Best Way to Have a Great Idea…

    Dual Nobel Prize winner Linus Pauling famously said “The best way to have a great idea is to have a lot of ideas.”

    He was right.

    Well, really, he won two Nobel prizes, so my opinion here is relatively unimportant. But anyway, I think he was right.

    The quote from Pauling showed up again recently in The Medici Effect by Frans Johansson. The book is very good – it talks about working at the intersections between disciplines in order to come up with radically innovative ideas.

    Johansson brings this up to make a couple of important points. The first is that the people that we think of as being innovative often have history of executing a large number of ideas:

    Some individuals or creative teams will come up with ten, a hundred, or even a thousand times more ideas than their peers. Not only that, those who have created the most are also the ones who have the most significant innovative impact. This was true in the past; Pablo Picasso, for instance, produced 20,000 pieces of art; Einstein wrote more than 240 papers; Bach wrote a cantata every week; Thomas Edison filed a record 1,039 patents. This holds true today. Prince is said to have over 1,000 songs stored in his secret “vault,” and Richard Branson has started 250 companies.

    Obviously, there are also great ideas from people that aren’t so prolific. But Johansson is saying that generating a lot of ideas, and then trying them out is one outstanding way to eventually hit upon a great idea.

    This leads to the second point – if you generate and try a lot of ideas, they’re not all going to be great, even if you are a creative genius. To show this, he revisits those examples:

    … this explanation ignores the fact that groundbreaking innovators also produce a heap of ideas that never amount to anything. We play only about 35 percent of Mozart’s, Bach’s or Beethoven’s compositions today; we view only a fraction of Picasso’s works; and most of Einstein’s papers were not references by anyone. Many of the world’s celebrated writers have also produced horrible books, innovative movie directors have made truly uncreative duds, megasuccessful entrepreneurs have disappointed investors, and pioneering scientists have published papers with no impact whatsoever on their colleagues.

    This ties into a couple of critical points about innovation. One is that it is not enough to have ideas. We have to sort them to figure out which ones work and which ones don’t. We can do this with some sort of selection process, but the best form of selection is to try them out. See what works and what doesn’t. Experimenting is a critical innovation skill.

    The second point is that failing is part of the innovation process. Stefan Lindegaard has recently triggered a discussion on this topic, which as usual has elicited mixed responses. Some say that it is better to succeed than fail, and that it is dangerous to encourage failure. While this may be true, it is also true that if some of your ideas aren’t working, you aren’t trying enough ideas. Here’s a good take on this from Bloomberg Weekly:

    But intelligent failures — those that happen early and inexpensively and that contribute new insights about your customers — should be more than just tolerable. They should be encouraged. “Figuring out how to master this process of failing fast and failing cheap and fumbling toward success is probably the most important thing companies have to get good at,” says Scott Anthony, the managing director at consulting firm Innosight.

    As Stefan says, we need to fail smartly. Experiment, then do more of the things that work, and learn from the things that don’t. One key point here is that in order to learn from our experiments, we have to set them up so that we gather useful data regardless of whether they succeed as we expect them to or not. This is another critical innovation skill.

    So I definitely agree with Pauling – the way to get a great idea is to try a lot of them. To do this successfully, we need to develop an experimental approach to innovation.

    Note: Here is Johansson explaining some of the key concepts from the book, which is well worth reading:

    Frans and The Medici Effect from The Medici Group on Vimeo.

  • The Real Problem with the Media Business Model

    Almost as soon as I finished yesterday’s post on media business models I knew that I had missed an important part of the story. A big part of the problem with the business model for many of the media segments is that they are actually two-sided markets, and the value proposition on one side has collapsed. You may well ask: what in the world does that mean? Good question.

    A two-sided market is one where an intermediary acts to bring two distinct groups together. The wikipedia definition is pretty good:

    Two-sided markets, also called two-sided networks, are economic networks having two distinct user groups that provide each other with network benefits. Example markets include credit cards, composed of cardholders and merchants; HMOs (patients and doctors); operating systems (end-users and developers), travel reservation services (travelers and airlines); yellow pages (advertisers and consumers); video games (gamers and game developers); and communication networks, such as the Internet. Benefits to each group exhibit demand economies of scale. Consumers, for example, prefer credit cards honored by more merchants, while merchants prefer cards carried by more consumers.

