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.

Innovation Magnetism

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GUEST POST from Jeffrey Phillips

Did you ever play with magnets when you were a kid? Wasn’t it interesting to discover how powerful small magnets were when you connected the negative pole of one magnet to the positive pole of another magnet? Or perhaps you had one of those toys that allowed you to manipulate iron shavings over the outline of a face, to create “beards” or a mustache using a magnetic wand to drag the shavings into place. These and other toys that rely on magnets work because of the force that magnets exert on other magnetic objects. Without the magnetic force, the shavings stay in place, held by inertia or gravity.

I can help returning to a constant theme I’ve developed over the years – the idea that inertia and complacence are two of the biggest impediments to innovation. Any sentient being wants to avoid change, uncertainty, and new or additional work. Face it, the vast majority of us like doing the same things, building the same things, meeting the same people. We all live in a fairly regular, routine rut that we call life. There’s nothing wrong with that, except that nothing ever changes in those routines. Most of us don’t seek out change within our routines either. When we seek novelty we seek it in other places, doing other things. Our home and job are for routine, our vacations and travels are for novelty and experimentation.

Yet we can see that innovation requires a force to act on an individual or population in order to lift them from the everyday rut and retain their focus on the new opportunity or new need. This is true at the start of an innovation activity, when we need to create enough energy and enthusiasm that we spark the small flame of novelty and creativity that all of us nurture deep inside. Yes, admit it, you do have natural curiosity and the desire to do something new and different. It’s just been held deep in abeyance at work because trying to do something new and radical may be a career-limiting move. So you wait, and do your work in the “business as usual” environment as the flame of creativity and newness slowly flickers and dies. What will it take to increase the flame or re-ignite it after years of neglect?

Further, if an innovation opportunity or project can re-ignite the flame and draw your attention away from “business as usual”, what will retain that passion and attention over the life of an innovation project or the creation of a new product or service? Simply capturing your attention for a brief moment is one thing – retaining and sustaining your attention over the life of an innovation project is quite another. So many other factors will arise to impede your work. So many demands from your everyday job. So many barriers or hurdles to overcome to do new work. In fact it’s relatively amazing that innovation gets done at all, considering all the barriers, hurdles and “reasonable” work that must get done in any company.

You need a magnet

In the past I’ve written about a “burning platform” to attract attention and cause action. In an innovation setting a burning platform is an opportunity too big to ignore, or a threat too imminent that you can’t afford not to respond to. A burning platform provides energy or passion to engage in an innovation project. It causes executives to agree to support and fund innovation, and creates enough light and heat to convince people to engage. But anything burning can also easily burn out. Far too often we find that burning platforms are quickly replaced by another burning platform, which draws attention and firefighters to another problem long before the first one was extinguished. We need something more than a burning platform. We need innovation magnets.

The difference between the analogies for burning and magnets is that something on fire will eventually be extinguished, it will burn out or it will be judged not important to address. A magnet creates a powerful attractive or repellant force and it sustains that same force over the lifetime of the magnet. As long as the magnet retains its magnetism, it exerts the same force. That’s what we need for innovation to succeed in any organization – an initially powerful force to attract the right people to the right ideas, and an equally powerful force that remains powerful and attractive over time to keep people focused, even when other forces come into play.

Who or what are your magnets?

Now, in the physical world magnets are pieces of metal that have been charged with a current to create a magnetic field. In the workday world of your company, you need to find the “magnets” that will attract and retain your team’s attention and passion.  Magnets in this sense are first important needs, opportunities or challenges that your firm MUST address. This provides the first attractive force. But you must do more than an initial attraction, because other forces will inevitably work on the teams that were initially attracted to the challenge. Your magnets must have staying power.

