GUEST POST from Drew Boyd

Dave Lavinsky is a serial entrepreneur who built his own company from the ground up. His book, Start at the End, was a #1 Bestseller on Amazon just one week after it was released. The goal of the book is to learn how to work fewer hours and be efficient when working at a new job or starting a business.

For innovation practitioners, here are his top 12 tips:

1. Start at the end – if you don’t know where you want your business to go, you’ll never get there.

2. SWOT analyses are obsolete; realize there will always be threats and company weaknesses that don’t warrant fixing. Rather, focus on opportunities that leverage your strengths (SO analysis), and build your strengths further so they give you sustainable long-term advantage

3. Forget your P&L; that’s short-term thinking; need to also think longer-term; building business assets that allow you grow your business and reap better P&L later and forever.

4. If your business doesn’t have a scorecard, you will lose EVERY time. Your scorecard needs to include the detailed KPIs that underly your revenue and profit results.

5. If your business doesn’t operate without you, it’s not a business; it’s a miserable job. You must systematize your business so it works for you, not vice-versa.

6. The most important marketing metric in a business is PPI – profit per impression. To maximize it, you need a fully optimized marketing system.

7. Business owners don’t need more leads (even though all of them think this will solve all their problems). Rather, they need a better marketing system that converts leads into lifelong customers.

8. Most business owners don’t have even one organization or “org” chart when in fact you need to have 3 to succeed.

9. Successful business owners don’t run businesses. They have employees that run their businesses; they grow them. To be successful, you need to build an org chart that includes the necessary personnel and structures to allow your business
to run without you.

10. Because of poor management, most small business owners’ employees focus on the wrong things. Ask your employees how they think their performance should be judged, and make sure that agrees with your thinking. If employees don’t understand what success is, they can’t possibly achieve it.

11. Business owners should stop innovating. Rather, do more of the things that are proven to work and less of the things that haven’t worked. Avoid shiny object syndrome of constantly wanting to try the latest thing.

12. Humble yourself by building an advisory board. You’ll be amazed by what other successful people know that you don’t.

image credit: finish line image from bigstock

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GUEST POST from Drew Boyd

Can you innovate too much? After all, new ideas fuel organic growth. One would think an organization would be happy to have as many ideas as possible.

But not always. Here are scenarios where over-innovating might be considered too much of a good thing.

1. When you are over-positioned: Too many good ideas could lead you to an extreme position in the market where you stop earning at the middle and bottom ends of the market. Most companies crave the premium end of the market, but overdoing it can backfire.

Example: Cincinnati Children’s Hospital Medical Center has done such a great job at innovating in its domain that it’s considered in the top three U.S. children’s hospitals. Therein lies the problem. The local market sees Cincinnati’s Children’s as so advanced and innovative that parents are reluctant to take their kids there for routine health issues – bumps, bruises, fevers, and so on. Parents see Cincinnati Children’s as the place to go only when their child is sick with a deadly disease – cancer and the like. This extreme positioning caused the hospital to lose 20% of its volume of visits in the last two years.

2. When you are under capacity: Generating new ideas puts pressure on an organization. New ideas must be evaluated, filtered, and developed. This takes time and resources. People are distracted from their regular day jobs and they feel overwhelmed. Too many ideas may exceed the organization’s capacity to make sense of it all. Idea fatigue sets in

Example: A major player in aerospace wanted to create a new digital app solution for its customers. The app was intended to retrieve sensor data from aircraft components and relay it into a useful smartphone application. The team slowed to a near halt. It had collected several hundred ideas from many different sources and consolidated them into a massive database. The team couldn’t possible manage the abundance of ideas and it was unable to move forward.

3. When you stray from your core: Over-innovating may be keeping you too busy to seek new ideas where it counts the most – in your core competencies.

Example: Kodak deployed way too many innovation resources to its technical skills around chemistry, fluid, and photography. Kodak missed what was happening to them. While Kodak was a highly innovative firm, it failed to innovate around its non-technical core competencies: consumer insights, design, system integration, and customer loyalty. Had it developed and innovated around these, it could have used them to enter virtually any category.

4. When you drift off strategy: Generating too many ideas creates temptations to move in different directions. White space and adjacent markets start looking attractive when you are holding a handful of great ideas. But this, too, can derail an organization and cause it to move away prematurely from a market strategy that has been fueling growth.

