Thursday, August 29, 2013

The hidden trap of innovation shortcuts

I've worked with a wide range of companies to help define and build innovation capabilities - teams, processes and cultural change.  Innovation has significant promise, to create valuable new products, services and business models that can drive new revenues and profits, differentiation or the entree to a complete new market or customer segment.  But doing innovation well requires doing it thoroughly, and no matter how often we build innovation processes and coach innovation projects, inevitably we find innovation teams taking shortcuts, skipping important innovation steps, assuming they "know" something about the customer or market.  When these shortcuts are taken, the result is almost always a "me-too" product.  You must either commit completely to the work that will help you achieve your goal, or admit upfront that you'll settle for something less than your goal.

Let's consider why shortcuts are so dangerous for innovation.

The future is now!

One of the steps that many innovation teams try to skip completely, or will shortchange, is understanding current trends and what those trends say about the future their products and services will compete in.  No one wants to spend time thinking about future conditions, because they can't be predicted with absolute certainty.  Therefore, many innovation teams identify needs that exist today and build products to meet those needs, only to find that when the products are released years later the needs or conditions have changed.  Investing time now to understand the potential future and what it may mean for your new product or service is vital if you truly desire differentiation.

What we think we know about needs

Far too many firms are far too arrogant about their understanding of customers and their needs.  The longer the involvement in a market, the more paternalistic a company becomes.  Product managers and marketers begin to assert needs that customers and consumers have, rather than going out and meeting customers on their own terms, where and when they use or consume a product.  It's far too easy to skip any investigation into needs, and assert the needs that have "always" existed and still exist today.

Letting others do the work

As a consultant, it may surprise you to learn that I think far too many organizations outsource far too much of their innovation cycle.  Companies rely on third parties for market research, defining product needs, interacting with customers and channel partners, product requirements and design, market development and other tasks.  Too many innovators, product developers and product managers live in a bubble, carefully fed information by third parties about the needs of their customers.  It's become far too easy to allow others to do the work, and become removed from the real investigation and discovery necessary to innovate.

It's all about speed

Of course every firm is focused on speed and efficiency.  How quickly can we complete this project so we can move on to the next one?  Are we working at peak efficiency, which is typically defined as moving as quickly as possible with as few resources as possible.  Innovation doesn't work to a stopwatch, and may often be iterative, inefficient, uncertain and require, gulp, actual learning.

So, when you combine an ill-prepared innovation team, uncertain about the tools and roles of innovation, with the pressure to create a new innovation quickly, and compound that by placing other demands on the team and downplaying any new insights or time to learn, the teams take shortcuts.  They skip critical steps, assert industry and segment knowledge, and end up repeating the same projects over and over again, using the same people and the same data.  That's not innovation, that's insanity according to Einstein.

Innovation isn't a race to efficiency and speed

Unlike every other activity in a modern corporation, innovation shouldn't be measured by a stopwatch.  Innovation should be carefully defined, carefully considered, and approached with the requisite investment in skill development it deserves.  Rather than skipping steps and activities, asserting that we "know" data, we should have the patience and humility and sense of discovery to engage customers and prospects with an open mind.  Since many innovation projects aren't a repeat of activities or projects a company has carried out before, the projects and activities should be carefully planned and each phase completely exercised.  There really is no cookie cutter approach to innovation, and many organizations lack any institutional memory about previous innovation activities or attempts, except for the attempts that failed.

When you skip steps, assume information, ignore blindspots and speed through an innovation process you miss opportunities and narrow the range of outcomes and scope of activities.  This inevitably results in incremental, me-too innovation.  Worse, it repeats a mistake and costs money and resources that with just a bit more focus and time could have delivered a far better result.  The difference between a very mediocre innovation activity that's rushed and delivers incremental results and an incredible innovation activity full of discovery that's patient and delivers disruptive results is very small, in both time and costs.

As a company gains experience and innovation maturity, the innovation teams may be able to assert knowledge, repeat processes and skip steps, but even experienced innovators will tell you that there are opportunities to discover new needs and learn new things about consumers in every innovation activity.  Mark Twain recognized the intelligence of experience when he said about his father:
When I was a boy of 14, my father was so ignorant I could hardly stand to have the old man around.  But when I got to be 21, I was astonished at how much the old man had learned in seven years.
When nascent innovators skip innovation steps, against the advice of years of innovation experience, they are like the boy of 14.  As a firm matures, it may discover that the advice was more valuable than expected.

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posted by Jeffrey Phillips at 7:03 AM 0 comments

Tuesday, August 27, 2013

Creating jobs with innovation

There's been a slight ripple in the blogosphere force.  A ripple caused by a careful inward look at the results of automation, technology and, yes, innovation.  What's clear is that these forces are creating a bifurcated population.  One segment of the population is highly compensated, creative, analytic and sustains an excellent lifestyle and is very employable.  The other segment of the population is poorly compensated, focused on manual labor or services that can't be outsourced.  This segment faces little upward mobility, and constant pressure from new entrants who are willing to do their work for even lower wages, creating great job insecurity.  Increasingly, we see the population sorted into an hourglass shape, with highly educated workers at the top, and individuals with less education at the bottom.  This has always been the case, but what's different is the middle.  In the past 100 years or so a "middle class" formed, that was a bridge between the two classes.  The middle class is slowly being squeezed out of existence as jobs and businesses change and efficiency, automation and innovation force changes to businesses.

