Monday, September 30, 2013

How executives can contribute to innovation

I've been reading and re-reading some new research from the folks at PwC and the Conference Board on innovation and growth.  PwC has done an excellent job with surveys and research on innovation talking to global senior executives.  Two reports I've enjoyed include Unleashing the Power of Innovation and Breakthrough Growth and Innovation (registration may be required).  The Conference Board has also published a nice research piece entitled Growth Readiness.  All of these research reports remind us of the increasing need for organic growth, the importance of innovation for creating growth, and the emphasis executives are placing on innovation.


You knew there was a "but" coming, didn't you?  I've long believed that many executives desperately want more growth, and further that they believe it can originate from innovation.  Unfortunately they aren't quite sure how innovation works.  Many believe that they can simply command innovation to happen in their companies, and it will happen.  Others believe they need to become a Jobsian like visionary, coming up with cool new products and launching them in Vegas.  Others understand that innovation, while necessary, is unusual and different from the business as usual operating models.  These executives understand that innovation is fraught with risk, change and uncertainty.  They go about building a culture and environment where innovation can thrive.  They focus on building processes and skills where innovation can flourish.  The hook?  There are not yet a lot of executives in the third category, regardless of what the research above tells you.  There is still more saying than doing, but fortunately that is changing.

How do I know this?  There are at least three data points I can provide, one of them directly from the PwC research.  If you look closely at the Unleashing the Power of Innovation survey, on page 9 the executives are queried about the factors that make innovation successful.  The usual suspects top the list:  culture, people, ability to take risks, etc.  Note executives rank talent (5%) and funding (1%) low in the list of vital ingredients for innovation. Then, flip over to page 11.  There, the executives are asked to rank the reasons they aren't doing more innovation.  Specifically, what are the constraints limiting innovation?  Top three?  Financial resources, Culture, Lack of Talent.  On the previous question, two of these "ingredients" weren't thought to be important for success.  On the next question they become the reasons why more innovation isn't successful.  Hmmm.

Ask yourself:  what are the primary duties of senior executives?  Aren't they to define strategy, allocate limited dollars and resources, attract and retain the best talent and build an environment where people can be successful?  If you agree these are the primary responsibilities, then the executives are to be held accountable for the success factors and the limitations, especially those having to do with funding, people and culture.  Innovation requires good people, good processes, good skills, and the resources and funding to make it happen. Talent and Funding are factors that are within the control of senior executives.

Beyond the data
Beyond PwC's data I can tell you that while many, many executives are expounding on the importance of innovation, that emphasis and desire meets a much more resistant layer of management two or three levels down, in the so-called middle management layer.  Middle managers are the backbone of the organization, tasked with getting more done with less.  This means they design, build and sustain the most efficient, predictable processes possible, to accomplish the most output with the least input and least variance.  To their ears, innovation is a significant distraction that has little chance of success (on the one hand) and will detract from efficiency and predictability (on the other hand).  In other words, innovation appears as a "lose/lose" proposition for many middle managers, with little potential upside.  I explored this factor in my book Relentless Innovation.  The two factors that are most resistant in any company to innovation are middle managers and the operating processes they sustain, which we called business as usual.

As an active innovation consultant, I query the people we work with who are tasked to implement innovation in organizations.  Uniformly I can tell you that many people hear the demands from senior executives about innovation.  Those demands come in many forms through many channels.  But what the people tasked with developing and implementing innovation don't know could fill baskets:
  • Is the demand for innovation a one-time occurrence (flavor of the day)?
  • Do I have to deliver excellent efficiency in my regular job and disruptive innovation simultaneously?
  • What happens if I try to innovate and I fail?
  • Can you offer me training to do innovation more effectively?
  • Can we create parallel processes so good ideas don't have to be developed and evaluated in the "business as usual" methodologies?
  • How "disruptive" should the ideas be?  Can we innovate outside of our core capabilities?  Can we cannibalize our products or disrupt our markets?
  • How will the innovation be measured?  What are the goals for new products and services?
When people don't have this information, they revert to what they know and trust - the existing processes.  Innovative ideas are often simply dressed up versions of regular projects and products, rather than completely new and different offerings.

What can executives offer to speed and improve innovation?

Executives play a vital role in the development of an innovation competency, but they need to move beyond mere advocacy.  Believe me, we've all understood that executives believe innovation is important.  Now's the time to start putting the Talent and Funding described in the PwC survey in place to support innovation, and to start building a framework that spawns an innovative environment.

Paul Hobcraft and I developed the Executive Workmat to describe the actions we believe executives must take to support innovation.  The Executive Workmat recognizes the gap between what executives want from innovation and what middle level managers and staff are prepared to do.  The Workmat identifies the critical environmental, cultural, structural, funding and measurement factors that are hazy, uncertain or just missing in many organizations.  Using the Workmat as a starting point, executives can build an environment where innovation is more clearly defined, linked to strategy, funded, where the culture is supportive of innovation, where governance is clearly defined and where the activities are monitored, measured and rewarded.  Executives who want innovation have to move beyond pontificating and begin building internal environments where innovation can thrive.  The evidence is clear - executives want and need innovation.  Middle managers and staff are trained, compensated and focused on efficiency.  If the executives want innovation, they need to put as many assets, resources and funds behind innovation as they have (over the past 30 years) for efficiency.  The Workmat is a great place to start to understand the components to build an innovation capability and environment.

We're convinced - now start convincing

Every research paper, survey and annual report convinces us that executives know innovation is vital to their success.  This is old news frankly, and the future is going to place even more emphasis on the important of organic growth, which in turn will increase the demand for more innovation.  In the sales world, this is called selling past the close.  What executives need is to look in the mirror.  What, they should ask, is our role in building and sustaining innovation in our business?  I'll argue that executives have four key roles:
  • Defining strategy
  • Attracting, developing and retaining great people
  • Allocating limited financial resources
  • Building an excellent culture that embraces innovation
The great news is that these are the top four "barriers" to innovation!  If executives want more innovation, it is in their hands to build the strategies, develop the people, allocate the funds and resources and shape the culture to support innovation.

The further good news:  whether your CEO has the power of Jobs to ascertain the future needs of customers, or is more focused on finance, marketing, sales or cost efficiencies, if he or she wants innovation to happen in your organization, it can happen.  But it will take more than simply describing the importance of innovation.  It will take the definition of strategic direction, aligning innovative projects and programs to achieve that direction, staffing the projects and programs with top people who have newly developed innovation skills, building innovation workflow or processes, funding all of this development and, finally, shifting the culture to make innovation appear far more interesting and attractive than it does today.  