Example: A major healthcare conglomerate in the medical device space wanted to expand to an adjacent market. It selected the anesthesia market, and it bought a bundle of intellectual property to gain entry. It wanted to enter the market with the most advanced anesthesia machine of its kind.  But the project consumed so many discretionary dollars and human resources that it drowned the main businesses that were funding it.

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GUEST POST from Drew Boyd

Responding to an article on why innovation is difficult, Tim Josling from Leura, Australia, wrote this to the editor of The Economist (January 26, 2013):
“Another useful insight is provided by something akin to Amdahl’s law in computer design, which holds that even if some components of a system are improving, the parts that are not improving will eventually dominate the performance of that system.

For example, for flights that are under 2000 miles a person will spend more time traveling to and from the airport, checking in at the airport, going through security and waiting for his bags than time spent up in the air.  Increases in aircraft speed would have less benefit that shortening the other bits of the journey time.”
Well said. In essence, this insight helps you think about the right target for your innovation efforts. Rather than try to improve the performance of you primary component, think instead about the supporting components and subsystems around it. These parts may be holding overall performance down. The customer realizes value from your main component, but then suffers from a lack of innovation in all the other activities around it.

This goes against conventional wisdom. Companies like Samsung cram more and more features into their products to improve performance, a phenomena called “feature creep.” Instead, they could be differentiating themselves by focusing on the ecosystem around their products – within what we call “The Closed World.” In doing so, they find new, unrealized value for the consumer which they will appreciate and perhaps pay for.

The bottom line: innovating the weakest link in your product or service may deliver the most value the fastest.

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GUEST POST from Drew Boyd

Loyalty is defined as a strong feeling of support or allegiance. Companies fight for it because it correlates well to product sales. The Fabulous Five (Google, Amazon, Apple, Samsung, and Facebook) are waging a spectacular battle against each other to earn customer loyalty.

A key to winning is to understand the types of loyalty. Professor Christie Nordhielm describes three types as part of her marketing strategy framework, The Big Picture:
Heart Loyalty is a strong emotional involvement with a particular brand. When a customer says, “I love my Macbook Pro,” they are exhibiting heart loyalty. We see this type of loyalty for “badge” or “neck-tie” products, products that are consumed in public and are thought to reflect something about the nature or identity of the person consuming them. This type of loyalty is very difficult for competitors to challenge because it is highly personal and emotional in nature and thus, resistant to rational appeals. Because a product choice based on heart loyalty is tied up with the consumers’ identity and ego, a competitive challenge to this choice can be perceived as a personal affront to the consumer. Heart loyal consumers don’t like to be told they should switch.

Head Loyalty is also a type of highly involved loyalty, but it is more rational in nature. A consumer exhibiting this type of loyalty generally has one or more specific reasons why she has made her purchase decision, and she readily articulates these. “I bought this car because it has the highest safety ratings,” is an example of head loyalty. Products whose attributes can be compared and differentiated tend to generate more head loyalty. Competitors seeking to steal customers exhibiting head loyalty generally need to provide a compelling, rational argument for their brand.

Hand Loyalty is low-involvement, habitual loyalty. The consumer is loyal to the product not because of an emotional or rational involvement, but simply because of a routine that she has established. Her commitment to the brand is low, and her interest in expending the resources necessary to search for a replacement brand is even lower. “This toilet paper is fine,” is a common hand loyalty statement. The challenge for competitors seeking to steal hand loyal customers is to convince them that it is worth it to think about changing – difficult to do because consumers want low involvement by definition.
Where do the Fabulous Five fit? Undoubtedly, Apple seeks and retains Heart Loyals. Some would call Apple customers zealous. Samsung and Google, on the other hand, appeal to Head Loyals. Their customers choose and continue to use their products and services based on facts. Amazon is a classic example of Hand Loyalty. Customers buy at Amazon out of habit. It’s easy and quick, and there is no need to think about.

The wild card in all of this is Facebook. Facebook as an enormous customer base, but one must question where the loyalty of these customers resides. Is it with Facebook itself, or is it with the friends one is connected to?  Facebook does a great job of giving people the chance to “Like” others, but it may be making a huge mistake of not strengthening the inherent loyalty people have to it. If it can turn people around from seeing Facebook as a necessary evil and create true Heart Loyal customers on par with Apple, it may well emerge as the winner in the Fabulous Five battle.