How innovation and technology wreck the middle class

On Sunday in the New York Times, an op-ed was published that is entitled How Technology Wrecks the Middle Class.  It is an honest examination of the impact that technology has had on middle class jobs.  Automation, information technology and robotics have led to less need for a middle class that translates executive instruction into meaningful work.  As the middle class often served as a bridge between the "labor" class and the "creative" class, forces that impact the middle class tend to create a chasm between the other two classes and make the transition from labor to creative class difficult.  Of course in the recent recession we've learned that some "creative class" jobs or individuals can make the unfortunate transition to the "labor" class, because all jobs and titles are subject to disruption.

These factors shouldn't come as a surprise.  Schumpeter and others have written about the nature of  innovation, technology and automation as "creative destruction".  When the Luddites attacked the looms they were fighting a losing battle against automation.  Jobs and the nature of work changes as technology, automation, innovation and a growing educated populace rises everywhere.  There is some good news however.  For every job innovation, technology or automation destroy, they often create several other jobs.  When a robot on a shop floor replaces a worker on the line, jobs are created to design and build the robot, to create and maintain the software necessary to manage the robot, to maintain and upgrade the robot and to install the robot.  But efficiency and automation are always focused on doing more with less, so even if innovation creates new jobs, there are two problems:
  • efficiency, technology and automation are destroying jobs 
  • the jobs innovation creates are typically ones that require creative or analytic skills
There's another factor at play as well - political forces.  As more regulations are created, as health care, pensions and labor laws increase, labor becomes increasingly expensive and inflexible.  As these factors occur, executives resist hiring full time employees and run on the bitter edge of productivity, supplementing with contractors, consultants or part-timers.  Today, with an uncertain economy and significant regulatory burden, there's little incentive to hire at any level, especially when the promise of more automation or efficiency should reduce many jobs in the next few years in the labor class.

Does innovation offer an answer?

This question was posed by Paul Hobcraft recently.  Can innovation offer solution that both provide customer and corporate value AND create new job opportunities?  As I've noted before, disruptive innovation creates new jobs, but those jobs are typically in the "creative" or analytic fields.  Incremental innovation is at best job neutral or perhaps a job killer, in that incremental innovation seeks to sustain an existing product or service and make it either more attractive or less expensive.   If innovation has an answer to creative destruction, we need to turn our attention to disruptive innovation, and most likely to business model innovation.  Business model innovation has the potential to kill categories or industries, and at the same time create new jobs in all segments of society.

A close look at NetFlix will explain my hypothesis.  NetFlix, through its original business model of  delivering movies through the mail, killed Blockbuster and its retail model.  Thousands of low tech, retail jobs were lost when Blockbuster closed, but a lot of new jobs were created in different fields as NetFlix grew. Retail jobs were lost, but jobs in distribution and information technology were created.  This cycle will continue as other firms like RedBox attempt to disrupt NetFlix, and movies and content are distributed directly to consumers. 

We should also turn our attention to disruptive innovation and its impact because we can anticipate seeing more disruptive innovation in industries and areas where it hasn't been a factor yet.  Places like healthcare and university education, where regulations and traditional business practices have stymied change.  The more we understand about the impact and possibilities of disruptive innovation, the more we'll be prepared for the "jobs of tomorrow".  These industries and others have exceptionally high barriers to entry and are protected from competition through regulation.  Increasingly the disrupters for these industries will be sited in places where regulations are different (Costa Rica or India for health care as an example). 

Preparing for the jobs

Here's another place where innovation can help create and prepare others for jobs - education.  Our educational system needs a significant revamp, and since the best jobs are in the creative economy, and require education, we need to rethink and revise our education process.

Today in the US our educational system needs rethinking from the bottom up.  We educate our kids on an agrarian calendar that worked when the majority of people were farmers, but today we sacrifice months of potential education time to summer vacation.  We must rethink the schedule, the content and curriculum that kids in kindergarten and first grade receive.  We need to reintroduce the creative arts - music, art, drawing, etc because creativity is vital to future jobs.  We need to experiment with a range of different class styles, educational programs and ramp up the expectations of all students.  This needs to start at the lowest levels and work its way up to secondary education.  And we need to demonstrate that while college is important for many people, deep skill building and expertise is important and valuable, so start many kids on a track to vital technological education very early, and raise the profile of that educational experience.

Then we can tackle what is the main driver and barrier of creativity and the foundation of the creative class:  college.  The collegiate education needs a rethink in terms of what people learn, how they apply what they learn, but more specifically the value and cost of the experience, and what that experience prepares people to do.  Too many people are leaving high school and college with no distinguishable improvement in skills or thinking capability, having matriculated but not learned or improved their skills.  We need far more innovation at the collegiate level, and MOOCs or other programs may become the tipping point that forces colleges and universities to change.

Amanda Ripley's book Smartest Kids in the World points out some key differences between educational systems in other countries and our own.  Some I've noted above, but perhaps the most compelling difference is the focus on the status of teachers.  We need to elevate the teaching profession and recognize the value of people who create the "raw material" that will become our new competitive edge.  Daniel Pink in his book A Whole New Mind demonstrated over a decade ago the importance of creativity, by noting that anything that could be outsourced or automated would be, leaving value in creativity, analytics, design and other fields that demand education.  Pink identified Asia (for outsourcing) abundance and, wait for it, automation, as the three factors that would transform our economy and place higher value on education and creativity.

In other words, we know how to change, and we know where innovation can help.  The resistors to the change necessary are enormous.  We're talking about hundreds of years of educational history and bureaucracy, being asked to adapt to rapidly changing conditions with very uncertain outcomes in a period where funding for education is being cut at the lower levels and being called into question at the collegiate levels.  This is the point where all the forces combine to create a singularity - the systems will actually fold in on themselves in the physical sense. 