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posted by Jeffrey Phillips at 5:32 AM 1 comments

Friday, September 27, 2013

Why innovation needs its own language

I've been fascinated recently by the role that language plays in an innovation activity.  By language I don't mean different languages (Spanish, French or English) but the language we use to communicate the rationale for innovation, we use to create the context for innovation, we use to define the tools, methods and outcomes for innovation.  There, I've done it.  Filled my quota for the use of the word innovation.

As I've written before, the word innovation is so abused and misused it has become almost meaningless.  Or worse, it means whatever the active speaker wants it to mean.  I've been in situations with clients where everyone is using the word innovation, but they have very different perspectives and definitions of what that word means to them, their teams and their products or services.  It's clear we need to start fresh and this shouldn't be a surprise.

When we as humans encounter any significant technological, demographic or social shift, it's common that new words or language enters our common vernacular.  We are undergoing a shift in new product and service development, which is causing us to sound a bit like a parrot who only knows one word - innovation.  What we need is a new innovation language.  We need to define words, phrases and meanings so that our conversations and plans have value, and communicate effectively.  Just as words like tweet, blog, and LOL have entered our common vernacular with the advent of social media, so to do words like incremental, disruptive and open, along with a number of other words and phrases, need to be nailed down, made consistent and used effectively.  Look at just a few commonly used words that are fraught with meaning when used in an innovation context.


If innovation is overused to the extent that it no longer means anything, the word "risk" when it comes to innovation is also misused.  There are many types of "risk" associated with innovation.  The largest risk is the one that is never mentioned.  The most important risk is the risk of doing nothing, of staying the course, of doing what is safe and reasonable.  When we talk about innovation "risk" we talk about the potential for failure of a new product, or missing key features or benefits, or creating products and services that don't have the profit margins that are expected.  There's just as much risk in doing nothing, or in thinking that taking "risk" out of a situation means that we should ensure the ideas are simple to understand and implement.  We can take risk out of the equation by simplifying the product to the point where it is indistinguishable from existing products and services, or we can retain a bigger, bolder image of what the idea can be and seek to eliminate risks or cultural barriers external to the idea.  Defining the notion of risk is vital in an "innovation" activity.


Another failing of our existing language is the narrowing of options.  So many times people will talk about the outcome of innovation in "product" language.  Innovation is capable of much more than simply developing new, tangible, physical products.  Innovation can drive new business models, new customer experiences, new channels, and so on.  When we talk about "innovation" in the context of "products" we are intentionally or unintentionally limiting thinking and potential outcomes.  If your intention is to limit the scope of the activity, then be explicit about that intention.  Don't allow sloppy language to leave your teams in the dark.


Everyone wants "open" innovation, and they are correct in their desires, but hazy on the definitions.  Open can mean anything from asking customers for ideas (a la Dell's IdeaStorm) to close partnering with highly vetted channel partners to working with firms like Nine Sigma to post blind RFPs.  What's typically missing in an "open" innovation activity is the strategy and defintion, not the tactics.  Open innovation, like innovation generally, means whatever you want it to mean.

These are just three commonly used words that have important meaning when used in relation to innovation.  There are plenty more which are misused, and there are instances in innovation where we have no good word to describe what we are trying to do.  Building and analyzing scenarios, there are always "themes" or "threads", but neither word adequately describes what we want to tease out.  During customer research, we hope to discover customer "needs" or desires or gaps, but even experienced innovators conflate "wants", which are aspirational, with "needs" which are more consistent and more basic. 

One other language problem

In business we've become accustomed to language as a precursor to decisions or actions.  That is, from emails to texts to instant messages to staff meetings, much of our communication and hence our language is about actions, measurements or results.  However, much of the discussion about innovation is more focused on platitudes (we need innovation, innovation is a vital part of our business, etc) or pure propaganda, language used to send messages that have no further intent.  Innovation language is often a signaling message to the market, to indicate that we understand innovation is important, but under the covers we'll continue to carry on as before.

This is how innovation loses its meaning, and introduces cynicism and doubt in an organization.  Far too much conversation and communication about innovation is for show, not for go. Words and language lose their meaning and effectiveness when they are used constantly but nothing changes. 


Any organization that hopes to innovate consistently and well has the following challenges with language and context that it must address in order to work more successfully:
  1. Lack of shared meaning
  2. Lack of systemic context
  3. No clear linkage to strategy or goals
  4. Ideas no longer hold their original meanings or the culture rejects their meaning
  5. Language limits or narrows discussion or thinking rather than encouraging and broadening it
  6. Words become filler or placeholders, not meant to encourage thinking or action
What is your innovation language?  Do the words you use have shared meaning?  Do they work within a common context?  Is there certainty and urgency in your communication about innovation?  If you can't get the language right, how do you expect to generate better thinking or improved products?  Everything that we do in a collaborative sense relies on excellent communication.  If you start with and foster poor communication, how can you hope but end up with poor products and services?

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posted by Jeffrey Phillips at 5:36 AM 0 comments

Thursday, September 26, 2013

Book Review: The Year Without Pants

Recent surveys by Gallup have indicated that up to 80% of the American workforce is “disengaged” at work.  That is, these workers, across industries, functions and roles, don’t feel any passion or deep empathy for the work they do.  For many of us, work is simply something to do between 9 and 5, to pay the bills to allow us to do other things we find more interesting.

Other research has demonstrated that where people are truly engaged, some very interesting things happen.  Productivity increases, innovation increases, ideas, products and solutions are rapidly developed which exceed customer expectations.  You may have heard the saying “do what you love and you’ll never work again”, and cultures with high engagement demonstrate this point.  Have you ever heard of a company where employees must be forced to take a vacation, or who travel to exotic locales only to pull all-nighters to deliver a new software feature?

Scott Berkun, in his new book about WordPress entitled The Year Without Pants, has written an interesting book that delves into questions about engagement, especially about the structures and cultures of knowledge based organizations.  It’s hard to know exactly what Scott set out to do with The Year Without Pants.  There are aspects of work as soulcraft (Shopcraft as Soulcraft), aspects of his previous work on project management and some aspects of a first person narrative about work (eg Down and Out in Paris and London).  What I took away were insights and portents about the future of work, especially as three factors emerge: larger firms hollow themselves out through rightsizing and contracting, smart young graduates form their own social businesses and the world turns increasingly to knowledge based businesses.  The question to ask is:  what is the structure and culture of a new, social business that focuses on creating information or knowledge?  Can it have a different hierarchy and structure than the traditional structures of the past?  What type of culture and leadership is necessary to build and sustain it?  And, finally and perhaps crucially, will it scale?