Your potential magnets are people with deep passion, executives with deep commitment, leaders and managers who “get it” and understand the longer term trade-offs between “business as usual” and innovation. Identifying, empowering and sustaining your magnets is probably the most important thing you can do to sustain innovation, and do what everyone talks about – building a “culture” of innovation. Until you have people who are magnets, attracting other people, other ideas and a level of commitment that sustains over time, you don’t have a culture of innovation, you have a burst of innovation that simply can’t sustain, and is more likely to crash and burn than to create anything of value.

Do you have magnets? Do you have people who are fully energized by innovation, who have enough hierarchical authority or simple moral imperative to create the reasons to innovation and attract the right people and ideas? Can they sustain that attraction, not just in the eager initial phases of an innovation project but during the long slog to a new product or service when the siren calls of their regular job start exerting new forces to draw them away? How strong is your attractive force for innovation, versus the attractive force of the everyday job? If you want innovation, you need some magnets – people, causes, cultures that draw the right people and keep their attention. It’s not a sprint, it’s a marathon, and you need to attract the right people, and retain them with attractive force that’s more powerful than the hurdles or barriers they’ll face along the way.

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Powerful Innovation Relies on Weak Signals & Forces

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GUEST POST from Jeffrey Phillips

For a long time I’ve wondered if we don’t pay far too much attention to the obvious aspects of innovation – brainstorming, ideas, trends, etc – and pay far too little attention to the connective activities and culture that moves ideas through an integrated workflow. It’s easy to focus on and celebrate activities and definitive results. A team can hold a brainstorming session and measure the number of ideas, for example. These events are often what we talk about, even celebrate, when we talk about innovation but they aren’t the most critical components for innovation. It’s more difficult to build the connective tissue between these activities and deliverables and the next activity or action. When we celebrate the visible, discrete activities like idea generation, we place emphasis on that activity and raise the consciousness of the culture to embrace ideas and tangible outcomes. When we fail to focus on the culture, processes and connective tissue that sustains an idea or an innovation process, we denigrate the components that are ultimately just as valuable, and frequently harder to develop.

Strong and Weak forces

I’d like to use a model of the atom as an analogy for the importance of components and connectivity. The concept of the atom is relatively well-known to many people. I think we often picture it in much the same way that we think of the solar system – a central core made up of protons and neutrons, circled in progressive orbits by electrons. This has been the central theory of the atom for years, and even elementary school children can tell you what a proton is, and its purpose and charge, or what the electrons do. What they often don’t know, and don’t recognize or celebrate, is the important and often misunderstood forces that keep the components bound together. After all, if the forces that hold protons and neutrons together in the center of the atom, and the forces that retain electrons in their shells didn’t work, atoms wouldn’t form, and without atoms, no larger building block of life would exist.

You see, we celebrate the understandable, tangible forms of the atom – the proton, neutron and electron – but we don’t understand what may be more important: the forces that bind them together and connect them in ways that sustain them and make them useful.

There are four fundamental forces at work in nature:  gravity, electomagnetism, the strong force and the weak force, and at least two of them are vital for the structure of the atom. It’s the strong force that binds protons and neutrons together, a force that is far stronger than gravity. Fortunately the force acts over a very small distance, otherwise it would collapse everything to the center of the atom. Similarly the electrons are bound to the nucleus by electromagnetism and their various valence shells. These forces are less powerful than the forces that bind the neutrons and protons together, but equally as important. The ability to gain or lose electrons means that atoms can combine to create new complex compounds, sodium can combine with chlorine to make salt. Both the strong interactive force and the electromagnetic force are vital to the structure, function and composition of the atom, but are less understood and less celebrated than the tangible components. The same is true for innovation. Good connections, strong connective tissue, a defined innovation process or workflow is more important than any specific step or output.

Celebrate and emphasize the weak forces

When we innovate, everyone wants to know when we’ll generate ideas, because that is a fun, but also tangible activity that leads to measurable outcomes. What few people want to focus on is the connectivity and process, the “weak forces” that bind the innovation process together. Many, many times you’ll see teams reach a peak “high” generating ideas and rapidly dissipate when they don’t know what to do next, or even how to define what to do next. It’s these weak forces, connective tissue, underlying processes, workflows or next steps that matter, as much, if not in many cases, more than the celebrated activities. Just as a proton is relatively useless without its neutrons and electrons, held together by the binding forces, so too are ideas relatively useless without the defined connective forces and processes to accelerate them toward commercialization.