The reality

Innovation, automation, efficiency and innovation technology are all job creators and job destroyers.  The creation/destruction cycle is simply speeding up, at a time when we are ill-equipped to deal with the speed and direction of the change.  Our educational processes, starting at the earliest ages, are configured for rote learning, with little deviance or creativity allowed.  Of course it would be very difficult to react to the rapidly changing circumstances, especially considering the size, funding and expectation of the educational systems.  But we need to place our bets somewhere, and a rapidly reconfigured and constantly evolving educational process is what I believe can create more jobs and more prepared workers and innovators.  If you want to see the place where innovation can create jobs, and the potential for more jobs and more wealth creation, focus your innovation attention on the educational process, from the ground up.

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posted by Jeffrey Phillips at 6:57 AM 2 comments

Wednesday, August 21, 2013

Is your innovation a step, jump or vault?

In hindsight, most new products or services that are created seem relatively obvious.  Consumers and manufacturers will wonder - why didn't we see this sooner?  Most really interesting innovations, however, seem paradoxical and strange as they are being introduced, even though many will be accepted and become part of the norm.  For example, consider cell phones.  During the period from 1990 to about 1997, it seemed the goal of all cell phone manufacturers was to shrink the size of the cell phone - to make it an accessory hanging off the ear, or to perhaps even eventually place it in the ear canal, out of sight, out of mind.  Enter the iPhone, and now the landrush is on in the opposite direction - cell phones as platforms for visual interaction and data presentation.

Which leads us to the question of how you frame your innovation activities.  When you organize your innovation teams, and ask for innovation outcomes as new products, services or business models, what picture do you paint for them?  Is the outcome you expect a simple "step" from the products and services available today, a modest "jump" from where expectations reside, or a significant "vault" to a completely new solution or market position?  While these three represent human activities, the energy, experience and enthusiasm embedded in the different outcomes presents real opportunities and challenges.  Without a clear definition, the vast majority of projects will be "step functions" because those are the fastest, safest and simplest, with the least amount of risk.  However, that's also exactly how all your competition views it as well.  Each of you is "doubling down" on the same opportunity!


Work is defined as force over a distance, and that's a great definition as a metaphor for innovation.  How much work is required to create a new innovation?  Some of that work is used up as force overcoming resistance and inertia.  Since force is often limited, the less resistance that must be overcome, the more distance can be covered.  Energy is required to do work, but energy is expensive and must be conserved.  Therefore, we want to do the most work possible with the least energy, and that often leads to the work with the least resistance - the "low hanging" fruit. 

You must create the energy necessary relative to the innovation outcome you desire.  You can accomplish that by either ramping up investments and energy, or by reducing work and resistance.  Most resistance is organizational, historical and cultural, so focusing on the rationale for the change, and communicating the potential outcomes while working to reduce risk is vital.


Most of us learn to walk about 12 months or so after birth, so taking a small step is something we understand.  You don't need a lot of training or practice to take a small step, in life or in business.  There may be physical, emotional or cultural barriers to that small step, but once you've overcome those you or your business can make them.  Jumping is something we learn soon after walking.  Jumping is a bit more risky - it entails leaving the ground temporarily and may require clearing a modest obstacle.  Jumping may require a bit more practice, but it's something that many people can do especially well without a lot of experience, especially when the landing spot is understood and visible.  Vaulting, on the other hand, is a completely new experience.

Vaulting is based on taking steps, jumping and at the same time thrusting oneself over a bar set very high.  It combines all of the first steps, but introduces a lot of new technique and risk.  No one vaults without extensive practice, to become good at what they do.  There's too much risk and uncertainty involved, yet good vaulters make it look easy.  Vaulting adds a significant height component to the basic jump, compounding risk and uncertainty, yet with practice, good athletes can learn to vault.

The various forms of innovation outcome, sometimes described as incremental, breakthrough and disruptive, are similar, and from the description of experience and energy you can begin to see why so many innovations are simply step functions from existing knowledge.  It takes energy and experience to jump, and even more to vault.  Yet the rewards are found in the jumping and vaulting, while a new red ocean is formed when the majority simply step.

There's one other component that's vital to success beyond the step function, and that's enthusiasm.  Anyone can take small steps, given enough prodding, and some may even make small jumps.  But no one vaults without confidence and enthusiasm.  Innovation is the same way.  Many people will generate incremental ideas, but only those with enthusiasm will imagine and have the energy to see truly new ideas through to fruition.

Much innovation success is based on where you start - the energy you create, the experiences you have or build and the enthusiasm you muster or find within your organization.  What outcomes do you want?  Low hanging fruit, while easy to grasp, is often a false peak.  Too many people spy the same fruit and end up recreating the common competition pool, while far too many good opportunities go missing because they require more energy and experience than a simple step.
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posted by Jeffrey Phillips at 6:06 AM 0 comments

Monday, August 19, 2013

Innovation copy & paste

I read with some interest a good post by Jorge Barba, in which he writes about the difficulties of creating an innovation capability simply by copying what other firms are doing.  He argues that "step by step" recipes often don't work, that you can't simply copy what Google does without also copying the culture that made Google successful.  However, we've since learned that Google is going to abolish much of what we thought made it successful - the 20% time - but that's another topic for another day.

Jorge raises an interesting question for firms that are building innovation capabilities:  what can you copy from others, what are the universal best practices, what do you need to define and develop for yourself?  The question Jorge doesn't ask, but that is equally relevant is:  how much time and effort will it take to copy what can be copied, to develop that which must be developed?