Berkun didn’t know it when he asked me to review his book, but I’ve been through a lot of this change in parallel.  I’ve worked, like Scott in big corporations and in startups.  I’ve traveled through a number of roles and industries, trying to find interesting, engaging work.  I’m a WordPress user and blogger with two active blogs (see Relentless Innovation and Mistakes Innovators Make) on WordPress and one (Innovate on Purpose) on Blogspot.

The Year Without Pants is basically a rolling narrative of a guy with deep project management and corporate roots who becomes a “project lead” for a small but vital web startup.  The difference with this web startup is that it has millions of users and is based on an open source project and mentality, and is more accustomed to rapid, incremental and free form change over the waterfall approach more commonly used in traditional software development.  Berkun’s role is an experiment.  In a company that’s run by the bootstraps, where anyone can publish a feature, where there’s little formal quality testing or user experience design, can a person with little programming skills add value to a programming team?

As a former software guy myself, I marvel at the approach the WordPress team takes to manage its code base.  Automattic, the firm behind WordPress, spends little time on code base management, quality assurance testing, release candidates and user experience, believing it can rapidly prototype and gain feedback rather than plan and create major release candidates.  Given the passion that people have for WordPress and its dedicated followers, their belief in the company and its culture allows it a lot of latitude that wouldn’t be possible in an operating system or financial system, where accuracy and perfection are crucial.

Scott documents his period of time in the new project lead role.  He struggles and adapts to the geographic distribution of his team, with members in Europe, the US and Australia.  Automattic allows employees to live wherever they choose, and in small teams with good communication tools building rapid software releases, it’s possible to exist and even thrive this way.  Due to the distributed nature of the team, however, regular “meet ups” are in order all over the world.  Scott describes meetups in Budapest, New York, Portland, Lisbon and Hawaii.  Clearly it would be difficult for major corporations to send people on week long jaunts to scenic locations, but the Automattic culture is clearly a work hard/play hard culture.  Most of these meetups are like Fedex weekends, where new features are required to ship for WordPress.  They also serve to help bond distributed teams and reinforce corporate culture, and engage local WordPress users.

In retrospect it’s hard to categorize this book.  While it is a very good book and highlights some valuable lessons for business, I’m not sure it is a management tome.  Larger firms can’t replicate the culture or working style that Automattic has, and any firm working in a regulated industry would need far more quality assurance and testing rigor.  Automattic works because its people are so committed, so engaged and so excited about what they are doing.  In a small firm, building and retaining that excitement and engagement is possible, but I doubt it’s possible in a larger organization.  The Year without Pants probably most closely resembles the inverse of Down and Out in Paris and London, in which a person with deep experience takes on a challenging new role to understand a different perspective about work.  The Year without Pants is eminently readable, regularly quotable, and sure to become yet another Berkun classic.  

Berkun clearly likes the Automattic team and praises the culture and management style throughout the book.  While it sounds like an idea place to work, it clearly isn’t for everyone.  Many people crave structure, and order, and predictability that Automattic shuns.  Working in a distributed fashion is possible for highly engaged, highly self-motivated people who are competitive with each other.  Yet many people won’t thrive in that environment.  Berkun never says it directly, but I think he believes Automattic reflects the style of business many millennials will come to embrace, and perhaps he is correct.  In that regard I can imagine many small businesses creating great software and social experiences, but I’m not sure the model scales.  If the Fortune 500 are lumbering dinosaurs, Automattic and firms like it are the new mammals on the scene, waiting to take control of business as the older models die off.  But will there be enough manpower to create enough of these new firms to power an economy, or are firms like Automattic, while interesting, always relegated to be relatively small firms?  And, as the nature of work changes, does size really matter in an economy increasing focused on generating and managing knowledge and social experience?

What is clear is that Automattic, and firms like it, create and engender passion and engagement at a level that larger firms can only envy.  If there’s a lesson in The Year Without Pants, the lesson is that passion and engagement can overcome almost any obstacle.  These attributes create a culture that attracts interested, engaging and passionate people who view their job as a vocation and a calling, rather than a source of a paycheck.  As the boomers and Gen X’s retire from the scene, the way people are included and engaged may transform business as we know it.

This review is also posted on Amazon.
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posted by Jeffrey Phillips at 12:27 PM 1 comments

Monday, September 23, 2013

Indifferent innovation

I wrote my previous post on the willful blindness that settles in on many firms.  In that post, I was writing about the fact that if you are in any business with a tangible product, there's likely to be someone on the internet reviewing it on YouTube or writing a blog about the benefits and issues associated with your product.  Too often, product managers and product developers simply ignore what customers are saying in these reviews.  This is what I call willful blindness - that we ignore freely available and often valuable information from customers.

But most organizations have a love/hate relationship with their customers.  If only customers were smart enough to use the products in the way in which they were designed to be used, everything would be hunky-dory.  What we as innovators need to understand is that instead of ridiculing customers who use products in unorthodox ways or for unintended uses, we should be asking:  why?  Why are people using our product in these unintended ways?  What could they possibly gain from doing that?  And, what could we learn if we'd simply understand that, to misquote Kotler, people don't want drills, they want holes.

Your products and services are merely vehicles to help the customer achieve something or accomplish something.  Every product or service is simply a means to an end, almost never the end itself.  If we can swallow hard and accept that this is close to the truth, then how we help our customers achieve the goals they are setting and accomplish the outcomes they are trying to achieve, we will become a lot more important and valuable in their lives.  What Kotler missed is that when people create holes, they are actually going to fill those holes with something else.  Even the hole is just a means to an end.

Financial Services as an example

In some consulting work we led several years ago, it became clear that many people never receive much education about money management.  When I say money management I mean building a budget, tracking expenses, paying bills on time, and managing day to day cash flow.  I'm not referring to retirement allocations or credit swaps, but the basics of managing money, paying bills, living life day to day.  Our educational system does little to educate people about a vital component of their lives, and the banking and financial system offers little meaningful education as well.  Through our research we recommended to our client (a large bank) that they could enter the educational space, retain their customers who needed more education and win new customers.  The bank's response was that education wasn't their core business.  In that, they were right, but they didn't understand their customers' end goal.  The goal wasn't to save money or pay bills on time or have a checking account.  The goal was to have financial "peace of mind".  If that sounds familiar, it's because that's what Dave Ramsey, the radio talk show host, calls his financial planning program - Financial Peace.

