GUEST POST from Jeffrey Phillips

I read with some interest and trepidation the article in Co.Design entitled “Do Innovation Consultants Kill Innovation?“. Like many people who write for the web, I recognize a catchy title is meant to attract readers and create a distinct point of view. As a person who earns a living as an innovation consultant, of course I’m concerned when anyone seems to cast doubt on my chosen trade. So, perhaps it’s a good question to ask – should innovation become a profession – whether inside an organization where innovation titles are appearing with increasing frequency, or should we expect to see more innovation consultants as the importance of innovation creates a potential vacuum of innovation talent?

When questions like this arise, my first notion is to consider the past and look a previous disruptions in thinking or in technology. I’d like to consider disruptions because that’s what I believe is underway – a disruption to how businesses run. The traditional business methods are being swept away by increasing levels of global competition, free trade, economic calamities, the fact that the internet is lowering costs of entry into many businesses, increasing consumer demands and decreasing product life cycles. I could go on but frankly I don’t need to. Innovation is becoming an ever more important capability, and that disrupts the status quo, business as usual way many businesses are run and have been structured. So, if you believe as I do that a disruption is under way, then it makes sense to see how people and firms reacted to previous disruptions.

Take, for example, the development of the model-T. When Ford made individual ownership of a car practical, it disrupted a lot of the existing order. The example we all use is “buggy whips”, since the need for buggy whips plummeted. But think about all of the other disruptions – the need to produce and distribute fuel, the need for mechanics to work on the automobiles, the labor saving techniques and applications of a Model T. Life and society were disrupted by the Model T. And in that disruption rose a number of professional skills – mechanics, fuel refiners and distributors, road builders and many others. These skills and professions became ever more important as the impact of the automobile was felt, and the automobile would not have been as successful if these professions that supported the automobile did not arise. Did people decry the rise of the mechanic? Were people upset that they didn’t need to drill, refine and pump their own gas? No, these professions and others simply enable people to move ahead and use the new tool (the automobile) as effectively as possible. Today we don’t question the value of a mechanic to fix our cars – thankfully, given how powerful and complex they’ve become. Why would we think differently about professions that accelerate and improve innovation?

In any disruption, there are people who take advantage of their knowledge or simple showmanship to develop products or services that extract value from customers rather than delivering value to customers. Whether those people are the internal managers who have innovation titles (the “custodians” of the article) or innovation consultants (“the word slingers”) make no difference. Every hype cycle has it’s charlatans, which will be exposed soon enough, and every technology or capability has its experts who help others take advantage of new tools, methods, products or techniques. Will the authors now complain about Lean and Six Sigma Blackbelts?

The authors rightly note that some firms – Apple, Google, GE and others have a culture of innovation that seems to propel these firms toward ever more innovation. They also make the claim that these firms have entrepreneurs at the helm. Seems a stretch except for Google anymore. While I admire the leaders of 3M and P&G and GE I’m not aware that any of them were at any time an entrepreneur, so the hallowed sainthood of entrepreneur leaders is misleading if not untrue. Most firms aren’t lead by innovative, charismatic entrepreneurs and don’t have a “culture of innovation”. They have cultures that sustain “business as usual” which conflicts with innovation. Introducing a new tool or capability often requires either exceptionally bold internal managers (what the article derides as custodians) or insightful change agents from the outside (the dreaded word-slingers). Change doesn’t happen by itself – it happens through catalysts.

The article then makes claims that refute its own point, noting that industries like high tech, pharmaceuticals and the movie industry don’t hire “dozens of consultants”. I’m not sure which firms the authors have worked with, but having worked in high tech and pharmaceutical, and as someone who actually watches movie trailers I can assure you that all of these firms work with consultants ranging from the strategy houses (McKinsey, Booz, Bain, BCG, etc) to innovation boutiques, and, what’s more, firms in these industries are actively experimenting with “open innovation” to identify excellent ideas in their industries and in the wider world. They aren’t waiting just for good internal ideas. Whether or not these consultants add value is a relevant question – but stating that these firms don’t have specific processes or don’t partner with consultants is almost laughable.