    The economics of these markets are explained very well in the book Invisible Engines: How Software Platforms Drive Innovation and Transform Industries by David S. Evans, Andrei Hagiu and Richard Schmalensee (and I just noticed today that the book is available as a free download at that link!). In many of these types of markets, the intermediaries get a pretty good chunk of the money – this has been true in markets like software and the media in particular. In others, like mobile telephony, the money gets spread more widely.

    The internet is breaking down some of these two-sided markets in two different ways. One way is that it can make it easier for the two groups to connect up with each other – driving down the profits of the intermediaries or even cutting them out completely. This is what is happening with travel. Online fare finders have driven the marginal cost of comparing flights and prices down near zero, putting pressure on travel agents. On top of that, many airlines now do a substantial amount of their own booking through direct websites, cutting out both online and offline intermediaries.

    Bob Garfield explains how the other way these two-sided markets break down in his book The Chaos Scenario. This video summarises the main points of the book pretty well (it runs for 35 minutes, and is pretty entertaining, but the critical points come up in the first few minutes):

    The Chaos Scenario from Greg Stielstra on Vimeo.

    All of the advertising-based mass media are two-sided markets. They create content that they essentially give away free to consumers to create a large audience. They then sell access to this audience to advertisers. As Garfield points out, there are basically two problems now with this model – the first is that widespread access to content has driven down the price that consumers are willing to pay for it, and more importantly they have fragmented the audience. The second issue is that the explosion in available content has also driven down the prices that advertisers are willing to pay for access to any one particular segment of the market.

    This has led to a collapse in advertising revenue for the major players, including newspapers, magazine publishers, and television networks (both free-to-air and cable).

    This leads to the real problem in these business models – filtering is a critical part of creating value for consumers, and the fundamentals of that part of the business model haven’t changed much. The problem is that it is impossible to replace this advertising revenue – the other side of the value creation equation has changed enormously. The key point is that being a platform in a two-sided market can be incredibly lucrative (think Microsoft – where their operating system connects software developers to users), but it requires two business models – one for each side of the market.

    Problems arise when the value generation equation changes in one of the business models. This usually requires changes in the other side of the business model as well – which is a very complex business model innovation problem!

    Note: Greg Satell, who writes Digitaltonto one of my favourite blogs, doesn’t agree with Garfield’s stats, and consequently disagrees with my conclusions here. Be sure to read his response in the comments.

  • Do Something Now!

    I have an almost overwhelming amount of stuff to do right now. It’s all really interesting work, and I’m happy doing it – there’s just a lot of it right now. When I find myself in situations like this, I often end up paralysed, which makes things even worse. That is the situation that I was in yesterday morning, when I ran across a post by Julien Smith (who bewilderingly seems to get less credit for Trust Agents than Chris Brogan does) called Life Doesn’t Start Tomorrow.

    Julien’s post really gave me a kick in the pants. In it he asks everyone to take 5 minutes to do something that they’ve been putting off. So I did some revisions on a paper that has been in my inbox for a couple of weeks. Then I went to talk to my co-author about it, and he then submitted it to a journal. It took more than 5 minutes, but it was a huge relief to get it off my plate. Then I went to talk with John about another paper that we’re working on, and we figured out what we’re doing with it. He’s submitting it today. Then I got a new hot water heater ordered and scheduled some maintenance on my car. Then I did a complete rewrite of another paper I’m working on with John and sent it to him. We’ll get it submitted over the weekend. After going home, I wrote a blog post (another one exhorting people to action!). Next, I reviewed a consulting report for a project that I’m working on, sent it back to my collaborator and we sent it to the client. I finished the day by doing some reading with our new kittens Wallace and Schumpeter.

    It was the most productive day I’ve had in a long time – and it was all a cascade from that first job that I got done at Julien’s prompting.