What’s an even greater issue, however, is how much resistance these innovation “weak forces” confront. They face resistance from “business as usual” processes and structures, from people uncomfortable with risk and uncertainty, from decision making metrics and frameworks that aren’t suitable for use in innovation (like ROI) and many other competing factors. Cultures that sustain innovation over long periods of time have strong connective forces that bind activities and processes together and overcome resistance, while most firms lack the connective tissue or fail to constantly strengthen the connective tissues and processes. The common refrain from many executives is that they have plenty of ideas. That’s often correct, but they fail to realize that it’s not an issue of the number of ideas, but an issue of how those ideas get translated from a nascent idea into a viable product or service. That work is done primarily through these weak forces and defined processes.

Weak Signals

Another factor that good innovators understand is the value of “weak” signals.  Innovation is based on gathering and understanding trends and weak signals that indicate emerging needs or emerging markets. These weak signals are often overlooked or ignored by firms that will only listen to a “sure thing”. Innovators understand that once a signal is predictable and validated, everyone else has registered the signal and begun to decrypt it. Good innovators gather weak signals and attempt to understand what those weak signals may be telling them, and they act on the messages within those weak signals. It’s often too late to respond to clean, clear signals, but almost never too early to start gathering and interpreting weak signals.

Good innovation is based on understanding what the “weak” signals – messages that other firms are ignoring or overlooking – are telling you about future market needs, and constructing enough connective tissue or “weak forces” that will manage the space between innovation activities and deliverables to create an innovation workflow that allows to you accelerate ideas from nascent, vague ideas into polished products and services. There is great strength in these “weak” concepts, and while they are rarely celebrated they do the hard work of good innovation.

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If You Give an Innovator an Idea, He'll Want to Launch It

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GUEST POST from Jeffrey Phillips

When my kids were little, we used to read bedtime stories. We had a number of favorites. The classics of course were always in demand – books like Goodnight Moon were perennial favorites. Another set of books that has really stuck with me were also favorites, and they’ve been in my mind lately because they illustrate issues with innovation so well that are so often overlooked.

You may be familiar with the book If you give a mouse a cookie, or perhaps If you give a moose a muffin. These books open with farcical but funny conundrums. For example, if a mouse were to show up in your kitchen and ask for a cookie, you might be inclined to give him one. That’s just kindness. However, that act of kindness will lead to unexpected consequences. Because, as the book points out, if you give a mouse a cookie, he’ll want a glass of milk to wash it down. And, being the kind individual you are, once you give the mouse a glass of milk and he finishes it, he may want to check his appearance in the mirror to ensure he doesn’t have a milk mustache. But when he views his visage in the mirror, he decides he needs to trim his mustache, and so on. The book is filled with these If, Then statements that lead on to more or less logical next actions.

How does this illustrate something about innovation?

From my experience, it seems that everyone thinks about innovation, but they think about it in very discrete, disconnected ways. R&D folks think about innovation as creating a new polymer. Marketing folks think about innovation as changing a marketing channel or delivering a new product. Finance folks think about innovation as driving new revenue or perhaps modifying a business model. What very few people think about are the knock-on effects, consequences and series of events that are required to unfold when you innovate.