The authors make another point at the end that I find interesting and moving, but a bit naive. They say that businesses need to provide the means to offer “freedom to explore the high-risk messiness and the fuzzy, nonlinear ways” in which innovation grows. Hmm. What other functions or processes within a modern organization could be described as fuzzy, high risk and messy? Finance? No. Accounting? No. Product Development? No. In fact no process or method that is used to drive any revenue or cut any cost in a business would survive if it were fuzzy, high risk and messy. Large businesses don’t operate that way. Even in firms that have a strong innovation culture, there are still defined innovation processes, people with innovation titles and on occasion even the best innovators use innovation consultants!

The authors have a point – some innovation can be risky, messy and non-linear. But that doesn’t mean the entire innovation capability should be left completely to chance! For anything to get done in a modern business, someone needs to be responsible and there needs to be some structure, some knowledge and some best practice. We can’t wait for the immaculate conception of innovation – we need to provide knowledge, tools, understanding and some people and process who understand how these things work.

Yes, just like the band director in the Music Man there will be people who take advantage of the situation to offer services that don’t work, looking to make a quick buck. But I think most of my clients will agree that many innovation consultants ACCELERATE innovation and build innovation capabilities rather than “kill” innovation. So, should innovation become a profession – either as a staff or line position within a firm, or as a consulting position outside the firm? Until the processes, tools, capabilities and methods of innovation are fully understood, fully interwoven into the culture and processes of a company and taken as second nature, I’d argue there’s a huge need for innovation professionals. The real trick, at least what the article is pointing out, is divining the difference between the Henry Hills ( of Music Man fame) who make promises but fail to deliver, and the innovation professionals who create real value.

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GUEST POST from Jeffrey Phillips

Is it a fools errand to try to create a culture of innovation?

I was reminded of the Forrest Gump mantra recently – stupid is as stupid does – and it got me thinking.  Strange, almost ironic, isn’t it, that a saying like that could make one stop and think?  Or perhaps I’m just living the mantra.  But there’s a deeper meaning here for innovators, and for those who babble endlessly about creating a culture of innovation.  What are some of the challenges?

First of all, most “cultures” aren’t designed.  When Timmy and Jane decide to build an entrepreneurial company, they are doing so to solve a problem or bring a  new product to the world.  Most start-ups and entrepreneurs give exceptionally little thought to esoteric words like “corporate culture”.  There are far too many pressing issues to face.  Second, culture is to a great extent driven by vision, strategy and, most importantly, compensation.  No matter how much any executive talks about the need for innovation, if employees’ compensation isn’t linked to innovation, its all just talk.  Third, since many firms lack a clear strategy and try to be all things to all people, the products and services they create necessarily have to address all needs and are tailored to the late majority and the laggards rather than the early adopter and early majority.  Want to know why your firm can’t create a culture of innovation?  It didn’t start out thinking about the importance of innovation, it didn’t create a culture of innovation as it grew and it doesn’t value or compensate people for innovation now.  Further, the customer base isn’t all that keen on innovation.

Once an entrepreneurial firm achieves some reasonable size, their intent shifts from disrupting the market to defending their turf.  As firms scale and grow, they lose the sense of innovation and disruption and become very much like the firms they displaced – more interested in defending existing customer relationship and markets and less interested in innovation.  As that shift happens, business frameworks, service models and compensation schemes all band together to create a business as usual framework that is about providing for the needs of existing customers and defending the firm against disruption.  There’s little incentive, motivation or focus on innovation.  The culture is increasingly attuned to short term profitability, defending market share and position and incremental improvements to existing products.
In the face of this hardened business model many firms are now becoming aware of the need for innovation – and not just occasional innovation or serendipitous innovation, but successive, repetitive innovation.  That’s when many people realize that existing corporate culture – focused on efficiency, short term financial goals and defending the status quo – must be changed to become a “culture of innovation”.  How’s that going to happen?  The existing culture was built haphazardly in most cases, in response to shifting strategies and needs over time.  The culture can’t simply shift overnight – the whiplash would be too great for the company, the processes and the people who do the important work.  Like eating an elephant, cultural shifts from efficiency to innovation must be completed one bite at a time, over a long period of time.  Which will doom the attempt since most executives and managers can’t bear to think in long time horizons.