    So today, I’m going to do the same thing for you that he did for me – I’m asking you to go do something. Here is how he finished his post:

    Q: What is a five-minute action you can take today that will make tomorrow better? I don’t care if it’s cleaning your house or writing one paragraph. You’re going to do it now.

    A: Drop everything right now, act on that for five minutes, and then come back and tell me what you did.

    I am like your conscience, except I don’t accept bullshit. So I expect you to comment here today, or you clearly aren’t actually reading.

    Do it now.

    It worked for me – today is much better than yesterday now that I have all that stuff done. You can do the same – so it’s the same deal:

    Take action for five minutes NOW – then report back.

    (cartoon by Hugh MacLeod – you can subscribe to his great newsletter here, but only after you’ve done your five minutes of action…)

  • Your Brand is How You Interact

    One of the key parts of innovation is getting our idea to spread. One of the disadvantages that new organizations have when they innovate is that they do not have any name recognition – in this situation people often think that if only they had a strong brand to support them, then it would be easier to get their ideas launched.

    The advantage that brands have is that they can serve as a proxy for quality – brand reputation can reduce transaction costs because when we are dealing with a known brand, we know what to expect. We don’t have to research every interaction with a known brand before we go into it. The key word in that last sentence though is interaction – brands are built on accumulated interactions with people.

    In other words, brands are not what we say we are – brands are how we interact.

    Check out this talk by Mark Earls, author of Herd, which is required reading:

    The big takeaway for me in that talk is his first recommendation – Do something.

    I started thinking about this recently when we were talking about the impact of the Old Spice Guy commercials. There are two key parts to that story. The television commercials launched in early February, but yearly sales to the end of June showed a decline of 7%. So despite the fact that the commercial was a huge success (watched millions of times on youtube, etc.), it wasn’t actually getting people to buy Old Spice. Then they had the second wave of promotion, using a social media strategy to promote the 200+ clips that they made over three days via twitter, and interactions with people both well-connected and not. This resulted in a huge increase in sales for July.

    Several people suggested that the failure of the commercials to have an impact on sales was ok, because the success of the spots built profile. Or maybe even started to change the attitudes people had towards Old Spice.

    I think that both of these points are correct, but in my marketing days I was pretty pragmatic – if the things we did weren’t having an impact on peoples’ actions, I didn’t see much value in just building awareness or profile.

    This gets to my key point. I think that the television ads weren’t successful because they were essentially Old Spice telling people that the brand was different. The difference with the social media campaign is that this was Old Spice acting differently. Interacting differently, actually.

    To me, a brand is not what you say you are. I think that a brand is the accumulation of interactions between you and your customers. You gain your reputation through what you do – and if you act consistently over a long period of time those actions constitute your brand.

    The tricky part with this is that brand perception can be incredibly difficult to change. It takes more than 17 million views on youtube to change perceptions of Old Spice. This isn’t always bad. For people that have been buying Toyotas for years because they have been well-built and reliable, the recent publicity over the sudden acceleration problem (or rather, the sudden acceleration driver error problem) won’t necessarily outweigh the years of accumulated good experiences with the brand.

    The good news for innovators in all of this is that you can start building your brand right now through what you do. If your idea is good, and it provides value for people you can start building the right associations through these interactions. The best idea doesn’t always win, because often you have to break old, strong associations before you get a chance to build your own – and this can be hard.

    The main point to remember when you are trying to spread your great new ideas is that the brand that gets build around them is not based on what you say about the ideas – it is based on how the ideas interact with people.

    Your brand is how you interact.

  • Don’t Hire Experience, Hire Learners

    A few weeks ago, the Australian Financial Review published an article discussing how Australian employers value job candidates with an MBA. The short summary is: they don’t value MBAs at all. One headhunter was quoted saying something along the lines of “most employers say that if you have to choose between getting an MBA or getting two more years of experience, you’re much better off with the experience.”

    This is one of the dumbest things I have ever read. Ever.

    Here’s the problem with this idea: if you get two more years of experience what are you likely to be going? You’re most likely to be doing exactly what you’re doing right now. This has no practical value at all.

