Author Archives: Jeffrey Phillips

About Jeffrey Phillips

Jeffrey Phillips thrives at the intersection of strategy, sales, marketing and innovation, and enjoy helping companies grow and find new opportunities or create new products. Jeffrey also teaches part-time at SKEMA US, leading graduate level classes on strategy, new product development and digital marketing and is the author of “Make us more Innovative”, and innovateonpurpose.blogspot.com.

You Cannot Survive Doing More of the Same

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GUEST POST from Jeffrey Phillips

It seems so funny, looking back on a meeting I attended about 20 years ago. At that meeting a good friend was presenting a new book, entitled Who Moved My Cheese? He was recommending this book to all of us in the leadership team of a mid-sized ERP consulting firm. Of course most of us read it and thought – hmm – that’s interesting. We need to get better at accepting change, instead of seeking to sustain the status quo.

You don’t need to worry any more about someone moving your cheese. If you are still moving in the slow, certain ways of most businesses, your cheese was consumed by another firm a long time ago, and shortly you’ll notice that the cheese supply seems very limited. In fact you’ll probably discover that the entire cheese supply has been cornered and many of your competitors have shifted their diets to cheese flavored tofu or something else. It’s no longer a matter of IF your cheese will get moved, it’s not even a question of WHEN your cheese will move. The real question is: can you move as quickly as your cheese is moving – or better yet anticipate where it is going to get there first?

Your survival depends on your ability to change

In the archeological record we can see how animals evolved, changing as threats or conditions changed. We can even see this in the human record. These changes took millennia to unfold, and slowly but surely plants, animals and people evolved as well.

Today, the pace of change is accelerating and it is faster than ever. Perhaps not in how we humans evolve – but definitely in terms of how businesses and technologies evolve. In the not so distant past, businesses prided themselves and their products on being “build to last”. Today, we need to think more about “built to change”, more agile, more nimble and more creative than in the past.

Innosight has completed and published some nice research which illustrates the accelerating pace of change, looking at the life span of major corporations on the S&P 500 list. The average lifespan of a company on the S&P 500 is down to less than 12 years.

I think – I hope – that you’ll agree that in order to remain relevant, individuals and companies must adapt to new situations and new conditions. We must change in order to stay relevant.

What is innovation but directed change?

Innovation – finding new ideas, spotting new opportunities – is simply proactive change. It is something that you engage in proactively, rather than waiting for others to discover new needs or markets and then attempting to copy. I think that many of the concerns or fears about innovation closely mirror concerns about change, because both seem unfamiliar, require individuals to leave behind trusted frameworks and approaches, and both require exploration of something new, that may or may not have value.

The fact that most companies aren’t good at change, and equally aren’t that great at innovation, shouldn’t come as a surprise. Innovation is change, and most organizations don’t do change well. Instead of innovation, most prefer to improve effectiveness and efficiency of what they are already doing, doubling down rather than creating something new. Until organizations are willing to recognize the need for faster, more rapid and more continuous change, they won’t have the chops to do really good innovation. Most of the real barriers to innovation are change-based and culture-based, meaning that until you can change quickly and successfully, you’ll have a difficult time innovating. And if you can’t innovate, you will perish.

What to do?

Most of us live and work in organizations that were ‘built to last” when what we need are agile, nimble, change-oriented, proactive cultures. If you want or need to innovate, focus on the factors of your culture that stymie change, that create FUD about new work or experiences, that reward reinforcing past behavior over taking risks and discovering something new.

Innovation success is based on corporate cultures that welcome and encourage change, insight, discovery, experimentation and speed. If your cultures aren’t aligned to these characteristics, you’ll need to focus on culture change in order to innovate continuously and successfully.

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Innovation is the Triumph of Hope over Experience

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GUEST POST from Jeffrey Phillips

Oscar Wilde, perhaps one of the most acerbic and humorous writers of the 19th century, once commented that a second marriage after a failed first marriage was the “triumph of hope over experience”. His point was that people continued to pursue marriage, even in the face of bitter previous failure. Now Wilde was a bachelor, and also unable to marry in his time, since he was gay, and may have had a bit of snark in his writings, but his point remains. People who do the same things over and over again, expecting different results, could be equated to Einstein’s theory that doing the same things over and over again and expecting different results is the definition of insanity.

Does this make innovators, especially committed corporate innovators, insane or simply like a cuckolded spouse seeking out a new relationship? What kind of person does it take to suffer the slings and arrows of outrageous misfortune and continue in their belief that innovation is good for their companies and good for customers? Sorry, I couldn’t resist another literary reference.

Not Insane, Not Defeated Just Committed

What I’d like to say about most corporate innovators who try and try again, in the face of overwhelming odds, little executive commitment, few resources and many cultural barriers is that they are doing important work. The handful who constantly attempt to conduct new innovation experiments, who explore and experiment to discover new technologies or needs, and bring new ideas to bear, aren’t crazy, they are rarely defeated and very committed.