Because if you can't simply copy and paste, which is quick and somewhat painless, that means you must invest and develop, which isn't quick and takes time and money.

What you can copy

Every innovation consultant will argue that their approach or methodology is the best one, and all of them are being a bit disingenuous.  Alex Osborn and his supporters at the Critical Problem Solving Institute developed the basis for what a lot of us preach and practice.  Beyond Osborn's methods there are a range of trend spotting and scenario planning methods, customer insight approaches, intellectual property methodologies and so forth.  You can find the "best" of these and determine which components meet your company's culture, perspective and needs most effectively.

When it comes to tools and methods, you can trust a best practice approach.  That doesn't mean you should follow a prescribed methodology because X company does.  You should implement any tool or methodology in light of the specific goals of your company, the experiences it has, the goals it has.  You should implement tools and processes to "fit" with your organization, but never to hamper those methods and process by forcing them to accept limitations your organization imposes.

What you must develop

If you've run an innovation project using borrowed or copied methods, two issues must have become clear:  how few people really engaged in the process or even understood what was going on, and how much the existing culture rebelled against the imposed methods and processes.  While you can copy tools and to some extent an innovation process, you can't copy and paste the experiences of the people and their relationship to the corporate culture.

For long term, repeated success, you must train your people and potentially recruit new skills in order for innovation to thrive.  You may be successful on occasion with untrained people using unfamiliar tools, but that rarely happens in a high pressure, high exposure project.  Further, those inexperienced people using unfamiliar tools and processes encounter real resistance from a culture attuned to efficiency, not innovation. 

How to develop what you must develop
From a people perspective, there are three actions you can follow:  you can recruit new people with innovation experience to join your team, you can retrain existing people to take on new methods and processes more effectively, and you can change reward structures for both your new people and your existing teams.  Or, you can simply outsource innovation to people who are experts.

From a cultural perspective, there are no shortcuts.  The more work you put into changing the culture, encouraging the organization to innovate, to accept tradeoffs between efficiency and variability, between certainty and ambiguity, between predictability and risk, the more ambidextrous and flexible the organization will become.  Rewards and recognition matter as well.  How people are evaluated, compensated and recognized will shift the culture, as will long term, continued management focus and communication.

What you can't copy and must have

Copying a "best practice" method or set of tools will take only a month or two.  Developing your people and changing a culture can take several years.  Here you begin to see the crux of the problem.  Management teams aren't especially good at long term thinking or committing to long term, slow change projects, especially ones with unpredictable outcomes.  Quick and dirty, aiming for the proverbial "low hanging fruit" will always win out over slow, careful, constant change.  But that slow, careful, constant change is what you can't copy, and must have, for innovation success.

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posted by Jeffrey Phillips at 2:29 PM 0 comments

Separating entrepreneurs from corporate innovators

It's probably a distinction without a significant difference, but I try to distinguish very carefully between entrepreneurs, inventors and corporate innovators.  While there are some significant overlaps in goals, purpose and intent, there are also some very significant differences which I'd like to explore.  Entrepreneurs play a vital role in creating new technologies and forming new companies, and corporate innovators play an important role as well, revitalizing and refocusing the energy of larger corporations.  But what they face in doing their work is very different, and both should be considered in isolation - in context of their environment.  While it seems counter-intuitive, I'll make the case that the corporate innovator, by and large, has the most difficult job.

What's common

Both innovators, entrepreneurs creating a new business or technology, and corporate innovators trying to disrupt an adjacent market or entice a new customer segment, face a daunting challenge.  Creating interesting, vital and relevant new products and services is not easy.  The vast majority of new products or services fail to achieve internal goals set by the innovation teams, much less create the hoped-for profits and revenue growth.  Developing a new technology or product is difficult, challenging work regardless of the team environment and structure.  Risk, uncertainty and doubt plague anyone who starts down the path.  Entrepreneurs and corporate innovators share the desire to create meaningful change, the ability to spot unmet needs and a passion for delivering value to customers.

What's different

Entrepreneurs are innovators who have bet everything on one idea.  Their business, their structures and processes (such as they are), their passions and their resources are all fully behind that one idea.  Nothing should deter or distract the team from their aggressive pursuit of their idea, and everything about the company should support the success of the idea.  All decisions about resources, funding, messaging and strategy should be made in support of the main idea.

Further, the idea needs to be disruptive to the status quo.  Entrepreneurs, especially entrepreneurs who seek VC funding must demonstrate a business that will grow quickly.  This means creating a completely new market or service, or significantly disrupting an existing market or service.  Few entrepreneurs will be successful pursuing incremental ideas or ideas that are "me too" in nature.  Entrepreneurs can't afford to spend a lot of time evaluating a significant range of options.

Corporate innovators, on the other hand, face a very different landscape.  They have choices - either to create incremental products in existing markets, disruptive products that may cannibalize existing products, or to enter adjacent or entirely new markets.  The risk factors associated with the latter two options often doom those approaches from the start.  While an entrepreneur faces significant risk in any decision, corporations are more comfortable avoiding or at least minimizing risk.  Corporate innovators often have to re-introduce the risk balance of risk and reward.  Further, corporate innovators can claim only a tiny portion of their organization's budget, time, resources and focus.  While entrepreneurs are "all in" on one idea, corporate innovators must understand the range of options and alternatives that any business can encounter, and understand that the idea they are pursuing is but one of many ideas that the organization can fund, along with the demands for funding by existing teams and products.  Corporate innovators face resource allocation issues, prioritization issues and tolerance of risk that entrepreneurs acknowledge but to a great extent escape.