It’s the difficulty of creating a culture of innovation that led Apple to develop the Macintosh in a skunkworks, and is what makes the magic of 3M and Google so enticing.  But the reason these firms are successful and have a “culture of innovation” is that that’s what their original structure, form and intention was.  Look no further than the development of Gore:  Bill Gore was determined to create a new kind of company and started from the beginning with a plan and a strategy that focused on eliminating hierarchies, highly integrated teams and communication and the support of innovation across the organization.  Gore, and other companies like that, were built from the ground up for innovation.  Most companies are now trying to attach innovation scaffolding to an existing business as usual culture, and finding the connection treacherous at best.

So, the question becomes – is it a fools errand to try to create a “culture of innovation” in an existing company that does not emphasize innovation?  Should all innovation in these firms be attempted in a skunkworks?  Can we shift teams and people to begin to embrace innovation as part of the culture?  I think the answer is “yes” – the only other response is to accept a slow slide into oblivion.  What we need to do now is understand what it will take to shift a business as usual culture to a culture that accepts and then embraces innovation.  That is not a quick journey, nor is it an easy one.  Many people, many trusted perspectives and long held beliefs may need to fall in order to achieve that.  Time, patience and commitment – attributes not often attributed to American business – must be applied to make the shift.

Eventually, though, it is the people of an organization who determine the culture.  What’s good about this fact is that people are rationale actors – often concerned about change but open to influence by visionary leaders who show the way and by programs that demonstrate innovation is rewarded, not degraded.  Executives must decide that innovation is important, and communicate that decision through actions that demonstrate the importance of innovation:  what they value, who they promote, how they compensate and reward.  Middle Managers must become innovation accelerators rather than efficiency experts.  Clearly, this will take time, focus and energy.  And that’s why a culture of innovation is so unusual, and so difficult to achieve.

imagecredit:intmedny

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GUEST POST from Jeffrey Phillips

I’m upset about all the false promises and hot air I’m hearing right now, and I’m not even talking about the presidential race. I’m talking about all the misguided talk by executives about “innovation”. Yesterday’s NPR interview with new Yahoo CEO Scott Thompson provides an excellent example. I don’t know Scott Thompson and I have no animus toward Yahoo, or for any of its competitors, so what I am about to write should be viewed in the light of a neutral observer trying to wrap his head around some “innovation” claims. Because increasing, when a new CEO starts talking about “innovation”, grab your wallet and invoke the Reagan doctrine – trust but verify.

It’s become almost a requirement for CEOs to expound on the need for innovation. Every quarter like clockwork we see a survey from BCG or PWC or some other management consulting house telling us that CEOs rank innovation as the second or third most important initiative their firm should undertake. I’d like to see the data on the question that goes unasked – how many of those same CEOs who talked about the importance of innovation last year made actual investments in innovation initiatives and programs? While many CEOs are talking about innovation, far too many aren’t actually implementing innovation.

Unfortunately the press lets them get away with this. I was listening to the news on the radio when Scott Thompson was announced as the new CEO of Yahoo. There’s no doubt that Yahoo needs new focus and direction. It can’t decide whether it is a media company or a search company or something else. When asked what he intended to do, he said he wanted Yahoo to do more “innovation and disruption”. That’s either the most optimistic or the most cynical statement I’ve heard in years.

Why cynical? Because it plays on what is “hot” right now – innovation – without providing any specifics in terms of goals, or outcomes or investments. By talking about innovation, he hits all of the right notes in the press, but doesn’t provide any insight into what he means by innovation, and this is a critical point – when executives talk about “innovation” we need to know what innovation is meant to do. Suppose for example we simply inserted the word “hammer” for innovation in many of these presentations. We’d look askance at a person who repeatedly talked about hammers without giving us insight into what he planned to do with the hammer – build or destroy? But we all nod at the sage reference to innovation. Further, his statement is cynical because Yahoo hasn’t been demonstrating much innovation capability lately, and hasn’t been known for innovation.