You’ve heard by now that failure is required as a component of innovation. You’ve heard that in many TED talks and YouTube videos. You’ve heard it from your executive team. You know it’s probably true. It’s difficult to achieve perfection in the activities you undertake every day, using well-known tools and proven processes. How much more difficult will it be to succeed at generating new ideas for unknown customers solving currently unmet needs?

Hope and Experience

Here’s where good corporate innovators make a subtle shift. It’s not “hope over experience”, it is hope AND experience. That is, good innovation is based on previous experience, both with successful innovation and with failure. To return to Oscar Wilde, “experience is the name we give our mistakes”. Experience is the culmination of our successes and failures and the learning we achieved along the way. Good innovators are always optimistic – full of hope, and mix that hope with the experience they’ve gained along the way.

Most people who attempt to do innovation in almost any setting are neither hopeful nor experienced. Most expect that the innovation work will be pointless, and haven’t succeeded or failed at innovation previously, so they have little hope and no experience. We must change this by allowing people to try out small experiments – gaining experience – and by changing corporate culture and communications, to give people more confidence and more purpose, which will lead to more hope. Until people have more hope AND more experience, it’s difficult to sustain any innovation activity.Subscribe to Human-Centered Change & Innovation WeeklySign up here to get Human-Centered Change & Innovation Weekly delivered to your inbox every week.

Changing Corporate Culture to Encourage More Innovation

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GUEST POST from Jeffrey Phillips

I’ve written and spoken about the importance of corporate culture and its impact on innovation over the last 15 years or so. Heck, one of the underlying issues I address in my book Relentless Innovation (shameless plug) is the overwhelming challenge that corporate culture presents to an innovation team. I’ve argued that corporate culture, more than any other issue, is the biggest barrier to sustained innovation.

I’ve just found a great article on the subject of corporate culture, published recently in the Harvard Business Review. This is one of the best articles I’ve read recently about corporate culture, and while the article barely touches on innovation, the points it makes about corporate culture and employee motivation are important.

Links between culture and motivation

At the heart of the article is the question of what impact corporate culture has on employee motivation. I’ve always used a simple definition of corporate culture  – it’s how things get done in a company, regardless of the org structure or process maps. It’s the formal and informal decision making, corporate history and perspective, formal and informal rewards, recognition systems and what the entity encourages or discourages.

The authors of the paper draw a direct link between what people do, and what motivates them, and corporate culture. They go so far as to suggest six reasons why people work:  play, purpose, potential, emotional pressure, economic pressure, and inertia. The first three are positive forces that encourage people to do what they enjoy. The last three are negative forces that merely sustain day to day activity.

Where does innovation fit in?

If you think about how these factors influence innovation, it becomes obvious how much the positive aspects of why people work influence innovation. The first and most important aspect is “play”.  Michael Schrage wrote a book about innovation called Serious Play.  Innovation is a playful, explorative, experimentative activity at its best. If people feel called to innovate, and view it as a fun, exciting activity, they are far more likely to be fully engaged. In fact, if it is play, they are likely to enter what Csikszentmihalyi called ‘flow‘. Flow is the experience of doing something so challenging and engaging that you lose track of time.

The second factor the authors describe is purpose. Doing something that aligns to a key purpose is also very attractive and engaging. People who are interested in taking risks, creating new things, exploring new opportunities find their purpose in this work. People who don’t have this purpose or goal reject much of the work, which is why so much innovation feels so much like a repeat of existing processes or products. Helping people align to their internal goals or purpose might also sound like intrinsic motivation, and we know the best innovators are often intrinsically motivated.

Contrast intrinsic motivation with extrinsic motivation, which could align to economic pressure (a negative characteristic). Too much overt payment for innovation can lead to the wrong incentives.

Innovation effectiveness is based on your culture

If your business is focused on efficiency and effectiveness, consistency and a lack of risk taking and variability, then that’s what your culture reinforces. Imagine, then, trying to introduce a project or activity that has all of these aspects – variability, risk, uncertainty and so on. Is it any wonder that the culture reacts by first ignoring, then resisting, these activities?

How do we make our cultures more receptive to innovation? By accepting that innovation should be like “play”, that it should align to an individual’s purpose, and that it builds people’s potential. When innovation is risky or uncertain, or people are motivated purely by financial incentives, or worse simply can’t be bothered (the authors’ characteristic of inertia), then the culture wins.

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Why Context Matters in Successful Innovation

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GUEST POST from Jeffrey Phillips

I think we often over complicate the work of innovation, because we believe it cannot be simple and straightforward. After all, how can an activity that can disrupt an industry, create compelling new products or services and reap significant riches be simple? To drive all of this change, certainly innovation must be difficult and complex, right?