Further, corporate innovators are rarely "all in".  Most corporate innovators have "day jobs" - that is, they have a regular 9 to 5 job in marketing or finance or engineering, and they double up by taking on an innovation activity temporarily.  While an entrepreneur eats, sleeps and breathes his or her one idea 24/7, a corporate innovator pays attention to his innovation task several hours a week at best.  Corporate innovators are frequently distracted and asked to balance a number of urgent, competing priorities.

Both face uncertain funding, but even here the differences are stark.  Entrepreneurs, especially those who are funded, face questions from their investors, but more stark is the question of burn rate.  Will the entrepreneur have enough money and time to bring the idea to market before the money runs out?  This creates a sense of urgency that is often missing in corporate innovators, where innovation activities run at the pace of business as usual.  Corporate innovators face funding issues as well - often receiving far less in available funds to do the work they need to do, and encountering the whims and demands of firms that report results quarterly.  Funds can be quickly shifted and projects halted with a minimum of explanation.

Who has the tougher job?

In my opinion, and in my experience, speaking as someone who as 1) been on the management team of a VC backed company 2) run innovation for a company and 3) been an innovation consultant, the corporate innovator has the more difficult job.  He or she has much of the same expectation as an entrepreneur in terms of challenge and growth, but often works with one hand tied behind his back, limited by the pace of the corporate behemoth and distracted by a day job.  While the cost of "failure" isn't as high as it is for an entrepreneur, the upside is often very limited and the experience can be frustrating. 

An entrepreneur knows the risks and can commit all of his or her efforts behind the idea.  There are few people to reduce or constrain the breadth and scope of the idea, and no existing investments to protect.  All focus and energy is placed behind the idea.  The entrepreneur has a far greater sense of scope and control.

How can you incorporate the best of both?

Corporations need to emphasize much of what's right about an entrepreneur in their innovation programs.  Innovation needs to be more disruptive, more creative, more passionate.  Innovation needs to move at speeds dictated by the ideas, not by funding or approval cycles geared toward business as usual.  Innovators need opportunities to introduce more risk and have more time and control over their work.  They should be allowed to take greater risks and face both the potential upside of those risks and perhaps some of the negative aspects of the risks they create, as long as they also control the resources and direction of the innovation projects.

Further, organizations must be clear about how much innovation they want, the risks they'll tolerate or embrace and what they'll fund.  Corporate innovators work in the gray areas far too often, living on hints of funding and suggestions of scope.  These need to be more definitive for long term success.  Finally, corporations should encourage competition between good ideas, and stop thinking about innovation as a zero sum game with only one winner.  Every idea that is beneficial and expands valuable relevant offerings that customers want should get a voice.

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posted by Jeffrey Phillips at 6:56 AM 0 comments

Friday, August 16, 2013

Book Review: Inside the Box

I'm a constant reader, especially when it comes to books about innovation methods.  Even after a decade of innovation consulting, there is still so much to learn, and even old skills and knowledge can use refreshing.

There's a new book out, about a relatively old subject, that merits your attention.  The book, entitled Inside the Box, is about Systematic Inventive Thinking (SIT) and its predecessor, the ideas and concepts behind TRIZ from Altshuller.  Inside the Box presents itself as a bit controversial, arguing that you don't need to think "outside the box"for great new ideas, that often focusing on a "closed world" of working inside the box can create great ideas, when using the SIT formulation.


If you aren't familiar with SIT, that's because it is a relatively new technique for innovation, based on the work of Altshuller.  Altshuller and others popularized TRIZ, which was based on research into patents.  The team behind the SIT method conducted further research and felt that the "majority of new, inventive and successful products result from five templates:  subtraction, division, multiplication, task unification and attribute dependency."  Thus, these "templates" along with the concept of a "closed world" - working inside the box - form the basis of SIT.

The book notes that many people believe you have to get outside your current context to be innovative.  Classic brainstorming encourages a divergent and then convergent approach.  SIT suggests a "closed world" approach, requiring the innovator to work with what exists close at hand.

Inside the Box

On the whole, I found this book to be a good overview of the SIT method.  The different templates (subtraction, multiplication, task dependency etc) were well defined and the authors provided good case studies.  At the end of each chapter the authors provide basic step by step instructions on how to use each template, so any innovator or innovation team can pick up the tools quickly.

The book's focus on creativity and the nature of unbounded thinking is a bit of a strawman.  I've participated in many idea generation sessions and innovation projects, and very few programs suggest that completely unbounded thinking is beneficial.  Whether you are an "inside the box" guy or an "outside of the box" gal, most people recognize that some constraints on thinking actually aid innovation.

The challenge, for many organizations, is that thinking "in the box" often poses unintentional constraints. We are often asked by our clients to help their teams to think "outside the box".  By this the executives don't necessarily mean outside what SIT calls the "closed world".  What they really want are compelling new ideas that will solve customer challenges and drive new profits or revenue.  Their "box" is limited, cramped thinking based on cultural norms.

Inside the Box does an excellent job of describing the SIT approach, and provides detailed step by step approaches for each of the templates documented within the SIT methodology.  It is a valuable addition to any innovation bookshelf.


While Inside the Box is a good book, I have a couple of concerns about the positioning of SIT as a solution and how innovation and idea generation are presented generally.

Early in the book the authors present a study that indicates that brainstorming isn't a great option for idea generation.  Many innovation consultants and authors have lampooned brainstorming, and not without reason.  Not all idea generation is brainstorming, but brainstorming has its place as a tool or approach, not "the" tool, but "a" tool.  In my opinion, books lose credibility when they present a strawman that many people recognize is exaggerated to make the case for their preferred alternative.