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GUEST POST from Drew Boyd

A tell-tale sign of the Attribute Dependency Technique is the word “smart” in any product description. Apple’s new patent for ‘smart shoes’ is a case in point. As reported by PSFK:
Apple has patented ‘smart shoes’ that would come with embedded sensors to track your activity and tell you when you needed a new pair. Instead of wearing an additional sensor, people would just have to wear the shoes, where the technology would be less visible and be a more seamless part of your lifestyle than an external tracker.

Apple’s shoe wear-out sensor would either feature as a thin built-in layer or be located in the heel. It would include a processor configured to measure the use of the shoes and determine whether they were worn out, and an alarm that informed the wearer when they were no longer providing adequate protection for their feet.
As first reported by AppleInsider, the patent described three main components: a detector for sensing how worn-out the shoe becomes, a processor to measure the shoe’s use, and an alarm to inform the owner when the shoe’s time is up. The chosen sensor could be anything from an accelerometer or pressure sensor to a pedometer or piezoelectric flexing sensor.

Attribute Dependency is one of five techniques of the corporate innovation method called SIT (Systematic Inventive Thinking). It differs from the other techniques in that it uses attributes (variables) of the situation rather than components. Start with an attribute list, then construct a matrix of these, pairing each against the others. Each cell represents a potential dependency (or potential break in an existing dependency) that forms a Virtual Product. Using Function Follows Form, we work backwards and envision a potential benefit or problem that this hypothetical solution solves.

This isn’t Apple’s first (or last) use of this powerful technique. Apple earned a patent described as an “apparatus and methods for enforcement of policies upon a wireless device.” It reveals a way to change aspects of a mobile device based on certain events or surroundings. Given this pattern of using Attribute Dependency, it would appear Apple makes regular use of this technique and perhaps the full suite of SIT tools.

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GUEST POST from Drew Boyd

Five companies are slugging it out in what may be the most competitive and unique business battle of all time. It is larger in scale with more at stake than battles in other industries including transportation, energy, and finance.

More remarkable is how different the combatants are from one another. Instead of similar companies competing (Toyota versus General Motors, for example), these companies hail from different business bases: an electronics manufacturer, a lifestyle computing company, an online retailer, a search engine, and a social network. In order: Samsung, Apple, Amazon, Google, and Facebook. I call them the Fabulous Five.

What are they fighting for? They are fighting for the right to define what they are fighting for. It is a category yet to emerge. The battle is about who can get the largest numbers of customers that generate deep and meaningful insights. Each company wants a massive following of human beings using their products and services in a way that generates monetizable information twenty four hours a day, seven days a week. Each of the Fabulous Five has a strong and growing foothold to do exactly that.

What about traditional powerhouses like Microsoft? Microsoft fell behind and is trying desperately to catch up with acquisitions (think $8.5 billion for Skype). Microsoft will regress into a word processing, server, and gaming company. Blackberry? RIM lost one million customers in the last three months of 2012. Motorola? Sony? HP? Yahoo? They are watching the battle from the sidelines. PC’s are becoming irrelevant as the tablet and smartphone takes hold.

That said, there are some potential challengers to the Fabulous Five. Twitter, for example, has an impressive subscriber base generating 500 million tweets a day that are being archived by the US Library of Congress. Despite the enormity of Twitter, it has a serious gap. Twitter (the company) lacks a way to own the insights being generated. Twitter is just an advertising portal. More concerning is the Fabulous Five can encroach this space fairly easily. Some already have.

Which of the Fabulous Five will win is not a matter of financial resources. What matters is their core competencies and their ability to stretch those into other domains. More important is what each company learns about consumers to stretch further.

Who has the advantage?  Let’s look at sheer size and scope of each.

Google averages nearly five billion searches per day. Insights about keywords used to search the Internet are extremely valuable. Google learns what it takes to make websites search engine friendly. It sells that to companies who want their websites optimized. Google’s Droid operating system gives it presence in smartphones. Now they seek ways to stretch into consumer electronics.

Amazon leads the nearly $300 billion online retail space. It had nearly 8 million unique visitors on one day (Black Friday). Amazon learns how people shop, how they compare, and what they are willing to pay across a wide range of consumer products. It is stretching itself into the smartphone arena. Amazon will continue to make bold moves.

Facebook has over one billion users. Despite all the criticism about its privacy policies, Facebook has an enormous advantage in learning how people socialize, communicate, and visualize their relationships. But it lacks a smartphone, entertainment platform, and shopping presence that others have.