Consultants often benefit from this assumption that innovation is difficult or unusual. Unfortunately the presumption that it must be difficult also means that many people are afraid they don’t have the requisite skills.

Fear and doubt about innovation and the knowledge and skills it takes to do it well mean that far less innovation is attempted than probably should be.

In order to accelerate the pace of innovation and increase the amount of innovation that’s done, we need to simplify it, or at least remove some of the uncertainty. To do that I’m going to argue in this relatively short post that innovation has three important deliverables:

  • problem definition,
  • ideas and
  • solutions.

Between those deliverables are two very important activities that illuminate and contribute the the generation of those deliverables. Those two activities create context and content. While we focus on the deliverables it’s actually the content/context that really drives innovation value.  Let’s review the deliverables and the activities between them to understand what I mean.

Problems/Opportunities

The first real deliverable in any innovation activity should be defining and scoping an interesting problem or opportunity. To ask for innovation without defining a need or opportunity is useless – but to innovate based on a key insight, opportunity or problem is exceptionally valuable.  Your first goal is to find the right problems to solve, the right opportunities to address.  I don’t have enough pixels in this blog post to tell you how to do that, but have written about this previously.

Too many innovators and innovation teams start out without a good problem definition or opportunity, and this lack of scope dooms their work.

Ideas

Many people think an innovation activity begins with an idea, but they are wrong. An innovation activity begins with a problem or opportunity that you investigate, and learn more about, and discover needs, all of which is context, and the next deliverable is a set of viable ideas to solve the problem. Ideas are simply a waypoint in an innovation process or exercise. Unfortunately many people think they are the output.

And, even when innovation teams generate ideas, they often limit their thinking to small changes, incremental ideas, and a small handful of ideas rather than fully exploring the innovation opportunity.

Solutions

Innovation doesn’t begin or end with ideas. It ends with a valuable solution that customers can acquire and use, that makes their lives better or easier or more valuable. There really isn’t any innovation without this final value realization, so a valuable solution, well launched and well marketed, is the final deliverable of an innovation activity.

Now that we’ve identified the three deliverables of an innovation activity, let’s turn to the activities that shape and inform the deliverables: the context setting and content development that helps shape and inform ideas and solutions.

Trends and Needs:  Context/Content between problems and ideas

Once you have settled on a problem or opportunity to solve, you need to back up and gather context. What are the issues? What are the challenges?  Why does this problem or opportunity exist?  Who else is working on it? Do customers understand the need or opportunity? Is there value in solving it?  This context helps you shape the problem and begins to point at potential solutions (ideas).

We typically frame this in two activities:  trend spotting to understand the evolving nature of the world, the market, customers and technologies, and customer insight gathering, to understand the gaps and needs of customers and what they value. Without this insight, discovery and context you cannot generate meaningful ideas, and if you do manage to generate good ideas you won’t be able to describe to anyone why they matter. Too often innovators assume that they know what customers want or need, or simply believe their solutions and technologies are so valuable that they can address any needs or gaps.

Evaluation, Prototyping and Development: Context/Content between ideas and solutions

Once you have good ideas you must evaluate them against customer needs, corporate viability and competitive reality. Then you must determine how to produce them and launch them in a timely fashion. These activities too require investigation, discovery and context setting. In many cases if the ideas are very new or different, you may need to create new product or service development capabilities or develop new business models or channels. This may require new discovery and new experimentation – something your existing product development processes won’t value or understand.  You may simply need new context for new ideas to be realized as new products.

Where the real work lies

The real work of innovation lies in this context and content development, between a good problem statement, ideas and solutions. We often get far too caught up in these discrete deliverables, never realizing that the value lies in how well we understand the context and generate and evaluate the content between the deliverables. If you want to know – its in these content and context activities that the innovation magic happens.

We innovators place far too much emphasis on the deliverables of innovation, and on ideas in particular, when we should be focused on the generation and understanding of the context and content activities that must occur between the deliverables.

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3 Innovation Types: Evolution, Preventative, Creative

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GUEST POST from Jeffrey Phillips

We’ve positioned innovation incorrectly. Too often we position innovation as creating a new and valuable offering or solution, ready when customers are ready to demand new products and services. In other words, we’ve positioned innovation as something to do to prepare for future business, future needs and future demands. Yet, innovation does answer these issues – identifying needs and developing ideas for products and services for unmet and perhaps unanticipated needs.

In the hustle of day to day business, the main focus is on the now. What can you deliver today, this week, this month, this quarter? How can you help me achieve my quarterly revenue and income goals?

Sure, the future is nice, but I’ll worry about that when I get there. With this mentality, cost cutting, becoming more efficient, gradual but general improvement is the key focus, not innovation per se.

