Wednesday, September 16, 2015

what is your innovation legacy?

As someone who styles themselves as an innovation consultant, I'm constantly asked about the difference we've made in the corporations where OVO has worked.  Recently, in a meeting with potential clients, I was asked about past experiences.  I classify them in three categories:  unabashed successes, short term successes and utter flameouts.  Of course, as a good consultant I took credit for the first two and divorced myself from any involvement in the third!

If you are interested in what made the differences, read the paragraph at the end of this post.  Because this post isn't really about me, or OVO or our successes.  It's about how you.  Specifically, how you should be evaluated for your next role, regardless of the position or level or authority.  You see, innovation is no longer a nice to have, or an occasional experiment or a "flavor of the month".  As fast as things are changing, as quickly as industry barriers are falling, as fast as new entrants can gain access to your markets, you have no choice but to innovate.  Soon, and very soon, you won't be asked about your day to day expertise or experience.  You'll be asked about your innovation capability, and what you can point to to demonstrate that you can innovate.  In other words, you'll need to create a viable innovation legacy.

We've got some questions for you

In your next job interview, your next chance for promotion, you are likely to be asked not only about balancing budgets, increasing sales or cutting costs, but also about your ability to innovate or to lead others to innovate.  Those questions will include some or all of these:

Did you:
  • Introduce innovation tools and methods
  • Train your employees on innovation tools and processes
  • Implement innovation best practices
  • Sponsor innovation projects
  • Identify needs and convert the needs into product designs
  • Commercialize a new product your team identified
  • Commercialize a new product that a consultant recommended
  • Partner with leading technologists to commercialize IP you purchased
  • Seek to gain innovation skills or training for yourself
Or, worse, will you simply state that innovation "wasn't your job" or " your management didn't encourage it" so you didn't feel it was important?

How valid will that argument be?  Leaders, or people who style themselves as leaders, find ways to get important things done, either by taking risks or convincing others of their vision.  If you are seeking a leadership role and can't point to successful innovation, then you probably aren't much of a leader.  If you aren't vying for a leadership position, then you may be asked about your personal creativity and innovation skills. What have you done to improve your skills, learn new innovation techniques?  If you aren't actively preparing for your own future, how can you be trusted with the development of another company's future?

What will happen in your next job interview, your next chance for promotion, when the hiring manager or talent management consultant asks you the fatal question:  "describe your experiences working in or leading innovation"?  Will you have a legacy to point to?

Top down or bottom up

I can hear you now, yes, you with the steam coming out of your ears.  There are powers that are simply too strong to overcome, cultures too resistant to change, that you simply cannot overcome.  It's far easier to simply get in line than to demand new skills or attempt overt innovation.  After all there's no time, no resources and no direction.  We simply all salute and go back to our day jobs, all the while grumbling that no one ever lets us do innovation.

This attitude assumes that innovation is specifically a top-down enterprise, but as we all know corporate change and innovation can be spawned at any level in the organization by people with vision and passion.  If that assertion is true, what's holding you back?  The future is clear - people who are connectors, who have creativity and passion for new ideas, who experiment, explore and discover new needs and new ideas will be in demand.  The folks who have these characteristics and understand how to put them to good use will be highly valuable.  This isn't some mystic prognostication from the corner psychic - this is straightforward insight based on real economic and business trends.  In the future, you'll be innovative, or you'll be toast.  What innovation legacy are you creating, and what can you demonstrate that proves your innovation bona fides?  If your answer right now is:  not much, get cracking.  It will matter sooner than you think.

What you can do depends to some extent on your position, your role and your industry.  At a minimum, ask to get all the training you can get and focus that training on creativity and innovation.  Implement the skills you learn even on day to day tasks.  Be known as the "innovation" guy or gal.  Establish yourself as an innovator.  Identify others within your organization, or better yet outside of your organization who share the same passion or zeal for innovation.  Build your legacy right where you are.  Volunteer for any interesting, innovative or creative assignments.  Propose new projects based on innovation themes or concepts.  As the man said, do something, don't just stand there!

Successes, short terms success and flameouts

If you've read this far, then here's the answer to what I consider an outright success, a short term success and a flameout.

To us at OVO, outright successes are clients who embed innovation in their everyday practices and processes, who train people to become better innovators and who conduct innovation long after we are gone.  They have adopted the knowledge and skills and are capable to do it for themselves.  They are successful not because OVO consultants are geniuses (in truth they are) but because the client personnel and their management had a deep desire to become more innovative and were willing to invest the time and energy to gain the skills.

Short term successes are those clients who have asked us to help them with one specific project - not to transfer knowledge but to simply create new ideas for one specific need.  We never consider this a total success, because we know that most of those clients do not have the skills to repeat the activity successfully, but some clients only want innovation as a project, rather than as a capability.