The major banks and financial institutions don't understand that their services - checking, savings, mortgages, auto loans, home equity loans, etc - are simply vehicles to help their clients achieve something more.  Financial peace of mind.  The financial industry organization that ultimately understands this will win many converts.  Yet the banks don't believe education is their "sweet spot" nor their responsibility.  So, many charlatans fill the gap, and a few others like Clark Howard, Dave Ramsey and their compatriots try to fill the void. 

Stop asking about products and start asking about outcomes

What does this all mean?  Why do clients use products in ways we don't anticipate?  Why are their gaps in products and services? 

Because most firms don't understand what customers are trying to achieve.  Most firms focus on what their products do, as if that's what ultimately matters to the customer.  That's a mistake.  A checking account simply helps me pay for things in the absence of cash, but it doesn't provide greater peace of mind or financial stability.  What people want is less anxiety, better money management, improved  control of their finances.  While the bank's certainly aren't responsible for your income, they could help you plan your budgets and your "outgo" in ways that improve your financial acumen.  Sure, we're all interested in paying bills on time without cash.  Checking and automatic transfers accomplish that for us.  But that's a small bore outcome.  What we all really want is more information, more knowledge, more expertise and more assurance that we are doing things that help us achieve longer term goals and objectives.  Innovators must understand that products and services are simply instruments to help get closer to those objectives, or are stumbling blocks to those objectives.  We need to see the bigger picture.

And yes, the checking account guys will only want to focus on the features they can control.  This is why innovation is often so small bore.  Everyone has vested interests in their specific product or service and are constantly trying to improve it, while few people have the larger view of a customer's goal or experience in the aggregate in mind.  You'll need to spawn a completely new effort to understand the customers' ultimate goals, which may create new needs or insights for the checking team, as well as the branch team, and so on.

Do you love or hate your customers?

There's an old quote that says that the opposite of love isn't hate, it is indifference.  Most firms don't love their customers, they don't engage with them enough to know them that well.  And they don't hate their customers, although they may ridicule the way customers use their products, or the questions they ask in support calls.  The problem is that many firms are indifferent to their customers, especially indifferent to what their customers are trying to achieve.  We think in minute detail about how a customer uses our product, but fail to see the bigger picture about what the customer is actually trying to achieve.  Only when you understand the larger picture will you win your customers' respect and love, and truly understand how to create really new and interesting products and services.

As innovators, we need to understand what the customer's ultimate goals are - what they are trying to achieve.  To use the financial services example again, few customers really care about their checking account.  Checking is just table stakes.  It needs to work, and work flawlessly.  If you can create some minor improvements, great.  But think about how financial services fits into the totality of what a customer is trying to do, and what financial services firms could offer to help the client meet those goals, then identify the various new products, services, experiences and features that flow from that insight. 
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posted by Jeffrey Phillips at 7:17 AM 0 comments

Friday, September 20, 2013

Your customers will tell you what they want

If you work in product or service development, and a customer called you up to offer suggestions for improvements to your offering, would you listen?  Of course you'd weigh the feedback.  Does the customer have insights that are new or unusual?  Are they repeating some of the same things you've heard before?

What would you do if a customer created a series of videos about your product, how he or she uses the product and posted them on Youtube?  Would you want to know about those videos, understand the way in which your product is presented?  Would you want to co-opt the presenter, and work with them to improve your product and how it is presented?

Would you consider watching these unfiltered videos and take them for what they are - customer feedback and potential opportunities for insights into unmet customer needs and potential workarounds?  Because if video exists on the web of customers use or commenting on your product, you should be watching that video and paying attention.  This is an example of customers giving you a doorway into their world, unasked and unfiltered.  As Yogi Berra once said, you can observe a lot by just watching.

The origin of my latest rant

Recently I was leading an idea generation session with a client.  To prepare for the event, I looked up the product in question to see if there were sites where customers were talking about the product, its features and potential shortcomings.  I came across a series of videos by a young customer who was "reviewing" the product and talking about its use.  Curious, I brought the video up before we started generating ideas.  Who, I asked the attendees, has seen this video?  Out of 15 people present, only one had seen the video.  Everyone in the room had direct or indirect responsibility for marketing, product design and product development of the product family in question.  Thousands of dollars have been spent to learn more about customer needs.  Surveys have been taken, research conducted.  Yet only one person had bothered to find the research that was freely available.

When we watched the video I watched the attendees.  They laughed at the funny parts, grimaced at the gaps or negative feedback, and seemed relatively satisfied with the review.  Then I asked them - what did you notice about the use of your product?  What was missing?  What was unusual?  What workarounds did the reviewer create that overcome shortcomings in your product?  Suddenly everyone perked up.  A few even had ideas about how to change the product based on what they'd seen.  Yet no one in an experienced team had bothered to ever look for customer insight that was freely available, and fairly insightful.

Orwell had it right

One of my favorite writers is George Orwell, because he wrote with such direct force and simplicity.  He felt that a writer should speak directly and avoid useless words that dilute meaning.  He also believed that many people are easily distracted from what are simple truths.  His saying "To see what is in front of one's nose needs a constant struggle" is applicable here.  What he meant is that the truth is often right in front of us, but we are so busy, or so predisposed to other information or perspectives that we miss the truth.

Innovators often speak about obtaining customer needs, but many innovation teams are filled with people who rarely, if at all, interact with customers.  They are more comfortable reading third hand reports from consulting firms or marketing agencies than they are interacting with customers.  Because customers tend to be frank about what works, and what doesn't, with your product.  This fear of engagement leads to obtaining insights from filtered sources rather than engaging and understanding at the depth necessary.  There's a lot to learn at the coalface you can't understand at the head of the mine.

What also floored me is how many of the people watching the video of the customer using the product commented on how he was doing it "wrong".  Wrong in terms of their understanding, or their design of the product.  Only one of the people in attendance was an actual user of the product, and he remained silent.  Others commented on his preparation, his usage and his commentary.  Rather than listen and learn to an experienced user who is taking time to review and comment on a product, many suggested his insights were simply wrong.

What are your customers telling you

What do your customers tell you, and in what channels?  Customers are clamoring to tell you what works, what doesn't and what's missing in your products.  They are willing to talk to you if you are willing to listen.  They are tweeting, posting on YouTube, writing on blogs, calling your support lines.  They stand ready and willing to share their insights with you.  What's holding you back?

Fear of what they'll say?  Inability to react to their suggestions or ideas?  Simply too busy to spend time watching a video of a customer using your product?  Or are you unaware of all the insights that are provided daily about your product in the social media stream?  Just because you aren't listening doesn't mean they'll stop talking.  Eventually they'll start talking to your competitors, or creating their own solutions, or pointing out the weaknesses, not the strengths of your product.