Making innovation more relevant right now

So the question becomes, how do you make innovation more relevant, right now, to executives and managers who are so focused on the short term? One approach would be to focus on the “short term”, what can innovation do for us to put better products on the shelves in less than 90 days. The general answer to that, given product development cycles, channel issues and customer awareness is: no much, except perhaps in the virtual world. Building, modifying and releasing a physical product is going to take more than 90 days, and 90 days is the magic timeframe. Anything we can do to impact revenue and cost within 90 days is good. The timeframe beyond 90 days seems almost imaginary.

Innovation, where practiced at all, becomes incremental because of this pressure to generate rapid results. Even if we can speed up innovation activities (we’ve run innovation programs from problem definition to fully developed prototypes in under a week) you’ve still got to go through the product development and launch cycle. This means innovation will be focused on items and attributes around the periphery – messaging, packaging, claims, rather than interesting or radical innovation of the product or solution.

Another approach is to use innovation to ferret out efficiency gaps. If we can’t create better products and services, can we use innovative thinking to shorten any barriers or gaps to bringing our products to market with less cost or with fewer inputs? This has been the management focus for years – right-sizing, outsourcing, automating. It doesn’t necessarily lead to new products but may lead to less expensive products or more rapid turns of incremental products.

So, while we can speed up the existing processes and use innovation to identify gaps or inefficiencies, or use innovation to make some changes to the periphery of the product or service, there’s not a lot of innovation that can be delivered and impact the bottom line in 90 days or less. So we need to think about innovation differently, or perhaps in different categories.

Categorizing innovation

There’s a real need for focus on process and peripheral innovation, as I’ve defined above, t. These innovations are meant to gradually improve the product or service, cut costs and deliver more bottom line value, and to do so quickly. The driving pressure for this innovation focus is cost reduction, time reduction and the desire to show customers something “new”, even if the newness is relatively minor.

There’s also a need for preventative innovation. I’ll call any work to blunt attacks by existing competitors or new entrants as preventative. This kind of innovation identifies potential openings and gaps in a product line, or new “in demand” features or benefits that you don’t currently offer. Preventative innovation considers a slightly longer time frame – perhaps 2 or 3 quarters – doesn’t necessarily create a new product as much as identify missing features or product line gaps and carefully evaluate what competitors and potential entrants are doing.

Then there’s radical or disruptive innovation, creating a completely new product or service, or disrupting an existing adjacent market. This kind of innovation takes focus and planning, commitment for quarters or even years, and full commitment over several planning and budgeting cycles. This kind of innovation ends up on the magazine covers and is what every CEO wants but can’t quite understand how to deliver given the demands for quarterly results.

Three horizons

The three categories I’ve defined above are exceptionally similar to the “three horizons” model that many innovation consultants talk about. But rather than call them “incremental”, “radical” and “disruptive” I think it makes more sense to describe them based on what they are: constant evolution, preventative and creative.

The first type of innovation is necessary (and is almost always underway) because your products and offerings can’t sit still. You must find ways to cut costs, make your delivery more efficient and tinker around the edges of existing products.

The second type of innovation is probably the least understood, because too many companies don’t understand what their competitors are doing, and are often shocked by the offerings of new entrants. Companies need to do a lot more preventative innovation, from a defensive point of view, to ward off new entrants and sustain or grow market share.

Everyone acknowledges the importance of creative innovation – that is, the creation of a completely new offering that radically changes the competitive landscape – but few truly know how to do it or are willing to commit the resources to do it.

Investment cycles

Here’s where every innovation consultant will lecture you about how much time and investment should be made in each of these three portfolio segments. You can think about the three horizons, or my evolution, preventative and creative phases, as components of an innovation portfolio and next ask: how much time, energy and investments should go into each one?

The general rule of thumb answer is 70:20:10. Seventy percent of your innovation effort should go into evolution, 20% into preventative and so on. But what if your budget for innovation is: zero? What if executives demand innovation but don’t provide budgets or funding or resources?

The inevitable fall back position is to conduct efficiency innovation (evolution) because that’s something your teams understand and can do relatively well now. And, of course, you’ll build and staff one high profile team to explore some really interesting innovation (creative) but they won’t have the commitment or funding to stick it out – it’s merely window dressing, because you expect to show some immediate results from the evolution innovation in the next few weeks and everyone will be satisfied.

Let’s change the language

Innovation champions and teams would do themselves a big favor by refocusing innovation language and talk about innovation in line with processes and outcomes. We can flavor our language with: evolutionary innovation to deliver short term benefits, preventative innovation to resist new entrants and sustain market share, creative innovation to win adjacent markets and customers.

Once we win the language battle and demonstrate we can deliver on evolution and preventative efforts, we can get the funds and resources to do truly creative innovation.

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Lego’s Innovation Lessons

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GUEST POST from Jeffrey Phillips

In television, an outlandish episode that seeks to introduce revive a series often signals the eventual downfall of the show. Those old enough to remember the TV series Happy Days will remember the episode when Fonzi jumped the shark on water skis. This gave us the expression that something had “jumped the shark”, an event signalling an inevitable downfall.