Next, the requirement of a "closed world" means that every SIT project begins with an existing solution.  Many times, a radical rethink of an existing product or service is valuable, and SIT offers this methodology.  However, there are many situations where a disruptive new solution is required that demands capabilities outside the "closed world".  SIT doesn't work well in a truly disruptive or divergent setting.

Finally, I feel the authors fell into a trap that many who write about innovation tools encounter.  That trap is what I call the "one perfect tool" trap.  When there are so many innovation tools, methodologies and techniques, many authors writing about a particular tool present their favorite technique in relatively absolutists terms.  The authors of Inside the Box are no exception.  SIT is presented as a tool that is almost always the best tool, and several studies are presented to demonstrate why brainstorming or other creativity techniques aren't up to snuff.  I've got no beef with people who are passionate about a tool or methodology, but no innovation tool solves every requirement or situation.

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posted by Jeffrey Phillips at 5:31 AM 0 comments

Tuesday, August 13, 2013

Can you spare an innovation dime?

In the Great Depression - the real Great Depression in the 1930s - it wasn't at all uncommon to see able bodied men selling apples on a street corner, or worse, holding a sign asking for spare change.  The phrase "can you spare a dime" became synonymous with the era, as people sought any job, any way to earn money they could find.  Of course, back then a dime was real money.

Today, there's a new cry heard in many organizations.  Street corners aren't the only place where scarcity is found - most modern corporations are symbols of scarcity.  Today, the first issue anyone interested in innovation must face is:  can you spare a body?  What happens when money is cheap, and people are expensive?

The blessings of Efficiency

I come today not to praise efficiency but to bury it.  Because of efficiency and effectiveness, and their cohorts in crime, Lean, Six Sigma, downsizing, outsourcing and right sizing, most organizations run today on the bleeding edge of staffing efficiency.  This means that the bottom line in most corporations looks good, and the top line is often stagnant.  Firms have placed so much emphasis on efficiency and cost cutting that there's little time, focus or resource to think about growth.

Strangely, money is not the key roadblock - any corporation can find money to spend on innovation, whether that money goes to external consultants, or to fund research or acquire new intellectual property or ideas.  Money as the traditional barrier to getting things done has been supplanted.  Today, resources are the real barrier.

In work teams and business functions working on the bleeding edge of efficiency, there are simply no additional resources to place on inefficient, unproven innovation activities.  Anyone who is "freed up" to work on innovation activities is a "critical" component of an existing product or workstream, and their work must be taken on by other people.  There's no slack in the system, and further, rewards and compensation follow the individuals that sustain efficiency.

A new iron triangle emerges

As a young engineer, I learned the rule of the iron triangle - cheap, fast and reliable.  An engineer gets to pick any two, and the third is then dictated.  Choose cheap and fast, and you sacrifice reliability.  In the innovation world, the iron triangle is composed of three components:  people, money and ideas.  Today, ideas and money are cheap, people are expensive.  Yet without people to identify needs, generate ideas and build new products, innovation is virtually impossible.  The value of inputs has been completely inverted.  Time was that people were cheap and ideas and money were expensive.  As more education came online and trade barriers fell, ideas and intellectual property became cheap.  Even money is cheap, thanks to the Fed and the profit streams of many organizations.  That leaves only staffing or resources as the critical bottleneck.

While innovation relies on three components, the most important of the three - people, money and ideas - is people, yet that is the most difficult component to get in the right quantities and quality. 

Solving the People Problem

In any organization that hopes to innovate successfully, the availability problem must be addressed.  As many of you know, it's not just "any staffer" that can become a good innovator.  The people problem is compounded because innovation requires, demands the best people in your organization.  There are only a handful of methods to solve the problem:
  1. Add staff to create some slack in your resource system
  2. Ask the existing staff to do even more, to free up a few individuals to focus on innovation
  3. Outsource critical tasks or the entire innovation process
The first option, strangely, is almost a non-starter, even with the abundance of people available.  Most firms want to limit hiring.  It's become too hard to hire and to train, and too difficult to let people go as needs change.  The second option - shifting responsibilities - is what many firms attempt, but when people are already overtaxed, they struggle to do a good job at innovation in a very limited timeframe and with no training or tools.  This is why most innovation in incremental at best.

The third option is the easiest but often the most dangerous.  Outsourcing innovation to consultants or designers means that your internal organization never learns to innovate, never gains skills or capabilities.  You can easily become dependent on third parties who don't share your perspectives or who want to re-use insights or ideas from other clients.  Yet outsourcing is fairly common, when people are expensive and money is cheap.

There's a final option, which is to make innovation so central to your activities and processes that it everyone is doing it all the time, almost effortlessly.  I've written before about shifting your "business as usual" to incorporate innovation, so that innovation is "business as usual".  When everyone is doing it and innovation is part of the fabric of how you work, the people problem won't disappear, but it will become far less of a concern. 
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posted by Jeffrey Phillips at 6:17 AM 0 comments

Friday, August 09, 2013

The value of innovation and quality training

I want to talk today about building skills through training.  This particular post about training has a dual purpose.  It's first purpose is to address my position as one of the ASQ's "influential voices".  Each month the CEO of the American Society for Quality presents a key topic, and those of us who are featured voices are asked to respond.  As you know, I'm probably the cuckoo in the nest, since I focus on innovation rather than quality.  But this is a topic where I get a twofer:  I can write about the differences between quality training and innovation training.