    Jason Fried and David Hansson make an important point about this in their book ReWork. They say:

    Of course, requiring some baseline level of experience can be a good idea when hiring. It makes sense to go after candidates with six months to a year of experience. It takes that long to internalize the idioms, learn how things work, understand the relevant tools, etc.
    But after that, the curve flattens out. There’s surprisingly little difference between a candidate with six months of experience and one with six years. The real difference comes from the individual’s dedication, personality, and intelligence.

    I’ll add one other critical factor to this – the real difference comes from peoples’ ability to learn. The problem with experience in the same job is that you stop learning. So staying in the same position that you’re currently in instead of doing an MBA, or doing anything that’s different is a problem – you’re not learning anything new.

    I’ve hired a lot of people over the years, and my track record has been pretty good. Reading ReWork made me realise something – I can’t remember ever hiring someone that had a lot of experience in the job I was hiring them to do. Why? Because I’ve worked in areas that were changing. People with experience in the job had a bunch of bad habits that weren’t suited to the changing environments. It was always better to hire someone that could learn. Learners are much better equipped to deal with change.

    If your industry is stable, with very little change, then you can afford to hire experience.

    On the other hand, if your industry is changing, then experience is too expensive. You’re much better off hiring someone that is a skilled learner.

    There are plenty of ways to identify skilled learners. They move from position to position relatively frequently (even if they’re in the same organisation all the way through), the initiate things, they talk about learning when you discuss their career trajectory with them. Some of them might even take some time off from work specifically so that they can learn some new skills.

    Forget experience – hire learners.

  • Strategy is What You Do

    I spent a very enjoyable day today working with a group of people that basically act as innovation consultants. They each work with firms in order to help them develop and embed innovation processes.

    In the course of the day, several of them said something that went something like “we’re not sure how their innovation plan fits in with their strategy.” One of them also said this about one of the firms that he works with: “Their strategy seems to be pretty good, even though it isn’t written down.”

    This raises an important point – your strategy is not what you say, your strategy is what you do.

    The split between strategic planning and strategic action is extremely dangerous. Too often, firms will write out a strategy and then think that their problems are solved. This never works.

    Think of it this way – if your strategy isn’t written down, do you still have a strategy? Of course. Strategy is the set of choices you make about what business your in, and how you’ll win.

    If your firm is operating, you are in some business, whether you’ve written it down or not. In the same way, one way or another you have some set of qualities that entice people to pay for whatever you’re providing. These constitute your strategy. It doesn’t matter if it is formally written out or not.

    So if one of the parts of your strategy is to make innovation a priority, it doesn’t matter how many you times you write that in your strategic plan, or in your mission statement, or in your values. The thing that matters is what you do on a day-to-day basis.

    The advantage to writing out a strategy is that it can make it easier to decide what to do when it’s Tuesday morning at 10:30 am and you sit down at your desk with some free time. If you’ve already thought out your strategy, the choices that you’ve made in doing that can guide you in your current choice of how to best spend your free time. But the strategy isn’t in the document, it’s in the choice you make at 10:30 am.

    In other words, your strategy is not what you say, your strategy is what you do.

  • Convergence Culture & Innovation

    Mitch Joel points to this excellent video by Henry Jenkins, which outlines some of the key points from his book Convergence Culture:

    Mitch uses this to point out the importance of storytelling in marketing:

    The brands that win are the brands that tell a great story. When it comes to transmedia storytelling, the brands that win are the brands that tell many great stories and are able to connect them all together. One way to get better at telling great stories, comes from understanding the structure, form and ingredients of a great story.

    He then includes 15 books that help explain how to create a great story.

    I think that this is also critically important for innovation. One of the issues in innovation is that we not only have to come up with great ideas, and figure out ways to make them work, but we must also figure out how to get them to spread. This is a storytelling problem.

    Transmedia is the idea that we now have multiple media channels that we can use to tell our stories. Michael Wu criticises the simplistic view of this which views the multiple channels as simply more routes to take in broadcasting from us to our customers. He includes this graphic, which shows the ideal in the third panel:

    He encourages using these multiple channels to encourage interactions among the people using our ideas.