What do you need to do?  Engage first.  Let them know you are listening.  Listen to what they say, and what they don't say.  Don't reject insights or comments but learn from them.  Reap the insights and ask for more.  This is free customer research of the best kind.  Set expectations - not every idea can be implemented, but work with the people who are active to ask them to pilot new products, give feedback.  Create your own media partner.  Or, just ignore them and they'll go away.  Mostly to your competition which is smart enough to listen and respond.
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posted by Jeffrey Phillips at 9:04 AM 0 comments

Thursday, September 19, 2013

Innovation that's too big to fail

The banking sector in the US has a problem.  Years of consolidation have led to a few large banks, which slowly over time have expanded into non-bank-like businesses.  These banks became the center of the banking crisis just a few years ago, and spawned a new phrase "too big to fail".  The idea behind "too big to fail" meant that the bank was so entwined with other businesses, other banks and in some cases entire industries that if one of the large banks failed, that failure could spark a domino effect in the banking world, leading to significant problems out here in the "real world".  Large banks were coddled because of the threat of financial collapse.

Perhaps it's time innovators learned that lesson.  Far too often we allow our ideas to become "too small to matter" rather than too big to fail.  Here's what I mean.

Too small to matter

When executives identify the need for new "innovation"  they create a nebulous request for something new - a new product, a new service, or so on.  That request for something new is then subjected to existing corporate culture and language, which means that many teams of people refine, reform, condense and package the initial request into a project statement.  That project statement must fit within the bounds of the existing corporate framework, risk tolerance, investment models, staffing levels and so forth.  Typically, by the time the proud project team presents the project plan to the executive who requested something new, the concepts are safely limited, carefully packaged and often too small to fail.  That is, as much of the risk that can be removed has been removed, and the concept is now so carefully defined that the team can't possibly fail to deliver SOMETHING.  Whether or not they deliver anything meaningful is a secondary concern.

We accept this process for several reasons.  First, it allows teams to "do" innovation within the confines of the existing processes and frameworks.  As I've said before, only two things can happen with innovation:  either the ideas change the culture and process, or the culture and processes change the ideas.  The overwhelming percentage of ideas end up getting changed by the process.  Second, most organizations are bred on success.  They live in a constant striving stew of success.  The more we define the idea to make it "successful" in our terms, the better everyone likes it.  No one wants their name associated with a project that won't be successful, so everyone tries to ensure the idea can be successfully developed and deployed.  Whether it's a success in the marketplace is another consideration, and will happen far in the future, when many of the participants are on to other things.

When you look at your innovation pipeline and are dissatisfied with the incremental nature of the ideas, you've accepted the concept that innovation should be successful a vast majority of the time, should fit into existing frameworks.  When that happens, your ideas are too small to matter.

Too big to fail

What innovators need are bigger horizons, not smaller frameworks.  We need to define ideas that have real value propositions, that create new market segments or solve "wicked problems".  Those ideas should be so compelling that they become too important to everyone in the organization, and too valuable to compress or reduce.  We need to mimic the banking industry and create ideas that have such integrated value, such promise to the business that they become too big to fail.

The question is:  how does a company based on maximizing efficiency and minimizing risk create such sweeping ideas?  Actually the creation of such expansive ideas is easy.  What's difficult is defining an expansive scope and keeping the scope of the idea the same when so many factors within the organization will attempt to reduce the concept, chip away at the size and scope of the idea.  Too many people representing too many functions or factions have a stake in the status quo and will seek to defend their functions or turf from any new implementation or change.  The culture will reject really radical ideas like antibodies working on a virus unless someone steps in to defend the radical idea and its breadth and scope.

The only way ideas become too big to fail and remain that way is when senior executives all agree to embrace the idea and support it not just at conception, but through development and launch.  It's always been my suspicion that this was behind what Jobs did at Apple, when he drastically cut number and range of products at Apple.  When you have very few products or capabilities, they become too big and important to fail.  Everyone has a stake in the success of the limited number of big projects, and the decisions of executives and the actions of the culture become much more amenable.

Now I'm not suggesting that the only way to define and sustain really radical ideas is to drastically cut product depth and breadth, but senior executives need to understand that if they want big ideas, they have to create the conditions in which those big ideas will succeed.  While there are several ways to do that, including creating a more engaged, nimble and paranoid culture, sometimes creating ideas that are just too big to fail is the answer.
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posted by Jeffrey Phillips at 6:24 AM 2 comments

Monday, September 16, 2013

Innovation under the covers

For all the talk about innovation, it remains a very secretive activity.  Executives expound the need for innovation in public, in annual reports and in business journals, but most actual innovation work when it is conducted is hidden, isolated in small teams and kept quiet. 

There are a number of reasons for what I call "innovation under the covers".  First, every firm wants to be viewed as an innovator, so it pays to talk about innovation externally, regardless of what you are actually doing internally.  Second, innovation is risky, so rather than make a big, public bet that may fail, executives are often willing to allow innovation to happen, but in a quiet, discrete way in case it doesn't pan out.  Third, many people are convinced that innovation will lead to new intellectual property or other artifacts or information that should be protected, so innovation is kept quiet in case it generates interesting and valuable ideas.  Fourth, every innovator is convinced that if other firms discover what they are doing, competitors will quickly respond with copycat solutions.

Each of these arguments for secrecy seem valuable, but the reality is that innovation, like information, wants to be free.  What appears to be safe and careful approaches actually work in opposition to good innovation.  While executives may want to keep innovation quiet to limit damage if innovation fails, the organization reads this as a "sideshow" that the company doesn't have deep confidence in.  The more innovation is isolated and hidden, the less involvement, the less engagement and the more skeptical the rest of the organization becomes about innovation.  While innovation may occasionally lead to new intellectual property or trade secrets, once a new product or service is launched it will be reverse engineered.  There are valid reasons to keep intellectual property, especially patentable concepts under wraps, but with the new first to file methodology there's less pressure.

Don't worry about people stealing your idea

One of my favorite quips about innovation reflects the concern that people may "steal" your idea - that saying goes something like this:  "Don't worry about people stealing your ideas.  If your ideas are any good you'll need to ram them down their throats."  Good ideas - excellent ideas even, are often simply lying around waiting for someone to implement them.  What this means is that the best ideas are often so revolutionary that they are rejected by the vast majority of people when they first learn about them.  And, given the lethargy of most development processes and the slow decision making endemic in most firms, no firm is going to respond too quickly.