Samsung leads in technology development the way that Apple leads in design. Samsung is well managed and aggressive. It has massive resources to put hundreds of millions of handheld units into any region of the world. The question is what they do with it – how much of the information stream will come from the unit versus the operating system within that unit. Samsung knows it needs its own smartphone operating system to compete with Google.

Apple is the most valuable company on the planet with a fiercely loyal base of customers across every demographic. It wins on design, integration, and service. More than the other combatants, Apple cuts across a wider swath of a person’s daily life. Its next strategic move will likely set the tone for the next wave of battles. Fierce patent skirmishes with Samsung and others will subside so they can all focus on with the real battle – earning loyalty and staying relevant.

The common theme for all five is innovation – the ability to stretch into other domains and create new value systematically. The choices they make to compete will be topics of future blog posts here. 2013 is sure to be a milestone for this epic battle.

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GUEST POST from Drew Boyd

Giving your employees a voice in matters boosts their creativity. New research shows that, over time, procedural fairness (giving people the opportunity to express their views) has a positive maintaining effect on creativity whereas stifling their views decreases creativity.

Bernhard Streicher* and his colleagues assigned twenty three University students randomly to one of two groups: treated fairly (getting a chance to voice their ideas) or treated unfairly (not given a chance to express themselves). Students were given a different creativity task over four successive weeks. They were told that a committee would rate their results. After the completing each of the tasks, the students in the “fair group” were given the opportunity to explain their ideas and that the committee would consider this information in the evaluation. The “unfair group” was not given this opportunity. Ideas from both groups were evaluated and scored (blinded) using standard assessment techniques.

Over the four weeks of the study, students in the fair group maintained their creative output while students in the unfair group declined. Interestingly, there was no difference in creativity between the groups in week one. Over time, however, the effect of fairness kicked in.

For leaders of innovation teams, letting your employees express themselves helps maintain a culture of innovation. But the key is to be consistent over time. Don’t let distractions or a crisis cause you to change the rules. Give them a chance to speak about anything related to the innovation challenges you face: focus, methodology, budget allocation, team formation, and so on. But most importantly, as the study points out, let them speak about the nature and value of their own ideas.

*Berhard Streicher, Eva Jones, Günter W. Maier, Dieter Frey, and Anneliese Spießberger, “Procedural Fairness and Creativity: Does Voice Maintain People’s Creative Vein Over Time?” Creativity Research Journal, 24(4) (2012): 358-363. image credit: megaphone image from bigstock

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GUEST POST from Drew Boyd

New research from Johns Hopkins University suggests that having our ideas rejected tends to boost our creativity output.

Sharon Kim and her colleagues found that when most of us experience rejection, it can actually enhance our creativity, depending on how we respond to it. The paper, titled “Outside Advantage: Can Social Rejection Fuel Creative Thought?” was recently accepted for publication by the Journal of Experimental Psychology. It also received a best-paper award at the Academy of Management (AOM) conference held this month in Boston.

As reported by Behance:
In the first experiment, participants were given a series of personality questions and told they would be considered for participation in several group exercises in the future. When the participants returned to the laboratory a week later, some of them were asked to complete a few tasks before joining their group (inclusion), others were told that none of the groups had chosen them and they would need to complete their tasks independently (rejection).  When they calculated the results, the researchers found that “rejected” participants significantly outperformed those that were included in a group. Consider the difference between those who respond to rejection by sulking versus those who respond by rolling up their sleeves and thinking “I’ll show them.”
The results were conclusive: rejection breeds creativity, especially for those who consider themselves highly independent. In final a follow-up study, the researchers found the same trend using a different measurement of creativity.

For practitioners, how can this phenomena work to your advantage? When managing individuals or teams, the time will come when you have to say ‘no’. In that moment immediately after rejecting a person’s viewpoint, you want to let it sink. Don’t try to minimize the impact by rationalizing the decision or by other means of making the person feel better. But the key is to assign the rejected person right away to a new and important task. Put them on a project where they can prove themselves and “get even.” You want to let their creative juices flow.
“While it is never a comfortable experience, the feelings of rejection can actually help us access our more creative selves. Free from the expectations of group norms, we can push the limits of novelty. Moreover, we can enhance that ability by changing the way we respond to rejection. Instead of dwelling too much on the pain of being turned down or turned aside, consider the freedom you now have to explore new possibilities and less mainstream options.”
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GUEST POST from Drew Boyd

The Attribute Dependency Technique tends to produce innovations that are smart. They seemingly know when to adjust or change in response to a change in something else. It is one of five techniques of the SIT innovation method, and it accounts for a majority of new product innovations.