Flameouts happen, and we've experienced them, when innovation is a box checking exercise that was dictated by a senior executive who needed to demonstrate to someone that they were "doing" innovation.  Everyone understands that the innovation activity is for show, and they go through the motions until the budget runs out.  And yes, we've had the unfortunate experience to be part of these kinds of projects as well.  And we've gotten a lot better at sniffing them out so we can avoid them if possible.
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posted by Jeffrey Phillips at 6:08 AM 0 comments

Monday, September 14, 2015

Why Musk and Branson are the vanguard of new innovation

I was thinking over the weekend about cavemen.  Recently, archaeologists discovered a cache of bones in a cave in South Africa that could represent an entirely new hominid.  While the discovery itself is interesting, what I'd like to think about is how cavemen innovated, and what that may tell us about how we innovate today, both in terms of the nature of innovation and the pace of innovation.

Think about our first ancestors.  At some point they were without tools, using their hands or fists to defend themselves. Then one day a long time ago one of them picks up a bone or a tree branch to defend itself, and the club was created, probably one of the first tools ever invented.  But here's where it gets interesting:  how long did it take to invent the club, and how long before another invention was created?  I'd like to argue that the nature and pace of innovation is always accelerating, and is evolving more rapidly as we have more and more information around us.  But there's another point to consider:  the nature of incremental versus disruptive innovation.

Take this last point for example.  If all our ancestors pursued was incremental innovation, then we'd have constant small improvements in clubs, and no other tool or weapon.  Today we'd go to war with highly evolved clubs.  Innovation happened when the first ancestor created a club, but it didn't stop there.  Eventually another ancestor decided to sharpen one end of the club, which made it better for poking rather than swinging, which led to a handheld spear and eventually a throwing spear.  Each of these are discontinuities in the existing technology, to offer more benefits or fill an unmet need.  With a simple club our ancestors improved their odds against large mammals, but probably lost a lot more fights than they won.  With spears they increased their odds of success while decreasing their own odds of injury.

Yet the club and the spear were dominant technologies for eons, until someone came up with the idea of the bow and arrow.  Why did so much time pass before the bow and arrow come into existence?  Probably because experimentation was difficult and expensive, and there was little need to develop new technologies quickly.  Yet once the bow and arrow, and other technologies like metallurgy were created, innovation accelerated.  Further, it accelerated as distant people and cultures interacted through trade.  Gunpowder is introduced in Europe from China, and what we think of as Italian food is created by the introduction of the tomato to Italy.  With this in mind it's easy to see that innovation is accelerated by interactions with disparate groups with different cultures or technologies. 

What happens next is the rapid acceleration of innovation, due to first global markets and global trade through the 1960s and 1970s, and then global information exchange and instantaneous information access due to the web.  At no time in history have we had the potential to connect as many disparate information sources, cultures and technologies, or to examine the results of rapid experiments in less time. Everything we need from an innovation point of view regarding information or interaction is in place and fully connected, yet valuable innovation output seems to be slowing.  Some component of this is based on diversity of outputs.  In the past, when innovation was focused on a few things, like better weapons or more food production, more great minds were focused on fewer things.  Now, innovation is harnessed to pursue a plethora of outcomes, rightly so, but that risks watering down the output or solving problems for smaller populations.

Another significant factor inhibiting innovation is less experimentation and less risk tolerance.  When you live your life in the open, subject to the elements and to predators, experimenting and learning to defend yourself is paramount.  Innovation was all about risk reduction.  Now, however, since we've climbed Maslow's hierarchy, innovation is often discordant, uncertain and runs the risk of toppling the environments and features we enjoy.  The more established the offering, the less risky the innovation efforts are likely to be, and innovation will arise only from new entrants with nothing to lose.

Which takes us full circle back to the original point:  why did early man innovate the club, then the spear, then the bow?  It was probably because each provided a solution to a need that was unfilled.  Today so many of our needs are filled that it can be hard to imagine what the next innovation should be, and I think we overlook innovations that are based on factor like experience.  Too often we worry about improving a product, innovating to add new features, when what's really needed is innovating the experience, thinking about the whole product and the use of the product in context of its setting and environment, where it interacts with our lives and the other products and services we acquire.  No longer do our products exist in a vacuum, they interact with us and increasingly with each other and the web.  This means innovation isn't just about the features of the discrete product or service, but about the product's ability to interact with its surroundings, context and the expected customer experience.  For example, I recently bought a new Honda Pilot Touring, a very nice new SUV.  The technology embedded in the car is amazing.  Honda offers technology to help the car stay in its lane, identify blind spot hazards, offer voice commands and a host of other really amazing technologies.  Imagine my disappointment when I placed the owner's manual CD in my home PC and I saw a flat file PDF, basically porting the old user's manual into a PDF document.  No interactivity, no videos, few links to the web.  It's as if Honda placed all its technology in the car, but forgot that most of us expect interactivity and information about our cars to be as easy to use and ubiquitous as an Amazon experience (or hopefully better).  What's increasingly missing in innovation today is the context in which the new product or service will be used, the other technologies or products that surround a new offering and the customer's expectation that the technologies will all work together and provide a high level of interactivity and easily accessed information in a format people want to use, and be entertained by. Honda, like it or not, is in the information business, both in the car and out of the car, as much as it is in the transportation business. 