What’s Yahoo’s record of innovation? They were one of the first search engines, but were disrupted by Google. Since then I’d have a hard time identifying a record of innovation from Yahoo, and certainly no record of disrupting other competitors or markets. Yahoo has more experience being disrupted than acting as a disrupter, so what is Thompson going to build on? What initiatives, investments and programs will he enact to make Yahoo more innovative? Will innovation be used to drive more growth, increase differentiation, disrupt another market? Why, when Thompson made a point of talking about innovation and disruption as key goals, didn’t someone ask for further clarification?

Contrast Thompson’s throwaway line about innovation with Arthur Lafley’s statements about innovation at P&G. Lafley made clear, definitive statements about innovation, such as setting a goal that 50% of P&G’s products would originate from ideas from outside the company. That statement confounded the market because P&G has a strong internal R&D team, and it set a goal that could be easily measured and quantified.

I hope Thompson succeeds in restoring Yahoo to its former prominence. He and other CEOs are only guilty of latching onto a concept that’s poorly defined, but which, when done correctly can drive increases in revenues, profits and market share. Innovation is almost like alchemy – it seems to turn base metals into gold. But just like the early alchemists, it seems that only a few people who attempt it have much success, while most of the alchemists are full of empty promises.

What I’d like to hear from Thompson, and other executives is a clearly delineated strategy, which emphasizes growth, or differentiation, or operational excellence, or customer intimacy, and then hear them talk about how innovation is going to help them achieve these strategies and retain leadership in these strategies. Right now we are putting too much emphasis on innovation – a tool which should be used in service of strategy, rather than putting the emphasis where it belongs first – on the strategy. This reminds me of the concept of “strategic bankruptcy” that another writer says Best Buy is guilty of. I don’t know if Best Buy is guilty of strategic bankruptcy, but I do know that many firms seem to lack clear strategy, which makes doing meaningful innovation even more difficult.

Will some journalists please follow up on a quarterly basis and ask this follow up question to Thompson – if innovation is important, what investments are you making and what results are you seeing?

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GUEST POST from Jeffrey Phillips

If you are like me, a person who is interested in innovation, you’ve probably experienced the following scenario.  A meeting is called, where an executive announces that he or she wants more innovation.  Other heads nod sagely, having seen this play before.  The executive directs attention to the innovation facilitator, advocate or consultant in the room.  At that moment, time freezes, as the shields go up and everyone searches your face to determine what wild party trick you have up your sleeve.  It’s clear from that moment on that it’s “us” versus “them”, and while great outcomes are expected, they’ll happen on another person’s watch.

Having lived my life as an innovation consultant, I’m familiar with the unintentional cold shoulder, the lack of belief and the patient settling in, waiting for the party trick to emerge.  That’s my business, so I’ve learned to lower expectations about immediate outcomes and hopefully build consensus for change.  But what about an internal innovation advocate?  Must they constantly be the virus that seeks to infect corporate cells that simply don’t have receptors?  How does an organization become truly “infected” with innovation when most of them have anti-bodies actively pursuing and eliminating any wayward innovation viruses?

Since we are talking about infections, let’s start at the cell level.  At the cell level, receptors are located on cells and receive instructions for the cell to do something.  There are two types of chemicals that work with receptors, interestingly called agonists and antagonists.  An agonist is a drug or chemical that binds with a receptor to help it do its work and engage the cell.  An antagonist is a drug or chemical that blocks or binds the action of another chemical or drug, blocking the receptor.

In most organizations, the receptors are attuned to short term gains, maintaining business as usual and slowly, steadily growing the company.  Antibodies or “antagonists” act against ideas or actors that suggest concepts that would conflict with these receptors.  Innovation is often a foreign element that seeks to enter the corporate cell, but finds few receptors and most of those are blocked by antagonists who seek to maintain the existing order, protect business as usual.  Innovation is viewed by the corporate body as an invading virus, bent on destruction rather than as a positive force with beneficial outcomes.