Today. I’m wondering if making a movie about toys is a signal that something has “jumped the shark”. In strange and disappointing news, Lego announced that it was facing dire sales projections, with growth slowing from over 25% per year to low single digits. Strange, when just a few years ago Lego was on top of the world, with great new toys, Lego kits, Lego Robots and the Lego movies.

While the management team blames internal complexity for the slowdown, those factors don’t necessarily contribute to slowing sales. Rather, I suspect that a company that had been on the brink of bankruptcy only a little over a decade ago discovered how to innovate in desperation, and began to neglect innovation as growth accelerated.

What we are seeing now is the aftermath of too little innovation and too much marketing.

What lessons can we learn?

Of course I should admit I’m doing this analysis from a distance, without complete information since Lego is a private company, but over the last few years Lego hasn’t done nearly the innovation or introduced nearly the range of products and services that it did from the mid 2000s until 2012 or so.  Lego management turned the company around in the mid to late 2000s, and growth accelerated, only slowing in the last year or so. The signals were out there, of course. A new CEO was hired and let go within only 8 months. What can we learn from Lego’s example?

Growth can lead to bureaucracy and risk avoidance

Lego may be challenged by its aggressive growth, and with that growth came size and complexity.  However, and complexity isn’t necessarily a factor in its innovation success, unless Lego allowed complacency and bureaucracy and risk avoidance to grow as sales grew.  Innovating at the brink of bankruptcy clarifies the mind (Steve Jobs would agree) and forces companies to focus on what’s really important.  Getting large and perhaps bureaucratic can mean that concerns grow about taking new risks.  Internal bureaucracy didn’t cause slow sales growth unless it blocked new innovative products or redirected investments.  Lego probably just lost some of its edge and taste for risk and innovation.

Only the paranoid survive

To me, one of the most important take aways should be, you simply cannot become complacent. Good innovations from just a few years ago will only sustain your growth and differentiation for so long. Customers are hungry for new solutions, rapacious in their research and unforgiving in their quest for new stuff.  In the past products and solutions had long shelf lives. You could create an interesting product and merely tweak it, adding a handful of new features every few years. Those days are over. Customers demand and expect new capabilities and features on a regular, recurring basis.

Companies need to gin up a consistent innovation program which aims for incremental and disruptive innovations to occur all the time.  Lego is just an extreme example of desperate but winning innovation to avoid bankruptcy followed by a period of less interesting or less successful innovations while harvesting the profits of the prior innovations. Lego and companies like this are particularly subject to this boom and bust cycle because of their target audience (children and teenagers primarily) who age out and don’t want the same toys their siblings or parents had. But while Lego is an extreme example, companies in every industry should take note. From the peaks of profitability and industry acclaim to laying off 8% of its workforce in a period of only a few years.

Explore the adjacencies

I had hopes for Lego when they built some of the early Lego robots, because (1) the robots were cool (2) the robots extended Lego’s audience into older kids, teens and even adults and (3) they were more expensive and had pull through.

But more importantly the robots were an exploration of an adjacent market or customer group. Good innovators must constantly evaluate the adjacent markets and customer segments and provide new capabilities, features and products that entice new customers. The apocryphal story is that Lego discovered lead users building robots with basic Legos and entered the market with their own product.  If that story is true, perhaps it’s time for Lego to go back to evaluating what users are doing with Legos and capitalizing on new adjacencies.

The quote from the Lego chairman that he wanted to simplify the business model in order to reach more children suggests that Lego isn’t reaching for new adjacencies, but doubling down on a fickle core market.

Grow up but don’t grow old

Lego’s problem mirrors Disney’s problem in a way. The business scales, but only so far. Both attract children and young adults, but have difficulty really capitalizing on the adult market. Disney has made forays into music and movies with some success, but they should be able to win more share and more business from adults. Both of these firms need to grow up (expand their customer base using their trusted names and capabilities) but not grow old (build sclerotic bureaucracies that resist innovation).

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You Lack Allocation and Purpose, Not Time to Innovate

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GUEST POST from Jeffrey Phillips

You don’t lack time to innovate, you lack allocation and purpose. There’s a big difference.

You’ll forgive me if I lapse into a bit of consultant speak – can’t help but do so since I’ve been in consulting for many years. One of the factors that dictates what people do as consultants (and in other jobs or industries where time is tracked to projects or other expense categories) is the availability of charge codes.

Everyone knows that lawyers, for example, typically bill their time in 15 minute increments. They need not only to bill their time in these time segments, but they also need a “charge code” – some mechanism to associate the time they just spent to a client, a business development activity or some overhead charge.

As consultants, most of us are no different. Regardless of how you ultimately bill the client (time and materials, fixed fee, gain-sharing or other mechanisms) almost every consultant and consulting firm I’m aware of tracks consulting time. I’m sure the same is true in many other industries where people are accountable for a time sheet at the end of a week or month.