I've argued for quite some time that the real need where innovation is concerned is speed and agility, not isolation and constant review.  The ideas, as they say, are out there.  Any need or opportunity that you've identified has probably been noticed by someone else.  What is it about your innovation methods or processes that ensure you get to the market first, with the right solution, versus your competition?  Doing innovation under the covers, secretive and slow, simply means you'll probably miss the market window, and others who are identifying the same needs but who speed to market, regardless of who knows about their innovative idea, will win.

Sunshine is a great disinfectant

Political reformers like to say sunshine is the best disinfectant.  What they mean is that open communication and transparent policies lead to decisions that are broadly beneficial to everyone, and closed door, secretive meetings and decisions often lead to surprises and decisions that benefit a few.  I think we can take a lot of lessons from the idea of sunshine.  Far too often innovators who are kept under the covers surprise their counterparts inside an organization, who immediately resist the ideas because they were unaware or not part of the process.  Interestingly, those same ideas that so disrupt internal teams and processes often fail to provide meaningful benefits for actual customers, because they don't address key customer needs.  By keeping the process and ideas secret, customers were left out of the equation, and find little of value in the new products and services.

So, in effect, we have the worst of both worlds.  Ideas that cause internal disruption because they were created in secret, which make barely a ripple in the market, because they were created in secret.  Shouldn't this be the other way round? Shouldn't we seek to disrupt markets with compelling products that our internal teams fully support?

The few, the proud

One other failing of the "under the covers" approach - it limits the number, breadth and depth of ideas you can consider.  Many innovation programs have a process for managing ideas you could label the "few and proud" since they only have bandwidth for a few ideas and they are very proud of them.  Once again, the under the cover model for innovation imposes limits, limits on the number of ideas that can be considered, limits on the number of concurrent activities, and, with limited external information, limits on the amount of information we have about our ideas.  Your secrecy is limiting your ability to innovate, at a time when speed to market is far more important than secrecy.

From top to bottom we can create a rationale for more openness.  When you work on incremental ideas to existing products, many of the new features and potential benefits should be relatively obvious to your customers. In fact they've probably asked for them.  When you work on truly disruptive ideas, you should be using insights from customers about unmet needs.  Your competitors are doing the same things - or ought to be.  If your ideas are truly unique, valuable and interesting, you'll struggle to get your internal decision makers to agree, much less have to worry about your ideas being "stolen" by competitors.  If your competitors are smart enough to monitor what you do, then beat them with better innovation capability and speed.  In many cases, they aren't watching you that closely anyway, and can't respond quickly enough to matter even if they are.
Don’t worry about people stealing your ideas. If your ideas are any good, you’ll have to ram them down people’s throats. - See more at:
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posted by Jeffrey Phillips at 5:08 AM 1 comments

Tuesday, September 10, 2013

Why innovation must become business as usual

Lately it has been interesting watching innovation project begin in our clients.  There's really nothing new to report.  Typically what happens is that an executive becomes convinced that a market opportunity exists which must be filled, or that a competitive move must be countered.  There's a lot of discussion about the size and scope of the need or opportunity.  Then, one executive or senior leader becomes the advocate for the innovation opportunity.

After that, there's the typical work associated with any project:  building a plan, finding the right people to staff the activity, defining the scope of the work and anticipated outcomes.  Of course where innovation activities are concerned, this often means training the team to improve innovation techniques and skills and expanding the typical scope of work to include more disruptive ideas.  For every innovation project, however, there are corporate and cultural resistors.  These take the form of people who feel threatened by the scope or perhaps that the scope invades their turf.  These also take the form of people who believe their priorities should take precedence over the innovation activity, or who need the resources the innovation project is using.  These also take the form of corporate resistance to change and the fear of risk or failure, especially when targeting uncertain new needs or customer segments.

So, while an innovation project is often very similar to any other project at the macro level, it is exceptionally different from traditional projects at the micro level, and runs into much more resistance. That resistance comes from the mere fact that innovation is new and different, that the project may expand the scope of the product or service portfolio, that the outcomes are risky or uncertain, that the outcomes may cannibalize existing products, that other priorities were pushed aside to focus on innovation, and so on.  The amount of corporate fear and inertia is significant, and unless the team can overcome this resistance and inertia the innovation project faces limited potential scope or even failure from the start.

Now, compound this reality with the fact that innovation is increasingly more important, and needs to be accomplished more consistently and more frequently.  As competition increases, consumer demands increase, trade barriers fall, creating new products and services becomes ever more important.  Add to that fact that product lifecycles are decreasing, which means products must be replaced or at least reconfigured far more frequently than before.  When you add up all of the facts, it's clear that any firm must step up its innovation activity in order to remain competitive.

But we've demonstrated earlier that innovation projects face more fear and inertia than other projects and that means the projects often decrease scope or even fail to launch successfully.  In other words the cultural resistance and inertia is often limiting innovation at a time when innovation is ever more important.  What to do?

We've got to find a way to reduce corporate resistance to innovation, and remove or eliminate the inertia that many corporations retain.  While successful companies may feel secure with existing products and market share, that security is a myth.  Much of what the resistance and inertia is based on is on protecting a customer base and market share that is under constant attack.  Taking a reactive mindset and resisting change is counterproductive.  Good innovators already understand this and take the fight to the market through proactive innovation.  Good innovators don't hunker down, defend share and resist innovation.  On the contrary they attack adjacent markets and rework their products to keep competitors off guard and uncertain.

Corporate cultures have been allowed to become slow, comfortable and resistant to change.  We've got to rethink and rework corporate cultures to become more nimble, more hungry, more aggressive and open to embracing change.  As comfort levels rise and defensive mindsets creep in, inertia and resistance to change and uncertainty has permeated many firms.  The most common word in annual reports is "surprise" - too many firms are surprised by competitors, surprised by changes in their markets and competitive positions.  Rather than being surprised, these firms should create the change, introduce the innovations.

The only way I can imagine that these things happen is that corporate cultures embrace innovation as a regular, day to day occurance rather than an occasional, sporadic and problematic event.  This means the cultures must become far more comfortable with change and uncertainty, and that resistance levels fall.  Further, firms must become less celebratory and comfortable with their competitive positions.  Andy Grove became famous at Intel saying Only the paranoid survive, and he wasn't far from the truth.  Newton is right - objects at rest tend to stay at rest.  We need more, and more consistent, innovation motion to avoid inertia.  And, rather than the start and stop model we've used to date, which simply means each project faces the same inertia each time, we need a culture and capabilities that sustain innovation momentum over time.  Innovation must become business as usual, otherwise each and every innovation activity will be subject to resistance and inertia, which waste time and effort, reduce scope and threaten the success of each project.