To overcome these corporate barriers we need to do three things:  reduce antagonists, create more receptors and make innovation less of a foreign substance and more familiar to the cellular structure.  To accomplish these goals, corporate bodies need to do the following:

• Reduce antagonists.  In the cellular world, antagonists block messages or disable receptors so cells can’t or don’t do what they should.  In the corporate world, antagonists are represented by corporate culture, which dissuades people from taking actions, compensation, which encourages consistency over change, history and perspectives, fear of risk and uncertainty.  Until these antagonists are removed through changes in corporate culture, communication, compensation and reward structures, innovation will always be viewed as an invading virus rather than a beneficial cell.

• Increase receptors.  The more receptors available for a specific signal, the more likely the signal is to be recognized and enacted.  If only a few receptors exist and antagonists are plentiful, the messages don’t get through.  In a corporate world, we need more people in management roles who are willing to try out innovation initiatives and programs.  These can be existing people, newly motivated and directed to be more open to innovation, or new people hired for their perspectives and attitudes toward innovation.  Good ideas that aren’t received and aren’t supported aren’t useful.

• Make innovation familiar. Going beyond the cellular level into the DNA level, our DNA for years has baffled scientists, who at one time claimed that over 95% of DNA was “junk”.  Now, scientists are realizing that our DNA have incorporated many different types of information, which allowed us to evolve.  These “junk” DNA may not control our destiny but help us adapt.  In a corporate setting, we need to add innovation into corporate “DNA” to make it more familiar to business as usual and to help the organization adapt.  As long as innovation is seen as an external intruder or virus, we will resist it and create antibodies to suppress it.  Once it becomes part of the DNA we’ll develop receptors and agonists for it.

So the next time I’m in a meeting and getting the feeling I’m the virus and the executives around the table are antagonists (in the receptor sense) I’ll try to introduce some agonists or seek to introduce more receptors in the room, with the ultimate goal of introducing innovation into the DNA, so innovation is seen in a positive light as opposed to being viewed as a virus.

As innovators, we need to find ways to make innovation infectious.  That means innovation needs to seem more valuable, more effective and less risky than the existing state of affairs.  It also means reducing the antibodies and inoculations against innovation in the team you are trying to convince.  Learning from nature is important here as well.  Some of the most infectious diseases are spread by 1) fun activities or 2) by many carriers or 3) being easy to transmit.  New ideas and the methods and tools to realize them, to become infectious, must be fun to do, or at least more fun and interesting than existing work, supported by many people, who can transmit the ideas easily.  The ideas need a short incubation period, to take root and grow quickly.  The ideas need to be resistant to inoculations, like “we’re not innovative” or “that’s too risky”.

In short, we innovators could learn a lot from infectious diseases.

imagecredit:keyhealthcare

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GUEST POST from Jeffrey Phillips

Every once in a while someone can illuminate a point so well that you simply have to stop and pay homage.  Paul Sloane crystalized a key point about innovation recently when he tweeted:

“Businesses are good at getting better but poor at getting different.”

The reason this crystalized one of the key innovation issues is that it reminded me of my early economics classes.  I suspect you remember those somewhat simplistic “guns vs butter” tradeoffs.  Should a country produce more guns, or more butter?  Who benefits from the selections?  What happens if more butter is produced?  Are fewer guns necessarily produced if more resources are shifted into butter production?

If this rings a bell from somewhere back in freshman economics, but at the same time seems too simplistic when viewed in light of the modern economic enterprise, then consider this simple question:

What is the appropriate balance between efficiency and innovation in a business?

Eliminating all other factors, how much of your time, your efforts and your resources should be invested in driving ever more efficiency in your organization?  How much of your time, effort and resources should be invested in innovation?  It’s not until we think of these as investments and force specific tradeoffs that the conundrum becomes clear.  Just like guns and butter, we probably need a reasonable investment in both efficiency and innovation to thrive over time.