Tracking Time

In a consulting firm, where you spend your time matters, especially if you are expected to generate revenues by billing clients. As a consultant one of your primary goals is to generate enough business to sustain your salary and overhead costs. A second goal is develop new and interesting value propositions or skills that can provide customers with new insights and create service differentiation for yourself or your company.  In the consulting business we call this “practice development”.  A third goal is business development, spending time to talk to new prospects and existing customers about new work. Finally, in every business there is some time that is simply “overhead” – filing, retrieving data, filling out time cards, doing stuff that drives the business forward but isn’t billable.

As an individual with a time sheet, you are constantly evaluating your time commitments:  how much time for this customer?  How much time and effort for that customer?  How much time in business development? How much time in practice development?  Time and how it is accounted for, becomes a major consideration in everything you do.

Cobbler’s Kids

Which is why even consulting firms need a charge code for innovation.  While we in the consulting industry are good at tracking and allocating time, we aren’t always good about spending time innovating our own products, services and business models.  And time allocation matters – if you have a goal of being 70% chargeable, that’s where your focus and emphasis will be.  Which means you’ll spend more time with customers and less on business development, practice development and lastly, of course, will be innovation.  This is why even consulting firms that lead innovation efforts are often like the Cobbler’s kids – they have the worst shoes.  Even those of us who talk to our customers about making time for innovation often fail to do it well.

If we, who track time so assiduously fail to define time and account for time spent on innovation, what must it be like for corporate practitioners who don’t account for their time or worst, don’t have specific time allocations?  As we know, innovation is very important but rarely urgent, so it frequently slips down the “to do” list until it becomes an utter necessity, at which point it becomes a “rush job”.  No time allocation, no fixed expectation of time spent in innovation and an acceptance of allowing innovation to fall to the bottom of priorities mean that very little time is spent building skills to become better at innovation, let alone actually doing innovation.

What If

But what if everyone in your company had to account for their time, and what if everyone had a specific time allocation for innovation? That might differ depending on the individual, their experience and interest in innovation of course, but what if at the end of each year you could look across your team and see how much time an individual spent building innovation skills and contributing to innovation projects. Wouldn’t that be valuable as a manager?

Wouldn’t the signal that people will be expected to spend time on innovation, and that time will be managed and accounted for, send signals about the importance of innovation and the expectations that innovation must deliver results?    All too often we hear that people within corporations don’t have time for innovation.  That’s because they believe they are 100% allocated to their “day jobs” and can’t afford distractions or time away.  What if managers and executives specifically allocated and measured time spent in innovation by individual, team and department, and set goals for each individual or group, and examined the outputs and outcome.  Do you think people would find time for innovation?  Do you think more innovation would get done?  Of course the answer to these questions is “yes”.

Innovation With a Purpose

But the final twist to this story isn’t just that people should spend significant time, but that they should be focused on significant opportunities.  It’s easy for people to commit 5% of their time to innovation and to generate really incremental ideas.  That outcome isn’t really all that better than what happens today.  Beyond simply allocating and evaluating time, management teams should include specific portfolio goals – 70% of your innovation time on incremental tasks, 30% on disruptive ideas, and then measure against those goals.  If every individual or team in your company spent 5% of their time on innovation (100 hours in a 2000 hour work year) and 30% of that time was focused on disruptive innovation (30 hours per individual per year), could we expect some really new and interesting ideas?  You bet we could.

What’s holding innovation back?  Time.  Time to think, time to explore, time to experiment.  And strangely, we aren’t time deficient.  Most people work a 9-5 job and spend inordinate amounts of time in meetings where very little gets decided or done.  If we could reclaim even a modest amount of that time and reallocate it to more important activities, and direct those innovation activities to more interesting outcomes, the innovation most companies could create would be incredible.

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Is Innovation Unreasonable?

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GUEST POST from Jeffrey Phillips

Thank goodness for Twitter. What would we do without this constantly refreshing stream of bromides, insights, accusations and occasional bursts of wisdom? Just yesterday while perusing the Twitter stream I saw a quote attributed to Apple’s Chief Design Officer Jonathan Ive that made me want to sit up and scream. The quote was relatively straightforward and seems innocuous on its face…

“To do something innovative means you reject reason.”

Sounds about right, doesn’t it?  Innovation means that you are creating something new and potentially disruptive, and that means that you may have to go against “reason”.  As I’ve said before, I’m a big fan of George Bernard Shaw, who said that all progress is due to unreasonable” men and women. But do we have to reject reason in order to innovate?  I don’t think so – in fact I think we have to embrace reason, knowledge and insight in order to innovate.