    This is an essential innovation lesson. Getting our great ideas to spread is the last step of the innovation process. We now have many new methods that can be used to do this. If we’re smart, we won’t simply use these as new channels that allow us to do the same old thing. Instead, we’ll also be innovative in our use of the new media pathways. That’s the best way to improve the chances of getting our ideas to spread.

  • The Art of the Innovator

    Superconnect, the new book by Richard Koch and Greg Lockwood, includes this great quote from Denis Diderot in his Encyclopédie:

    Everything is linked together… beings are connected with each other by a chain of which… some parts are continuous, though in the greater number of points continuity escapes us… the art of the philosopher consists in adding new links to the separated parts, in order to reduce the distance between them as much as possible.

    I would say that this is also the art of the innovator – “to add new links to the separated parts, in order to reduce the distance as much as possible.”

    This includes both of the connection steps – connecting ideas to each other (the source of novel new ideas), and then connecting ideas to people.

    The thing that I particularly like about thinking about it in this way is that if you are innovating to reduce the distance between people, you are more likely to come up with things that are genuinely new, and more importantly, to come up with things that create genuine value.

    Incremental improvements to existing things don’t do this. Instead, consider part of Umair Haque’s description of what makes Apple unique – their willingness to completely rethink existing categories:

    Challenge products. Most companies make the same toothpaste, car, or shoe — just in a slightly different color or flavor. Not Apple. Every once in a while, it challenges the existing dominant design, the accepted ideal of what a product should be. That is, of course, the story of the iPad. Yes, tablets have been around for a while — but none with the features, attributes, and pricing of the iPad. Instead of contesting the same old stuff, Apple challenged everyone to rethink it.

    That’s the art of the innovator. To create some artful innovation yourself, start thinking about how you can build those links.

    (photo from flickr/Matti Mattila under a Creative Commons license)

  • Managing Different Creative Styles

    Connecting ideas is the fundamental creative act of innovation. Trying to harness this creativity within ourselves and our organisations is the first step in managing innovation as a process. Of course, this is a step that resists systematisation – as Simon Bostock points out, innovation is a cloud not a clock. In that post he quotes Jonah Lehrer:

    Karl Popper, the great philosopher of science, once divided the world into two categories: clocks and clouds. Clocks are neat, orderly systems that can be solved through reduction; clouds are an epistemic mess, “highly irregular, disorderly, and more or less unpredictable.” The mistake of modern science is to pretend that everything is a clock, which is why we get seduced again and again by the false promises of brain scanners and gene sequencers. We want to believe we will understand nature if we find the exact right tool to cut its joints. But that approach is doomed to failure. We live in a universe not of clocks but of clouds.

    Malcolm Gladwell shows why this process might be hard to manage in his story called Late Bloomers (originally in the New Yorker, then in his book What the Dog Saw). One problem is that there are radically different styles of creativity.

    Gladwell talks about several examples of people that came into their own creatively later in life. One comparison that he makes is between Picasso and Cézanne. Picasso was precocious – his genius was apparent from pretty much the first painting he showed in public in his early 20s. On the other hand, Cézanne took much longer to develop. The consensus now is that his early work was for the most part terrible (in part because he was not technically skilled when he began) – his string of masterpieces didn’t start until he was in his 50s. In addition to differences in when their artistic talent emerged, there were also substantial differences in the ways that they thought about creativity:

    Prodigies like Picasso, Galenson argues, rarely engage in that kind of open-ended exploration. They tend to be “conceptual,” Galenson says, in the sense that they start with a clear idea of where they want to go, and then they execute it. “I can hardly understand the importance given to the word ‘research,’ ” Picasso once said in an interview with the artist Marius de Zayas. “In my opinion, to search means nothing in painting. To find is the thing.” He continued, “The several manners I have used in my art must not be considered as an evolution or as steps toward an unknown ideal of painting. . . . I have never made trials or experiments.”