A national economy will demand guns for defense and butter for nourishment – those demands will shift and evolve depending on the threats the economy identifies externally and the needs of the population internally.  Businesses, with timelines and incentives that are somewhat different, focus on short term financial results, which tends to shift the balance between innovation and efficiency toward efficiency.  Most initiatives that focus on improving efficiency have an immediate, and positive financial impact.  Thus efficiency is rewarded, and initiatives that are rewarded are repeated.  Innovation often has a negative short term impact – costs without an immediate benefit – so innovation is far less likely to produce a short term financial benefit, and therefore much more difficult to do.  Slowly, over time, the scales shift from a balance between efficiency and innovation to ever more efficiency and increasingly less innovation.  Eventually efficiency is well understood and easily accomplished, but it has ever decreasing marginal returns.  Innovation, on the other hand, becomes more difficult the less it is practiced, and is viewed as risky, uncertain and become even less likely to be taken up.

Clearly, every business needs both – a focus on efficiency and a focus on innovation.  My new book Relentless Innovation provides examples that demonstrate why a balance between innovation and efficiency is so important, and extracts lessons from firms that manage to do both well simultaneously – P&G, Apple, 3M, Google and Gore.  These firms have capabilities and investments that other firms would do well to emulate, because an ever increasing diet of efficiency will create a firm that is exceptionally efficient, but indistinguishable from its competitors.

The economics example of tradeoffs between guns and butter is meant to help students think about investments and tradeoffs.  Both guns and butter are necessary for every economy, but in different degrees.  Likewise, innovation and efficiency are necessary in every company.  Establishing “how much” investment in efficiency and innovation is necessary, and then carrying out that strategy, is very important.  Firms that can achieve an appropriate balance will thrive, while firms too focused on efficiency will become one trick ponies.

Who would have thought that the guns vs butter tradeoffs could illuminate an important business challenge?

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GUEST POST from Jeffrey Phillips

Every sport has a specific team size. Basketball allows five players on the court at one time. Baseball allows nine on the diamond. American football and international football both allow eleven on a side. It’s a mystery how these numbers were arrived at, but they’ve become codified in the sports we play.

Other initiatives and efforts have a “right” number. Three wise men. Three musketeers. Four horsemen of the apocalypse (just saying). However, the old adage is that “too many cooks spoil the broth”, and like many old adages it carries a ring of truth. There’s an appropriate team size or number for almost any effort, and we at OVO have decided that the magic number is eight. As in, eight people.

In my experience innovation suffers from the Goldilocks phenomenon, not necessarily too hot or too cold, but either too few participants or too many. In the first case, innovation seems challenging and requires a lot of work with little possibility of payoff, so only the hard core dedicated types show up. In the latter case innovation seems like the approved strategic flavor of the month, so lots of people show up but don’t, you know, expect to have to do anything.

When you have a team that’s too small, there are too many perspectives missing and too much work for the team to do effectively. A small team rarely spans all of the business lines, business functions and insights necessary, so the team is constantly calling on other people and eventually makes itself a nuisance. Conversely, when the team is too large it is unmanageable and easily distracted. People who probably shouldn’t be there, or people who are there to make sure they don’t receive assignments simply get in the way of people who are actually trying to get things done.

But on the whole, smaller teams are more powerful than larger teams, for this reason: only smaller teams can grapple with disruptive ideas. Getting people to think disruptively means getting them to think outside their comfort zone and outside the products, services and strategies of the business. If even one person can’t or won’t free themselves from those confines, then the team will be dragged back down by the doubter. The larger the team, the more likely it is that you’ll have a doubter. And the power of one person who can’t or refuses to get on board with a new perspective or scope is enough to drag down the rest of the team.

So, in most regards, five people is at the lower end of a viable innovation team, simply due to the workloads and the range of experience and perspectives. Ten is probably at the upper end, due to the cost of the commitments and the increasing likelihood of people who simply won’t get on board. Eight is a nice, round number somewhere in-between, and the number we’ve found to be about the best for innovation. Oh, you might say, that seems on the high side. You’re right, and we err on the high side in this case because many innovation teams consist of people who have other, important jobs, so they can’t attend every meeting. Working on a quorum philosophy we always keep working and expect absent members to catch up. This philosophy works if you have eight members and two can’t come, but becomes difficult when you have five members and two can’t come.