The importance of training

As Paul points out, training is vital to good practice.  For quality folks, he presents a graphic that describes the percentage of firms offering quality training in categories (Six Sigma, Lean, auditing, etc) to their employees.  The numbers look impressive, but my experience tells me that while many programs are offered, there are far fewer takers.  Unfortunately, in tough times training is one of the first cost centers to get cut, and while internal training is often adequate, it can become very quickly stale, and interacting with new trainers and new colleagues is often half the benefit of training.

Even people with deep experience need to refresh their skills.  As we say in innovation circles, it's a journey not a destination.  That is, even people who have years of experience can learn something new to apply if they are willing to open up their minds.  Developing skills and extending or refining skills and knowledge is vital, especially as we are increasingly in a knowledge based economy.  Training is vital - in quality or in innovation, but the depth and type of training in these fields rapidly diverge.

Quality versus Innovation Training

The quality folks have a real "leg up" on innovation teams where training is concerned.  Most of the methods for quality (Lean, Six Sigma, TQM, etc) have been in practice for a long time and have a robust body of knowledge associated with them.  Further, since much of quality is based on repeatability and statistical control, there is real science behind much of the content.  Further, there are organizations which present themselves as "the" arbiter of what is Lean, or Six Sigma, although there are still significant differences.

Contrast that with innovation.  Innovation is still mostly a free-for-all, with dozens of different methods, styles and techniques, often hawked by the inventors of the technique.  Training is mostly offered by the developer of a tool or technique, so it is hard to judge the value and depth of the training or the knowledge imparted.  There really are very few "standards", so you can't compare techniques to each other or even training on one technique to another class on the same technique.

For these reasons innovation training is less formal and more difficult to compare.  When you compound these facts with the fact that many people don't believe innovation can be taught, it's difficult to convince internal training teams or purchasing managers to fund innovation training.  If these challenges weren't enough, many organizations don't have internal innovation training programs so the costs and risks rise as teams must seek outside support.

The fundamentals

Until an organization settles on its key processes and methods (for quality or for innovation) training is mostly a hit or miss opportunity.  When an organization settles definitively on a defined set of tools and processes, I think it's more effective to structure the training to that modified set of tools and processes.  In other words, cobble together your own training based on your knowledge of your processes and tools, and supplement with external sources to ensure you keep abreast of new tools and new perspectives.

Another factor that many in both camps miss:  there are thousands of books published about many of these techniques, and many of  the books are very good and can form the basis of a training program.  Many people actually teach themselves these skills at home off-hours, and that training has the best components - someone who is interested and passionate enough to search out tools, who trains themselves as they do their work.  Mastery can come when they train others.

Paul asks, do you pursue training on your own?  In his case he was talking about quality training, but I can assure you the best innovators in your company are building their own knowledge by reading all they can.  They can't afford to wait for HR to approve a training program, because the needs are simply too immediate.  I suspect the same is true for quality folks.  They are training themselves with the best books and content on the web they can find, because the courses that are offered come too late, and aren't fully configured to their needs.

The net takeaway for both quality and innovation is that training is vital, and skills and knowledge need to be constantly reinforced.  I think that training is easier to justify and more readily available, and more "trusted" in the quality space than in the innovation space, which simply makes innovation more difficult to sustain.

I’m part of the ASQ Influential Voices program. While I receive an honorarium from ASQ for my commitment, the thoughts and opinions expressed on my blog are my own.
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posted by Jeffrey Phillips at 8:02 AM 0 comments

Wednesday, August 07, 2013

Who are my best innovators?

For years now I've had clients ask:  who are my best innovators?  And for years I've basically responded with:  let's find out.  Because when it comes to identifying the most likely innovators in an organization, there's never an easy answer.  Some of the best and brightest, who are on the fast track, should be good innovators but don't want the associated risk of failure.  Some of the people who are marginalized for constantly questioning the status quo could be good innovators, but have little organizational or social capital.  How do we find the best innovators in an organization?

I've  typically responded that the best innovators will reveal themselves, based on their engagement, passion, curiosity and risk taking.  These are attributes or characteristics that are often evident in hindsight - that is, you discover whether or not a person has these characteristics at the end of a project, not at the beginning.  It's easy to claim passion or the ability to take risks, but once demonstrated it is easy to believe.  Let's look at some of the methods we've used previously.

The Innovator's DNA
Gregersen, Dyer and Christensen addressed this topic in The Innovator's DNA, which is a fine book and identifies five attributes that many innovators share:  associating, observing, experimenting, open questioning and networking.  The challenge is that some of these are observable traits, and some must be experienced.  You must work with people for months if not years to understand if they are good at associating - holding two diametrically opposed ideas in their minds at the same time and finding associations or relationships. It's especially difficult to understand if people are good at observing and assessing behavior.  Many executives apply their well-worn templates and mental models, rather than truly engaging and discovering through observation.  Even when they are observing, they are rejecting more information than they are taking on.  So, the Innovator's DNA is valuable, but not the end of the story.

 Those of you who follow this blog and our innovation consulting work know that we require all of our client teams to use the Foursight innovation assessment.  Foursight doesn't describe an individual's interest in innovation, as much as their specific capabilities within an innovation project.  Foursight indicates which of the four capabilities (Clarifying, Ideating, Developing, Implementing) an individual enjoys, so you can balance your innovation team effectively across these skills.  Other assessments exist, including the Kirton Adaption-Innovation Index, based on years of psychological research, and Creatrix.  These assessments are good for balancing the team and allocating roles and responsibilities, but don't necessarily identify who the best innovators are.