Reason or Convention

What I think gets confused here is the idea of fighting “convention” and somehow that becomes conflated with reason.  When we innovate we are often changing the status quo, and there are plenty of people with reasons to protect and sustain the status quo, who can give you plenty of..wait for it.. reasons why you shouldn’t disrupt or change the status quo.  Convention is powerful, and if the quote had said, “To do something innovative means you reject convention” I would have said: Amen.

However, we cannot reject reason when we innovate, in fact we must rely on insight, intelligence, research and reason when we innovate.  That’s because the only way to encourage people to commit to new ideas is to demonstrate new insights, new needs or new experiences, which are all based on research, insights into unsolved problems or challenges or new technologies. This all appeals to reason – why would I choose an uncertain unknown over a predictable certainty? Only if the unknown is promising, compelling and valuable.  And how would I communicate those benefits?  By appealing to your reason, and overcoming your fear of rejecting convention.

Innovators/Artists/Creatives

So, it might be rightly said that innovators, artists, creatives and others of a similar ilk are unconventional, even unreasonable in their pursuit of new ideas, but not that they lack or reject reason. Shaw suggests that only people who are willing to bend the world to their viewpoint, who don’t accept the status quo, create change and progress. Only those who use insight, research, intelligence and sometimes their gut see what’s coming and apply their reason to overcome conventions and objections to create a new reality.

I didn’t have the opportunity to work with Jobs – Jonathan Ive did – but I’d think Jobs was often unreasonable in his pursuits of innovation and rejected convention, but his insights called on his reason and his intellect. And Jobs was simply better at spotting emerging needs and markets than others were – this isn’t a rejection of reason, it is a validation of reason and a rejection of convention.

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What Accelerates Innovation?

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GUEST POST from Jeffrey Phillips

Lately I’ve been reading about the efforts to build or create innovation accelerators. Universities, businesses and even cities and regions are talking about innovation and the need to create accelerators or innovation enablers.

I’m glad that everyone is excited about innovation, and that they want to provide the means to help it flourish and help it move more quickly. But the thing is, like most late arrivals, they’ve got the wrong end of the stick as the Brits like to say.

Buildings, programs, artificial meet-ups and other activities that are being put into place as accelerators aren’t going to accelerate innovation. These solutions will accelerate interaction, perhaps, but not innovation.

To accelerate innovation, we need to do a couple of important things that are being overlooked or ignored:

First, describe an important or interesting problem or opportunity.  Most cities and businesses are overwhelmed by opportunities and problems, yet they spend little time adequately defining and describing these problems or opportunities so that innovators can place them in context and begin to imagine solutions.  Rather, we build buildings or create “accelerators” where people work on random ideas that have little importance to the people who built the accelerators.

Second, describe the benefit to the organization, business or community of an incremental change and/or a radical or disruptive change. What are the outcomes we seek?  Without a clear understanding of the potential end game, innovators and other participants will end up on one end of the spectrum or the other, either creating very marginally different ideas from the status quo, or seeking to overthrow everything and start afresh immediately. Neither of these is practical or valuable, especially at the start.

Third, give the innovators and entrepreneurs a stake in the outcome. This is especially true in business settings.  What rationale do innovators have to work on interesting or disruptive ideas if they have no stake in the outcome? We ask them to take risks through the innovation process for a small reward or some recognition if the idea succeeds, and the potential they might lose their job if the innovation fails. This is why there is far more innovation in startups and entrepreneurial companies and programs than large companies.

Fourth, encourage exploration and experimentation. Elon Musk can talk about hyperloops and tunnels under Los Angeles because he can afford to experiment and explore new ideas. We allow successful people and visionaries that freedom. We restrict that freedom from everyone else.  A good example is the difference in startup culture in Silicon Valley and the East Coast. In Silicon Valley the fact you’ve lived through a startup that crashed and burned makes you more credible.  In the East Coast it can make you a pariah when seeking new funding.

Fifth, consider who the judges are. Frequently when incubators, innovation accelerators or other programs or enablers are created, the “judges” of such activities are often the more established leaders in the community. These are the people who would scoff at Uber or AirBnB, who don’t understand texting or emojis, who are uncomfortable with ideas or solutions that upset the status quo.  So they reward and recognize small, incremental ideas that align to existing infrastructure and investments and ignore and fail to fund really interesting or radical ideas.

Finally, don’t worry about the money. If the innovators have any marketing or social media savvy, they’ll be able to publicize their ideas broadly and quickly with little cost. There’s enough money around that good ideas and good teams will attract funding, plus, working under tight constraints makes innovators face the real world and forces them to be more creative. Money will come into play when the idea or solution needs to scale. Only then will the idea need to move to where the money is – and that’s when a business or community will be forced to make decisions. Startups move to Silicon Valley because that’s where the funding is in the later rounds.  If you want to be a real regional player in the innovation and entrepreneurial world, create or foster a critical mass of venture capital, which can encourage startups to stay local. Then perhaps you can build a critical mass.