There is another aspect of the Goldilocks phenomenon mentioned above. Team members can be too hot (too excited about their own ideas) or too cold (assigned to the team but with little desire to be on the team). Smaller teams can be formed around volunteers – people who WANT to be there, while larger teams are formed from people who were TOLD to be there or people who want to be sure they are represented but don’t actually plan to do any work. Like Goldilocks and her choices, you don’t want too hot or too cold, too large or too small, you want the team and the people to be “just right” for the effort. That magic number for innovation is eight.

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GUEST POST from Jeffrey Phillips

I’ve been catching up on some reading, and thinking about my own experiences working with customers who are trying to become more innovative.  A pattern is beginning to emerge that has been sitting there in front of me for years, but is only now becoming clear. Perhaps, like viewing a pointillist painting, one needs the proper distance or perspective for all of the dots to come into focus as a picture.  My realization this week has less to do with viewing a picture, and more to do with other forms of communication and thinking that block innovation.

I read today a paper by Malcolm Gladwell, published in May 2011, which tells some interesting stories about innovation.  Gladwell’s point is that all innovation is basically evolution of an original concept.  For example, Apple didn’t create the idea of the mouse, it borrowed it from Xerox PARC, who borrowed it from a researcher at Stanford Research Institute, who probably borrowed it from someone else.  Gladwell writes about this continuous evolution as a model for innovation, stripping away the things that aren’t necessary and introducing simplicity to reach a larger audience.  But what’s also interesting about the story is the number of times the innovators he interviews were told “no” about their innovations.  So here’s the critical question:  do we innovators lack the ability to communicate to others the value and importance of our ideas?  Do the “business as usual” folks who predominate most businesses fail to hear and understand our messages?  Are innovators from Venus and business people from Mars?  Do we speak different languages or simply not value the stories we are told?

Reading this article and thinking about what I learned writing Relentless Innovation, I’ve come to realize that perhaps the most important capability of good innovators is their ability to communicate.  What I mean about the ability to communicate is that the excellent innovator communicates the value proposition of his or her idea in the correct manner, using the correct channel, and touching on the correct needs and values of his or her audiences.  Note that I used the plural – audiences.  Because an innovation within a corporate structure has many audiences and has to run many traps not simply to succeed, but to remain true to the initial vision.

The first audience is the executive or sponsor who has a problem that needs solving, or needs an interesting and valuable new product or service.  These sponsors must exist to fly cover for the innovator, so the innovator must be able to demonstrate that his or her idea helps an executive achieve an important business goal or corporate strategy.  Key message:  why this idea links to important goals or strategies.

The second audience is the people who have to move the idea from concept to product or service.  Usually an idea is different from and in opposition to much of the existing internal investment and process.  That means the innovator must be able to demonstrate to people who are used to doing work in often diametrically opposed processes that the idea is valuable enough to short circuit or change the existing ways of deciding and working.  Key message:  why this idea requires a different development process than existing “business as usual”.

The third audience is the financial team, who will want to understand the ROI of the innovation as quickly as possible.  The innovator must assuage the financial team’s worries about the “R” – return, revenues and profits, because the “I” – investment, costs, and so forth are easy to calculate.  This means the innovator must be able to tell a story about his or her idea that is also a financial story.  Key message:  why this idea, or any idea, must be judged differently from existing concepts, while recognizing the importance of return.

The fourth audience is the development team.  Every new idea generated and transitioned to a product or service development team faces an uphill climb, as these teams are already overwhelmed with existing priorities.  What is so important about the new idea that should land it on the top, overriding existing priorities?  The innovator has to be able to tell a story that sells the importance and value of the idea, and why it should take precedence over the existing priorities.  Key message:  why this idea is so important it should take precedence over other priorities.

The fifth audience is the customer base.  Why should they adopt a new product or service that often demands that they change buying habits or behaviors?  What is so valuable about the product or service that will encourage them to switch?  Key message: This product or service solves an important need that you have, in such a way that you may be willing to change your buying habits or behavior in order to receive the benefits.