Few firms enjoy kicking off an innovation project because they know the amount of resistance and inertia the activity will encounter.  As projects encounter the inertia, a significant amount of energy must be used to gain momentum.  Executives often aren't willing to provide the necessary energy to overcome the inertia, because that expenditure of energy comes at a cost - a funding cost, a status cost, a credibility cost.  These tangible and intangible costs matter.  We must lower these costs by reducing cultural resistance and corporate inertia, through better strategy definition, better communication, better innovation processes and outcomes.  Without consistent innovation, a corporation is basically defending a shrinking position.  The more its position shrinks, the harder it will be to consider the radical alternative, to take a new and better position.

Until and unless innovation becomes business as usual, reducing cultural resistance and removing or at least reducing corporate inertia, every innovation activity will be difficult and face unnecessary obstacles.
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posted by Jeffrey Phillips at 7:56 AM 0 comments

Wednesday, September 04, 2013

Is innovation generational?

I've been thinking a lot about the reasons why innovation seems so important and pervasive, and equally so poorly implemented.  Everywhere I go, executives are talking about the need for more innovation.  Elected officials at the federal and state level praise innovation.  CEOs and senior executives extoll the importance of innovation.  Entrepreneurs talk about innovation as the lifeblood of their businesses.  Yet for all the talk about innovation, there's a huge gap between what gets talked about and what gets done.  Too often, while innovation seems important, executive teams are distracted, multi-tasking, or feel that the competition isn't as compelling as we think it is.
Some of this thinking I believe is generational, shaped by the boomer generation, which controls much of the managerial and executive class in the US today.

Fairly or unfairly, the boomers have come in for some close examination as a cohort.  Clearly not every boomer reflects all of the flaws associated with the boomer generation, but as a whole the boomers are often thought of as acquisitive, self-involved and coming of age when a lot was made available to them and not much was asked of them.  This made me wonder - is innovation generational?  By that I mean are the baby boomers more or less likely to innovate than generations before them, or after them?  Then I thought, why not explore the idea?

For the record, I'm a tweener - born at the very end of the boomer generation and the start of Gen X.   Never really felt at home in either camp.  And this exploration isn't meant to say that boomers are bad, per se, or that Gen X or the Greatest Generation are good, necessarily.  Just to explore the settings in which each generation emerged and what shaped them.


Boomers, you'll assert, are clearly good innovators.  Why, look no further than Steve Jobs.  Jobs was clearly a boomer, and there has been a tremendous amount of innovation over the last 20 years as the boomers took power in corporate America.  Yes, there has been a burst of innovation, but the vast majority of businesses today are headed by boomers, and the focus I find most often is in taking profits, cutting costs and living to fight another day rather than creatively exploring customer needs, developing compelling new products and exploring adjacent spaces.  Jobs is renown perhaps because he is an exception rather than the rule. 

Boomers may be poor innovators because they came of age at a time when the US was pre-eminent, when the economy was on the upswing.  Remember the movie "Wall Street" and "greed is good"?  Our stock market has swung upward dramatically, and at points in the 80s and through the 90s it felt as though the US had no competition.  There's no rationale to innovate when the competition is low and you are on top.  The boomers to the greatest extent have never experienced a truly competitive market, known hardships or had to fight for market share.  From the end of World War 2 to the end of the 90s, the baby boomer generation, at least in the US, has had its own way.  And I think that makes the boomers too self-satisfied, a bit too arrogant.  I remember people from my parents generation being uncomfortable with DINKS (Double Income No Kids) and Yuppies, thinking that these cohorts acquired wealth too easily, that they were too self-important and too self-satisfied.  Those aren't factors for innovation.  Of course not all boomers reflect these values, but as a whole the boomers were given a lot, and in many cases have acted to protect what they have rather than expand the pie.

Greatest Generation

Compare and contrast with the previous generation, the Greatest Generation.  These were the folks who came of age during the Great Depression and World War 2.  They lived in a time when many people weren't certain where their next meal was coming from.  They lived in a time of incredible uncertainty, between the rise of Nazi Germany and the subsequent rise of Communism.  These are the folks who put a man on the moon, who created many of the technologies that we take for granted today.  Their investments and sacrifices built a platform of technologies, systems and communication structures that we still use today.  They built the internet - or at least all of the critical pieces.  They put a man on the moon.  Their innovations power what the boomers did, and more.  They were curious, engaged, and had a great sense of community.  They knew hardship and worked hard to make their lot better.  Many started with little or nothing, then fought in a vicious war, then returned home to go to college, get married, start a career.  Their investments are what fuel much of what we do today.  I think their experiences created a cohort that was willing to struggle, willing to invest and face hardships, knowing that in those hardships and investments the future would be better.  Their attitudes were perhaps a bit conservative but always optimistic about the future.  America had a campy but "can do" spirit from this generation.

Gen X and beyond

Will the innovation and creativity pendulum swing back in the subsequent generations?  Is innovation a generational commodity?  Are generations more or less innovative based on their experiences as a cohort?  Gen X and the generations that follow them in the so-called Baby Bust after the Baby Boom are quite different from the Boomers.  They are less acquisitive, more concerned about each other and society and the environment.  They appear to volunteer more, and to be more socially engaged.  They've turned away somewhat from the overabundance many boomers seem guilty of - have you seen the TV show Storage Wars or Hoarders - and appear to maintain a more sedate pace of life.  Yet they are very interested in solving important problems, and we need them to get engaged in government, in academia and in industry, to revitalize and rethink structures and models.  After almost 50 years (1950 - 2000) the world is very different from what is was, and it remains to be seen if Gen X can be and will be as innovative as I think the Greatest Generation was.  They have the passion and energy that frankly I think is spent from the boomers.

Gen X and subsequent generations face a very different current and future environment. While the US economy is still strong, China is growing quickly and many other emerging economies seek a voice in the global economy.  Competition is fierce and partnerships are changing.  The US economy and the stock market are far more volatile than before, and many markets are saturated.  To make a "dent in the world" Gen X and beyond are going to have to create ideas and solutions that are noticeably different.