Identifying Innovators in the wild

Still, how do you identify the best innovators in your organization, and just as importantly, identify prospects and recruits who are likely to have more innovation skill and interest?  In my book Relentless Innovation, I discussed the need to make innovation part of your business as usual.  To do that you need people who are engaged innovators, what I'm going to call Relentless Innovators.  Maybe you see a trend here...

To grow and sustain your innovation capability, you need to identify the best innovators in your organization, and attract and recruit the people with the best innovation skill sets and passions from outside.  To do that we need to identify key attributes, characteristics and attitudes that set these folks apart from other, equally valuable employees.

To that end I am running an innovator's survey.  If you or someone you know is a constant innovator, I encourage you to take this survey.  I am trying to identify attributes that will help an organization quickly assess its internal team and find the best innovators, even if they don't seem like the most likely innovators.

The survey is composed of approximately 30 questions.  It takes between 5-7 minutes to complete and you can answer anonymously.  If you'd like to participate on a deeper level, feel free to leave your contact details and I'll contact you.  My goal is to complete the survey before the end of September and analyze and publish the findings in late fall 2013.  I'd appreciate your help in publicizing this survey and attracting people in every country, every industry, every role who considers themselves to be a consistent innovator.

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posted by Jeffrey Phillips at 6:42 AM 0 comments

Monday, August 05, 2013

Innovation's link to strategy

Today's post was sparked by a magazine cover.  I was in the break room and the cover of a magazine caught my eye.  Brian Cranston, the loveable dad from Malcolm in the Middle, and the evil drug warlord from Breaking Bad, was on the cover.  The focus of the article was how Cranston has constantly reinvented himself as an actor.  That got me thinking - what is the purpose of innovation in your organization?  Is innovation meant to help you reinvent your company?  Or, possibly to perfect the products and services you already make?  Let's consider the practical purposes and potential outcomes of innovation.

The "purpose" of innovation

This question is often where executives start to roll their eyes.  The "purpose" of innovation is obvious, isn't it?  Executives value increased sales, increased market share, increased profits, glowing publicity, differentiation and a rising stock price.  The purpose of innovation is to achieve these outcomes, at least in their minds.  But to get to that point, a slightly more esoteric discussion is necessary.

What are the outcomes we hope to achieve?  I like to think about innovation as a component of corporate strategy, an enabler or toolbox to help organizations achieve their strategies.  In this light there are four or five purposes that innovation can support:
  • Perfecting existing products
  • Reinventing the company
  • Disrupting an adjacent market
  • Broadening an offering or portfolio
There may be more purposes, but these are the ones I want to focus on today.


Like Brian Cranston does as an actor, it's possible for a company to reinvent itself.  That is, to build on what exists but take the firm in a new direction, with new offerings, new value proposition, new interactions.  Changing a company is far more difficult than shedding a skin the way an actor does.   Established culture and consistent revenue streams make it difficult to change a company quickly, but they can be changed.  If your organization is stuck in the doldrums, competing in a "red ocean" with low margins and little opportunity to differentiate or grow, the best option may be to consider reinventing your firm, adjusting the business model, customer experience or channels.  Often product innovation isn't the answer here - but differentiation and innovation around other key components of your value proposition may be.  It may be that only a product line or business needs reinventing, rather than an entire company.  Products and businesses like people grow and age, and need reinventing or they will slowly die.


Too many innovation projects are focused on what I'll call "perfecting" existing products.  That is, deep examinations intent on interesting but ultimately incremental change to existing products.  This innovation is safe, because it usually builds on existing products and revenue streams, but is often a net neutral effort, since the new revenues barely cover the cost of the innovation effort.  Perfecting is also dangerous because it attracts resources that could be used to consider disruption or fighting off new entrants.


The "kissing cousin" of perfecting is broadening, that is, adding new products and services to a portfolio to broaden an offering and squeeze out competitors.  Many firms offer a vast array of shapes and sizes of products in order to satisfy every customer, yet these "innovations" often address only a very small minority of the market.  Rather than add to the portfolio, many companies should prune their product portfolio and use the resources for new innovation activities.


Perhaps the most interesting innovation opportunity is the one that is the most frequently overlooked.  Disrupting an adjacent market has some significant risk, but allows a firm to grow into new markets or segments based on core capabilities.  The recent book Thinking in New Boxes describes BIC's move from pens into disposable razors.  The natural evolution was to Broaden the portfolio of pen products, but an executive at BIC reframed the company to think of itself as a designer and manufacturer of disposable plastic products, which led the company to lighters, razors and other products.  Disruption is often about applying an internal capability in a new way that allows easy entry into another market or segment.  Disruption may focus on product innovation, but may also rely on knowledge, customer insight, internal capabilities or other factors that innovation can accelerate.

Impact on Strategy

Note that all four of these outcomes are particularly based on corporate strategy.  Innovation can accelerate any of these outcomes.  However, corporate strategy must open or close specific avenues before innovation teams can proceed.  Is "perfecting" the existing product line the best alternative, or is introducing new products to "broaden" the product line preferred?  Does your company need to reinvent a product or business?  In the absence of these questions and their link to strategy, every fallback position for innovation is either perfecting or broadening, which in turn means every innovation activity is focused on products, not business models, channels or customer experiences.

Innovation is not a strategy, but is closely aligned to corporate strategy when done well.  How effectively you design and communicate your strategy will communicate the potential degrees of freedom innovation teams enjoy.

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posted by Jeffrey Phillips at 7:06 AM 1 comments