For example, if your management instructs you to innovate, you are going to want some scope, instruction and definition of goals or outcomes. Lacking those you’ll create your own, or wait for someone to provide them. Once you have defined the goals or scope or had them offered to you, you’ll want to ensure your skills are adequate to the effort. You’ll acquire skills or hire them, or attempt innovation with the skills you have. If you generate ideas, you’ll want to know how to evaluate them. You’ll seek input on what matters, how to evaluate and measure ideas and what ideas matter most. Once you have good ideas that you are happy with you’ll want to know how to commercialize them. That means getting the best ideas in front of people who can make decisions about product development, prioritization and funding. If you can’t get your ideas in front of these people with a really compelling argument, all your previous work is for naught. Even if you can get your ideas in front of these people with a compelling argument, it won’t matter unless there are available resources to implement the ideas. And even if there are available resources all the capabilities or technologies may not reside internally, so you’ll need help to find and acquire the intellectual property or technologies and bring them in house.

It’s all interconnected

Like my relatives in the small rural community where I grew up, all the aspects of innovation are related. Some of the relationships are strong and evident – to get new products I need new ideas. Some of the relationships and interconnections are less obvious – to get new ideas I need to do good research to understand customer needs. Some of the obvious relationships and actions aren’t comfortable conversations – to move new ideas into production, something else has to be removed from production, or we need more production capabilities or assets.

The real problem is that the individual acts are all easy to define, and somewhat easy to conduct. The “magic” in the innovation process is defining and understanding all the strong and weak interactions, dependencies and decisions and building a – wait for it, here comes the MBA consulting word – holistic innovation approach that recognizes and understands all of the interrelationships, consequences and dependencies. If I build the best idea generation facility in the world in a large corporation but neglect to consider and rework the means of getting ideas into a product or service development process then all I create is cynicism. But idea generation tools and techniques are easy, and rethinking priorities and product portfolios and rejiggering priorities for existing products and services to make way for new product development is risky and difficult.

The hip bone is connected to the thigh bone

This isn’t really a mystery – everyone knows how interconnected and tightly woven an efficient, effective organization is. What most managers and executives recoil from is the work necessary to unwind 20 years of ever-increasing efficiency and capability to make room and recognize the consequences of incorporating more innovation into these processes. Introducing innovation tools like brainstorming or idea management software solutions is easy. Incorporating them into end to end processes that recognize the knock-on effects, decisions and consequences is difficult, time consuming and introduces a tremendous amount of risk. In the old song about the skeletal system we learn that bones are connected to other bones, but sometimes we forget that it is muscle that holds the bones together in the joints. Skeletons hold together through tension created by tendons and muscles that make up the joints. In a similar way we need more muscle and better design around innovation process, so that good ideas have a workflow that makes sense and considers the knock-on effects and consequences. We can’t simply string the right bones in the right sequence and expect a skeleton to stand without the muscles that link the bones together, anymore than we can introduce a lot of innovation tools or techniques and neglect to link them together to lead to logical outcomes.

Building a competency versus introducing tools

If you want to sustain innovation, you need to build a competency for it, and perhaps the most significant part of that competency is a well-considered, integrated, fully thought out workflow that describes how ideas are defined, created, evaluated and converted into products and services, and that considers all of the consequences, changes in prioritization and resource allocation. Without that you have a set of tools that while powerful individually will consistently fail to deliver results.

Too many firms introduce interesting, powerful innovation tools but fail to create the linkages between the tools, and the bridges between innovation phases and product development phases. These bridges, and more importantly the consequences of the decisions within those bridges, are perhaps the most difficult component of innovation. That’s because it is in these bridges that real trade-offs and resource allocations are made.

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You Are What You Innovate

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GUEST POST from Jeffrey Phillips

In many philosophical circles, the mantra behind much of the belief system is that you are what you (think, eat, do, believe). In dietary circles, you are what you eat. Is it also the case that you “are what you innovate” or is it often the other way round?  I think in many cases we actually “innovate what we already are”.

The reason that most people aren’t what they innovate is that it would require change in two dimensions. To be what I innovate requires me first to be open to change from my current state. Far too many of us as individuals and corporations are comfortable with our current states. Note I didn’t say fully satisfied, because most people and corporations aren’t fully satisfied with their current states. We all simply feel that the risks inherent in change and the uncertain outcomes aren’t yet worth the work of creating change. So first I must be willing to change.