The focus on accelerating innovation is a good one, but in many cases the solutions are the wrong ones.

Buildings, programs, incentives are all helpful and may accelerate some portions of the innovation process, but the facts above: critical mass, evaluation and judgement, easy exploration and cultural acceptance, clear definitions of the problem or challenge and having a stake in the outcome are most important.

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A Lasting Competitive Advantage: Innovation + Creativity

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GUEST POST from Jeffrey Phillips

I wrote recently about my last trip to Dubai, and the impact it had on me. Dubai is unusual because it combines a number of factors – an energetic leadership, a country and region hungry for growth and transformation, a significant investment pool, and a real “can do” spirit. Clearly things are changing quickly there, and everywhere. During the conference where I spoke we had several other speakers who were futurists, including Matthew May. He and others talked about what they believe is about to unfold as we move ever more quickly into the future.

Pause to acknowledge Daniel Pink

I’d like to pause here and tip my hat to Daniel Pink, who wrote a really good book that is becoming ever more prescient.  Daniel Pink wrote a book entitled A Whole New Mind in 2005, and at the time the book had a nice reception. His key points in that book were that automation would increase, replacing repetitive labor.  Anything that can be reduced to an algorithm will be described, defined and encoded. If it can be automated, it will be automated. His further argument was that we needed to be focused on training people in skills that can’t be reduced to algorithms. Dan’s book, published in 2005, deserves a re-read at this time, 12 years later, because a lot that he talked about is happening. People are being replaced by algorithms, machines and artificial intelligence.

Where automation and AI are taking hold… 

McDonalds, that trusted first employer of many a teenager, is testing automation and robots to take orders, make food and complete orders. It’s possible within a few years that many McDonalds restaurants will be fully automated, finally achieving the original McDonalds brothers goal of speedy, efficient service. Check out the movie “The Founder” to see how choreographed the original McDonalds were, and think about how those patterns and repetitive activities can be reduced to automation, machines and AI.

While I was in Dubai I was speaking with an executive of a firm that reviewed intellectual property. 20 years ago the firm had hundreds of US lawyers on staff, but shifted these jobs to a large Indian location where hundreds of Indian engineers and lawyers reviewed intellectual property claims and patents. His belief was that within 5 years algorithms and machine learning would mean that he would not need many, if any, humans to review patents.

Wall Street is under attack as well from automation and machine learning.  Already there are stock funds managed almost exclusively by algorithms and machine learning, and a significant portion of stock trading is already done by software. Machines can recognize patterns and act far more quickly than humans can – so you can imagine that a significant amount of trading and money management will be automated in relatively short order.

What does that leave for humans?

As automation, artificial intelligence, machine learning and robotics grow in capability, humans doing simple, repetitive jobs will be crowded out.  Robots are much more expensive initially but don’t strike, don’t get sick and do things exactly the way they are programmed. They don’t get overtime. So what’s left for humans?  Perhaps this will be a golden age – where increasingly we are removed from the drudgery of manual labor and repetitive jobs and are finally freed up to explore the unlimited creativity that we possess but have never been able to fully harness.  There may be far more Faradays and Einsteins in our midst who can fully recognize their creative potential as we are freed from boring, mundane and repetitive tasks.

Pink suggested in his book that the “right brained” people would rule the future. This is because machines aren’t artistic or creative – yet. We humans still possess far more creativity and the ability to assimilate and create in ways that can’t be reduced to an algorithm. We must take advantage of these gifts and differences.

But that doesn’t mean that engineers, mathmeticians and scientists are doomed.  Someone will be needed to dream up the next AI, investigate black holes, explore space and perhaps discover how to travel at the speed of light.

What needs to change? Everything. 

All of these factors mean that our educational system needs to change, to reinforce creativity and expansive, divergent thinking. When we needed people on production lines who could do rote work, we taught in rote methods. Now and in the future we need a completely new way of thinking, that frees up and encourages creativity and innovation. But it’s not just elementary schools, high schools and colleges that must change.

Our traditional hierarchical top down management models, first organized around the military and the railroads, must change and morph as well. We don’t need to pigeonhole people into exceptionally narrow jobs, and we need to eliminate siloes and accelerate the best and most creative ideas to market as quickly as possible. I write this on a day when Ford Motor fired its CEO, even after record breaking sales, because the firm isn’t making enough money and its stock price is tanking.  Ford and the automotive manufacturers must shift their thinking from building cars to financing vehicles to providing transportation.

Will we leverage the power and performance of AI and machine learning and automation and robots to free people up to create even more incredible ideas and products – to add value where AI and robots can’t? Will we prepare our children to compete in a world where creativity and divergent thinking become more important than rote memorization? Can we rethink our business structures and processes to embrace more divergence and creativity?

Innovation and creativity are the lasting competitive advantage, for individuals, for cultures and for businesses. The sooner we realize that and act on it, the better off we all are.

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