    But late bloomers, Galenson says, tend to work the other way around. Their approach is experimental. “Their goals are imprecise, so their procedure is tentative and incremental,” Galenson writes in “Old Masters and Young Geniuses,” and he goes on:

    “The imprecision of their goals means that these artists rarely feel they have succeeded, and their careers are consequently often dominated by the pursuit of a single objective. These artists repeat themselves, painting the same subject many times, and gradually changing its treatment in an experimental process of trial and error. Each work leads to the next, and none is generally privileged over others, so experimental painters rarely make specific preparatory sketches or plans for a painting. They consider the production of a painting as a process of searching, in which they aim to discover the image in the course of making it; they typically believe that learning is a more important goal than making finished paintings. Experimental artists build their skills gradually over the course of their careers, improving their work slowly over long periods. These artists are perfectionists and are typically plagued by frustration at their inability to achieve their goal.”

    Where Picasso wanted to find, not search, Cézanne said the opposite: “I seek in painting.”

    I think that there are parallels in innovation. There are innovations that seem to spring straight out of the heads of their young creators, like the search algorithm upon which Larry Page and Sergei Brin founded Google in their mid-20s. That’s Picasso-style creativity.

    And then there ideas that take a while to germinate, and many iterations, like the Dyson Vacuum. James Dyson took over five years and hundreds of prototypes to get his bagless system to work. This invention, launched while he was in his late-30s, represented a major leap forward in terms of technical sophistication and accomplishment relative to his earlier inventions. This is Cézanne-style creativity.

    This has a couple of implications for innovation management:

    1. At a personal level, we need to know which approach works best for us – the intuitive, broad, big picture, jump-straight-to-the-answer Picasso-style method, or the deliberate, slow, iterative Cézanne style.
    2. As managers, we need to avoid using ideas like this to support stereotypical thinking. Picasso worked in the same way all the way through his career. His creative style was established early and persisted. So it is not an issue where young people are creative one way, and older people are creative in another.
    3. If we are working with groups of people that are not experienced thinking creatively, we might need to set up innovation systems organised more around seeking, iteration, and Cézanne-style creativity.

    There are many challenges in trying to manage innovation as a process. Accounting for different styles of creative thinking is another factor that we must consider in doing this.

    On the other hand, all this might just be trying to turn a cloud into a clock…

    (picture from flickr/Odalaigh under a Creative Commons license)

  • Innovating Meaning

    Often when we someone asks us to describe a product or a service, we tell them about features. What does it do? How does it do it?

    This is a mistake. Products and services are not about features – they are about meaning, and they are about getting jobs done.

    Here’s an example – listen to Dan Ariely talk about the Toyota Prius:

    Ariely is not describing the Prius as a set of features – he is describing what it means to drive a Prius. The features may influence this meaning, but the innovation in the Prius is not really in what it does – the innovation is in what it means to people.

    Clay Shirky has another example in his new book Cognitive Surplus: Creativity and Generosity in a Connected Age:

    When McDonald’s wanted to improve sales of its milkshakes, it hired researchers to figure out what characteristics its customers cared about. Should the shakes be thicker? Sweeter? Colder? Almost all of the researchers focused on the product. But one of them, Gerald Berstell, chose to ignore the shakes themselves and study the customers instead. He sat in a McDonald’s for eighteen hours one day, observing who bought milkshakes and at what time. One surprising discovery was that many milkshakes were purchased early in the day – odd, as consuming a shake at eight A.M. plainly doesn’t fit the bacon-and-eggs model of breakfast. Berstall also garnered three other behavioral clues from the morning milkshake crowd: the buyers were always alone, they rarely bought anything besides a shake, and the never consumed the shakes in the store.

    The key to understanding what was going was to stop viewing the product in isolation and to give up traditional notions of the morning meal. Berstell instead focused on a single, simple question: “What job is a customer hiring that milkshake to do at eight A.M.?”

    If you want to eat while driving, you need something you can eat with one hand. It shouldn’t be too hot, too messy, or too greasy. It should also be moderately tasty, and take a while to finish. Not one conventional breakfast item fits that bill, and so without regard for the sacred traditions of the morning meal, those customers were hiring the milkshake to do the job they needed done.