Note that at each interaction with an audience, the messages about the idea, or product or service, can be modified, watered down, manipulated and changed.  In fact this is often what happens, and why a good idea at the outset becomes a mediocre idea in implementation – the concept, messages and stories about the idea change subtly in every interaction and telling, reshaping and refocusing the idea.  This is perhaps why Steve Jobs was such a consummate innovator – he was able to define a message about an idea and carry that message forward through all of the audiences in a relatively consistent fashion.

Many innovators and people in the innovation community will argue that storytelling is a vital aspect of innovation, and I think they are correct.  But while storytelling is important, it’s telling a consistent story, and the right story, and a compelling story, over and over again that drives an idea from an interesting concept to a market winner.  Innovators need not only have great ideas, they need to be able to tell good, consistent stories about their ideas, or partner with people (again, Jobs and Wozniak as examples) who can craft and communicate the story.  Ultimately Jobs’ genius wasn’t in design, or technology, or integration, or user experience.  Jobs’ genius was in the storytelling – what he told his team, and what he told his consumers.

imagecredit: simplyzesty

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GUEST POST from Jeffrey Phillips

I’m big on irony, so it’s always exasperating yet amusing when my clients realize that attributes or characteristics they’ve thought of as strengths are revealed as barriers or weaknesses.  As organizations grow and mature, they stop trying to evaluate their business models and the factors that sustain those models, and begin to take factors within the business model for granted – or argue in their defense.

While older, mainline firms are comforting themselves by talking about how unassailable their business models are, innovators and new entrants are working to make those factors unnecessary or obsolete.  So Blockbuster has all the valuable real estate for movie rental stores locked down.  Yep, that’s a barrier to other firms who plan a real-estate based strategy, but perhaps not so important to an innovator who seeks to innovate through completely different channels, rendering an advantage in real estate obsolete.

So it will come as no surprise to you that I come today both to praise Lean and Six Sigma, along with a number of other management methods, tools and mantras, as well as to bury them.  Nietzsche is supposed to have said that whatever doesn’t kill you makes you stronger.  Perhaps the corollary is true as well – whatever makes you stronger makes you blind to your potential weaknesses and faults.  Like Blockbuster, which was fighting the real estate battle while NetFlix was shifting the competitive landscape to mail and then direct downloads, many firms in the US are still fighting the efficiency and cost cutting battle, while the battlefield is shifting imperceptibly toward innovation.  The tools and techniques used to further hone existing business models to ever higher effectiveness and productivity are exceptionally valuable in the short run, and are building ever increasing barriers to innovation.  In many firms innovation and efficiency aren’t simply at odds, they are at war.  And efficiency is winning.

Efficiency is winning because, to continue the warfare analogy, all the troops have been trained in the cost cutting and efficiency models and methods.  We have ninjas stalking through the business reinforcing Six Sigma and Lean concepts. The coin of the realm is paid out to reward efficiency gains far more frequently than innovation outcomes.  Business models, processes and methods are much more attuned to efficiency. As these concepts are reinforced, they remind the rest of the troops to place emphasis on reducing risk, reducing variability, reducing costs.  When an officer (read executive) argues for a new battle plan, based on innovation, the majority of the organization looks on in horror.  No one is familiar with those tools and methods.  They introduce risk and uncertainty, with a very indefinite outcome.  And innovation doesn’t reinforce the strengths of the existing business model and strategies – in fact it may weaken or destroy the very fortress the firm has worked so hard to build.  While I’ve written this in rather florid language, make no mistake, there’s a battle underway in every firm between efficiency and innovation, and efficiency is poised to win in most organizations.

It doesn’t have to be this way.  Many of the Relentless Innovators I write about in Relentless Innovation are both innovative (recognized by consumers, customers and their industry competitors as leaders in developing valuable new products and services) and are also efficient (they use their inputs and their resources at least as effectively as their direct competitors).  So some firms seem to have bridged the gap, and are using both strategic capabilities in harmony, rather than seeing them in conflict.

To compete in the future, deep capabilities in both strategies will be vital.  A firm must be efficient to compete, and must be innovative to remain top of mind with customers.  Rather than allowing innovation to be constantly overwhelmed by the far more experienced and superior forces of efficiency, it may be time to call a truce between what are often unfortunately opposing forces: innovation and efficiency.

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