So where does that leave us

Currently, many senior executives are boomers.  They were born and raised in a period when the US was pre-eminent, could do what it wanted, had few competitors.   When you are on top, innovation isn't important, but staying on top is.  You reduce risks and keep profits high, to increase stock price and compensation.  Over the last 30 years we've had successive management fads including TQM, BPR, Outsourcing, Six Sigma, Lean, Right Sizing and so forth.  All in the service of profitability and efficiency, not in the service of innovation.  The more efficient companies become, the more risk averse they become, and boomers have never really experienced struggle or risk.

In addition, boomers I think are easily distracted, believing that they can successfully manage many competing priorities, when in fact they are often distracted by the urgent at the cost of the important.  That's not a failing just of the boomer generation, but I sense that boomers are perhaps more susceptible, given their belief in themselves and the fact that they've had a great half-century with less strife.  What will Gen X and subsequent generations look like, given social media, texting and the "always on" lifestyle?  Will that make them more socially aware, better at understanding needs and better communicators, or simply distract them even more?

In the end I do think innovation is generational.  Each generation is shaped by its environment, its experiences.  Those lessons, and the context in which the generation comes of age, the competitive landscape, the ethos of the group, shapes its ability to innovate and the choices the group makes when it has an opportunity to innovate.  I think Gen X and beyond are coming of age at a time when competition is intense, the US is a leader but not so pre-eminent, and there are many more emerging countries with far more capabilities than when their parents came on to the scene.  This heightened competition, and to some extent a rejection of the way boomers lived, may create more and better innovators.  Time will tell.

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posted by Jeffrey Phillips at 6:22 AM 1 comments

Tuesday, September 03, 2013

Innovation's Burning Platform

I write frequently, and counsel our clients repeatedly, about the need for a "burning platform" for innovation.  That is, a compelling need or opportunity that the executive team can define and communicate, that is urgent and important to the business.  A burning platform is often the best way to overcome corporate inertia and get a business moving into the more risky territory associated with innovation.  Without a burning platform, a compelling opportunity or reason, many corporate cultures simply won't embrace innovation.

That's why I thought it was interesting when Stephen Elop became the CEO of Nokia and declared that Nokia faced a "burning platform".  Just over two years ago, Elop became the CEO of Nokia at a time when Nokia was losing the mantle of cell phone handset leadership.  Elop wrote an open letter to his employees at Nokia, talking about the burning platform.  Nokia's dominance in cell phone handsets was at risk, and he was trying to create more awareness and emphasis.  Today, Nokia is the number two worldwide supplier of handsets, but barely registers in the smartphone market, where the majority of the profits reside.  The news today (September 3, 2013) is that Nokia will sell its handset division to Microsoft.

Letting a crisis go to waste

Rahm Emanuel, who was a key advisor to President Obama, was only the last in a string of executives who stated the obvious:  you don't want a crisis to go to waste.  In other words, use the crisis to create the change you need.  Elop did create some change.  He "bet the farm" on Microsoft's wireless operating system, when the other major players were going with Android, except for Apple of course.  In addition he focused on cutting costs, and cut a significant amount of costs out of Nokia's business.  But the drop in sales was actually faster than his ability to cut costs.

I'm going to argue that Elop let a crisis go to waste.  In a critical time when he had the attention of Nokia, he bet on an outside partner (Microsoft) that had little cellphone experience rather than bet on his own people to create something innovative and meaningful.  After making the bet on Microsoft, he then proceeded to cut costs rather than focus on meaningful product or business model innovation.  When he declared a burning platform, he had the mindshare of his employees, the impending change to overcome any corporate resistance to innovation and a storehouse of really smart, committed people.  Nokia could have become the innovative alternative to Apple.  Instead, Elop chose to outsource the operating system to Microsoft, forcing Nokia to become basically a hardware provider.  Once Nokia became a hardware provider, Elop focused on cutting costs rather than creating innovative handsets.  Now, both options have run out of steam.  Nokia has lost any hope of software leadership by banking on Microsoft, and has cut costs and people so quickly that significant innovation in the handset is off the table.

Money can't buy innovation

The second fallacy with this proposed merger is that while Microsoft may have money to burn, money by itself doesn't buy innovation.  Often the reverse is true.  Apple may be a telling story in this regard.  When Steve Jobs returned to Apple, Apple was approaching bankruptcy.  It faced its own "burning platform".  Jobs cut the range of product lines drastically and in addition started focusing on new innovative products - simultaneously.  This is what Elop and Nokia missed from the Jobs story - simultaneously cutting products and at the same time ramping up innovation.

No matter how much money Microsoft may have, merging a handset developer with few ideas and little innovation momentum with a software platform that to date has been rejected by the market doesn't add up to better products, better business models or innovation.  Nokia and Microsoft, while they have been partners, have different worldviews, different perspectives (North American and European) and will take time to merge to create anything new.  Meanwhile, Balmer is preparing to leave, and a scramble will soon be underway to sort out his successor.  If this seems like an awkward marriage of two suitors who lack innovation, and whose focus will be on internal integration and potential succession rather than innovative new software and handsets, you are probably right.

The most significant barrier to innovation in the proposed merged business won't be money, or technical capability.  It will be culture and arrogance.  Linking two companies that have traditionally been market leaders who don't listen to customers, will result in a larger, more distributed company with poor communication internally and no external capability to understand or assess customer wants and needs.  The ability to listen, and the capability to become a bit humble and naive about the markets are in high demand right now.

Setting fire to your own house

Perhaps in the end Nokia will be a case study of a firm that like Icarus believed they could fly and flew too close to the sun.  Many industry leaders become a bit arrogant and complacent, and are disrupted by new entrants they don't anticipate.  Many people don't know that Nokia experimented with touch screens similar to Apple's iPhone long before Apple did, but the idea was shot down within Nokia.

Nokia didn't become aware of its predicament until the platform was on fire.  It's an interesting object lesson, and one many innovators should take to heart.  Perhaps the job of innovators and senior executives (should they be different?) is to start lighting your own house on fire, to remind people that product dominance is not a given, not guaranteed, and any firm on top or near the top is there only temporarily unless they find ways to obsolete their own products and create new ones far faster than competitors.

Innovators, there are several key points here:

  1. Use an event or market condition to create a burning platform for change
  2. With that burning platform in hand, align your goals and resources for innovation
  3. Don't let a burning platform go to waste
  4. Change the culture, not just the products
  5. Don't expect to "buy" innovation.  It comes from insights, trends, understanding customers, not from technology or past history
  6. Set fire to your own platform before someone else does.  Don't get too comfortable.
  7. If you choose to "outsource" critical innovation differentiators (Nokia did with Microsoft operating systems) you'd better double down on innovation in something else that matters to customers.

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posted by Jeffrey Phillips at 6:27 AM 0 comments