    All the researchers except Berstell missed this fact, because they made two kinds of mistakes… The first was to concentrate mainly on the product and assume that everything important about it was somehow implicit in its attributes, without regard to what role the customers wanted it to play – the job they were hiring the milkshake for.

    The second mistake was to adopt a narrow view of the type of food people have always eaten in the morning, as if all habits were deeply rooted traditions instead of accumulated accidents.

    The innovation in both cases is in what the product means. None of the features of the milkshake changed to turn it into a breakfast meal – the innovation was driven by customers, who invented a new use (and a new meaning) for milkshakes. The change that Ariely talks about with the Prius is not feature-driven either – he is arguing that the Prius has been successful because it means something different.

    This is exactly what Roberto Verganti is talking about in Design-Driven Innovation – the role of design in innovation is to create new meanings for things. This is a huge innovation opportunity.

    The lesson here is this: don’t get hung up on features, or on what things do. Instead, think about what they mean. One good way to approach innovation in meaning is to focus on the job to be done. If you can innovate meaning you have a chance to create a significant competitive advantage.

    (you can see the academic article from Berstell and colleagues discussing jobs to be done here – via Graham Hill).

  • An Innovation Paradox

    David Lazer included a really interesting demo in one of his talks at the Sunbelt Social Networks Conference. He was in a session talking about using the internet as a research resource, and there were about 100 people in the room. Lazer asked how many people there were under 30 years old – about 40% of the people raised their hands. Then he asked how many of those people had a landline – and not one of them did. He repeated the exercise with people over 45, and about 2/3 of us still have a landline.

    The point that he was making is that a lot of the people making pronouncements about the internet are over 45 – and our experiences of the internet and technology is likely to be very different from those of the majority of people using the net these days.

    The thing that struck me about this is that I was surprised by the fact that none of the under-30s had a landline. I had read about this, and I know a fair number of people in that age group, and it’s true that everyone that I know only has a mobile. But it still hadn’t really sunk in to me that that’s the way things are done now.

    The innovation lesson here is that when we’re coming up with great ideas, we need to know a lot about the people that we want to use them. And one of the huge pitfalls here is to assume that they are just like us. We need to have some mechanism in place to help us figure out what people really need.

    However, John C. Bogle points out some of the problems with this in his book Enough. He is one of the people that helped invent mutual funds, but he is critical of much financial innovation. Part of the problem that he identifies is an over-reliance on process. He includes this quote from Daniel Yankelovich to illustrate the danger in relying on metrics and process:

    The first step is to measure what can be easily measured. This is okay as far as it goes. The second step is to disregard that which cannot be measured, or give it an arbitrary quantitative value. This is artificial and misleading. The third step is to presume that what cannot be measured really is not very important. This is blindness. The fourth step is to say that what cannot be measured does not really exist. This is suicide.

    Bogle counters this with an aphorism that he freely shares within his firm, Vanguard, which says:

    For God’s sake, let’s always keep Vanguard a place where judgment has at least a fighting chance to triumph over process.

    In other words, sometimes we have to rely on our own belief concerning the correct course of action to follow.

    These two views form an innovation paradox – we have to understand that not everyone is like us, and we need some kind of process for learning how they differ and what they need. So we have to get outside of our own head. On the other hand, we also have to be willing at times to ditch our processes and rely on our own good judgment. So we have to ignore what everyone else says and stick with what we know ourselves.

    How can we do both?

    There are a couple of steps to take to resolve this paradox. One is to develop the wisdom to realise when we need to follow one path, and when the other is most appropriate. This comes from experience, and it also comes from realising that there is not only one correct way to do things.

    Developing the flexibility to act both ways is the second step- we need to be able to be able to get out of our own heads to understand the needs of others, while also sometimes being willing to ignore what everyone else says and use our judgment.

    Managing innovation is filled with paradoxes like this – where we are simultaneously pulled in opposite directions. We need to be comfortable with the ambiguity that this imposes on us. And we need to be wise enough to figure out which way is best in each particular circumstance. Both of these are hard skills to develop – and even harder to quantify. But it’s soft skills like this that are essential to managing innovation. And to managing.