Attribute Dependency differs from the other techniques in that it uses attributes (variables) of the situation rather than components. Start with an attribute list, then construct a matrix of these, pairing each against the others. Each cell represents a potential dependency (or potential break in an existing dependency) that forms a Virtual Product. Using Function Follows Form, we work backwards and envision a potential benefit or problem that this hypothetical solution solves.

Consider this unique example of Attribute Dependency: music that changes in relation to another variable. As reported by Springwise:

Since the advent of digital music we’ve seen a number of artists trying to offer something different to their fans. UK musician Gwilym Gold’s Tender Metal is a downloadable piece that mutates each time the listener plays it. The album is being released solely for the iPhone, iPad and iPod Touch. When using the app, the components of the tracks of Tender Metal are seamlessly and subtly reconfigured each time they are played, meaning that each listening experience is different from the last. Users can choose to loop tracks in order to hear it constantly shift, or shake the phone to ‘regenerate’ the piece from its current permutation. The innovation allows for endless reinterpretations of the music without it being performed live, ultimately offering a more immersive experience for fans.

Smartphones and tablets have become an important platform for these types of innovations because of their ability to track two important variables: location and time. For example, the musical band, Bluebrain, created an album called National Mall that responds to the listener’s location as they journey down the Mall in Washington DC. “As users approach tagged locations, the audio content of the album will alter to interact with the environment, thus creating a unique listening experience every time the album is played en-route.” According to Springwise:

For Bluebrain, this album is simply the start, with plans to release similar location-aware works for Prospect Park in Brooklyn, New York in the summer, followed by an album to be experienced whilst journeying along California’s Highway 1. Location-based technology is increasingly incorporated into products and services far and wide. If you haven’t already, this is one to try for yourself!

The combinations of time-based or location-based linkages to a smartphone are endless.

image credit: lucreid

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GUEST POST from Drew Boyd

Asking for help may be the most powerful yet underutilized resource available for innovators. Researchers Francis Flynn and Vanessa Bohns found that people grossly underestimate the rate that others are willing to help when asked. As a result, we more often fail to ask for help when the likelihood was very high the other person would have said ‘yes.’ Consider this study they conducted at Columbia University:
“Participants in the study were positioned in the middle of the campus and instructed to approach random strangers for an escort to the university gym, which is located at the edge of campus (the Columbia University gym is subterranean and therefore difficult to find). Before completing the task, participants were asked to estimate how many they would have to approach in order to get one to say ‘yes.’ On average, people estimated they would have to ask 7.2 people to get just one to agree.”

“In fact, they needed to approach just 2.3 strangers, on average. While people presumed that about 6 out of 7 of the individuals they approached would refuse to assist them, the reality was that approximately every other person was willing to agree to their request. Why are we reluctant to ask for help? The researchers suggest we focus too much on the other person’s cost of saying ‘yes’ (in the form of their time and resources expended to comply with the request) versus their heavier social costs of saying ‘no.’ They also suggest we may be letting a time when someone said ‘no’ weigh too heavily in our memory. The fear of rejection looms large, keeping us from risking another bad experience.”
We also tend to overestimate how harshly others will judge us if we ask for help. We fear asking for help may be seen as a sign of weakness. The other person has power over you in that awkward moment when they can say yes or no to your request. However, taking another view of the situation turns the tables. When we view power and strength as the capacity to influence others to access their resources, help-seeking is not weak, but rather a “powerful act.”

Asking for help has many benefits as the researches point out. First and foremost is you are highly likely to get the help you seek. Second, you are giving the other person a “gift” in the form of an opportunity to feel helpful and valued. Third, you will likely strengthen the relationship with the other person. Finally, you avoid the life-long feeling of regret of not asking help. Research suggests, in the long run, we regret more not asking for help than having a request rejected.

Successful innovation practitioners need help in many forms, including:
•    Advice and direction – where are the fertile areas for innovation
•    Participation in innovation programs and workshops
•    Evaluation of ideas and feedback about results
•    Support with both tangible and intangible resources

Need to innovate? Ask for help!

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