So, what are we to say?  Innovation pace and capability have accelerated over the eons, bringing us to the point where information and interactivity should create thousands of opportunities for new innovation.  Yet in some cases it seems that innovation isn't nearly as productive as we think it should be.  Some of this lack of productivity is simply the diversity of innovation and the number of solutions and markets to be served. But I think a lot of it is market rigidity, comfort in long product cycles, concerns about introducing new products and the risks that entails.

What does this all mean?  Well, for one thing we should prepare ourselves for more people like Branson and Musk, who are fully capable of synthesizing information and interactivity to discover new innovations, and who have little vested interest in the status quo.  The best innovators now and in the future will be people who capitalize on the vast availability of information, human capital and interactivity, to disrupt or upset existing markets or industries, innovating where incumbents can't or won't.  Branson, Musk, Jobs and a few others are merely the vanguard of a new wave of innovators who could ultimately rework our economies if they fully grasp the opportunities in front of them.  These individuals will be boundary spanners, not content to innovate or disrupt one industry or market, but constantly seeking to win in multiple markets or industries simultaeneously.  Since they have little investment in existing markets, it's in their favor to disrupt existing conventions.  Further, these innovators will focus more on profit share in a market or industry rather than market share. They will skim the best portion of the market in terms of profit, without worrying about the total number of customers they acquire.
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posted by Jeffrey Phillips at 7:47 AM 0 comments

Wednesday, September 09, 2015

When past experience doesn't matter anymore

Today I am leading a panel at the Sports and Fitness Industry Association leadership meeting in New Orleans.  I had the chance to sit in and listen as Jim Carroll, the futurist, talked about a number of trends that will force changes in the way we make and sell products.  Jim's presentation was very interesting and let me to think about what happens when past experience doesn't matter anymore.  I'll explain what I mean by that shortly.  Jim and I share an appreciation of trend spotting and scenario planning.

Jim touched on a few reasonably well-known trends and their implications.  For example, he talked about the fact that most industries don't understand the power of transformation, or where new disrupters will come from.  For example, disruption in the automotive industry is much more likely to come from Tesla or Google than from GM or Ford.  He also talked about the increasing pace of change.  Again, for automotive manufacturers the disrupters will come increasingly from Silicon Valley, where they are used to really rapid change and short product cycles.  How will relatively stodgy companies compete when customer demands shift to expectations of interesting new products and experiences that are more like consumer goods expectations than automotive industry product development cycles?

Jim talked about meeting a senior executive of a camera manufacturer, who claimed to be measuring product life cycles in months or quarters.  That is, the vast majority of the life cycle of some of the products could be measured in a handful of months.  For gaming systems, he claimed, some games garner 60-70% of their total revenue in just the first few weeks after launch.  Finally, Jim mentioned a stat he had heard that suggested that of the scientific information that a college student learns as a freshman, half of it will be obsolete by the time that individual reaches their senior year.  I didn't catch the reference for that statistic, but it's definitely possible in the scientific community.

So, if product cycles are shrinking to months, and the science you know is obsoleted every four to six years, who do you turn to or where do you turn when you have to create a new product?  For most corporations, creating something new has traditionally meant staffing a team that has deep experience, built around people who've "been there, done that" and have the t-shirts and scars to prove it.  What happens when the facts are moving so quickly, when change is occurring so rapidly, that no one on your team has enough experience to qualify to be on the innovation team?

There's a sports analogy that's applicable here.  In the old days, traditional football coaches believed you should run the ball a majority of the plays.  Passing, they felt, was risky because too much could go wrong.  You could have a quarterback sacked for a loss, or an incomplete pass, or an interception.  The only good outcome was a forward completion, but to many of those coaches it seemed like a 1 out of 4 proposition, so they favored the run.  Likewise, many executives look at innovation as a risky proposition, and increasingly they are aware that no one on their team has the experience or skills to lead an innovation activity, so they resort to one of a handful of alternatives, most of which are bad:
  1. Focus more on the "core", cutting costs and improving efficiency, growing the "bottom line" while the top line shrinks
  2. Waiting to "buy" innovation from smaller startups where there is more creativity and energy rather than risk doing innovation internally
  3. Outsourcing innovation to consultants rather than gaining the skills themselves.  This is outsourcing what should be one of the few sustainable competitive advantages
  4. Realizing that virtually no one has any experience, so the people who experiment the most, the fastest will have an advantage. 
The reality is that no firm has a definitive stake on innovation, and we are all struggling to understand.  The innovation winners will be the people who simply admit they don't know what they are doing and don't have experience, but are willing to experiment and learn.  The ones that experiment, learn and repeat the fastest will be the ones who win.  In an era where change happens so fast that past experience may not be as valuable, what will be valuable is gaining experience on the fly, exploring, discovering, experimenting, prototyping and learning.

In the past we didn't expect employees to learn much, we expected them to apply their past education, training and experience to problems as they arose.  In the future, we'll hire people who are blank slates (metaphorically speaking) who are fast learners, experimenters and willing to try new stuff and able to gather the learning in any situation and apply it.  These are the people you need on your team, they'll drive innovation in the absence of experience.
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posted by Jeffrey Phillips at 11:50 AM 0 comments