Second, I must be willing to innovate, and innovate in areas or markets or solutions that are new and perhaps unfamiliar to me. If I innovate only within the context I know and understand, I don’t change. I merely reinforce my knowledge and expertise in a specific area, and become an “expert” in that space. Over time the potential space within which to work becomes very limited, and I build on an increasingly narrow base, easily disrupted as my expertise loses out to other emerging ideas. Yet this description of constantly innovating in an exceptionally narrow base describes many innovators, and describes why we innovate what we are.

We innovate what we already are because we understand what we are. We understand the scope and risks. We understand the likely outcomes. When we innovate what we already are we lower the risk of failure, and often unintentionally limit the possibility of success. If you’ve heard the saying that when you have a hammer, all problems look like nails, then the same principle applies. When we focus innovation only on what we know and what we already are, we can’t help but be disappointed when the innovation results look very similar to what we already know and do. We are constantly optimizing the hammer, looking for more and more specific nails, rather than asking the question: is there another way to affix this to the wall? But merely asking that question means we must embrace difference and change.

Far too frequently, many firms will “innovate” but they limit their innovation to what they already know. The scope for innovation is exceptionally narrow, and over time it becomes ever more narrow. This creates expertise, which is a good thing, but limits the breadth and depth of knowledge and experience, and draws the scope for the next innovation even tighter. So, to a great extent, many firms innovate what they are, rather than are what they innovate.

For example, we worked with a firm in the life insurance business, which you may know is highly competitive and highly commoditized. They were seeking to innovate life insurance products, but we wanted them to think more broadly about innovation beyond the product. For example, they had decades of information about their customers. Couldn’t they leverage that information to provide new sources of insight to other businesses? But we were told they weren’t a data company, they were an insurance company. They weren’t ready to let go of expertise, history and existing business models to innovate to a new position.

In the long run, many businesses are what they innovate, to the point that they can’t innovate any further without a significant shift in focus, market, business model or solution. But are they willing to innovate what they are?

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The Critical Missing Component for Innovation Success is…

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GUEST POST from Jeffrey Phillips

I love detective novels. It doesn’t matter the setting or protagonist. I’ve enjoyed Ian Rankin’s Inspector Rebus, set in Edinburgh and Gary Disher’s novels about Hal Challis in Australia. I’ve just finished three books by Camilleri, who features Detective Montalbano in Sicily. The setting can be a significant contributor to the story, or just a backdrop. The detective can be a fine upstanding individual or an idiot savant, who rubs his colleagues the wrong way but solves crime. Good detective fiction is the same where ever it is set, whoever is the detective. The best stories present a lot of clues during the novel, and force you to put the pieces together. Often, at the end a critical clue or insight springs from nowhere to confirm a suspicion or cast doubt on a course of investigation.

Police dramas often focus on three key aspects of a crime: means, motive and opportunity. That is, did a person have the “means” to commit the crime, were they driven by a specific motive, and did they have the opportunity to commit the crime. If all of these things are true about an individual, then there’s a good chance you’ve found your killer. If one or more of these are missing or can’t be discovered, the chances of solving a crime are bleak. These are some of the “critical” components to solving a crime.  Similarly, innovation has some “critical” components that in our experience are often incomplete, if not completely absent.

As innovators, we should be detectives, asking ourselves, what critical components for innovation success does this client lack?

I’ve listed a few critical components for innovation success below. If you are starting an innovation project, make sure they exist and are fully supported. If you’ve “failed” at an innovation activity, perhaps this is a good “post mortem” to find out what went wrong.

Vision

Sorry, but when you ask people to innovate, they need to understand where the firm is trying to go. Should innovation serve to drive more of the same – pursue the same customers and markets? Are we trying to extend our value proposition in existing markets, segments and products? Are we trying to enter new markets, industries, geographies or segments?

People laugh at the “vision” thing. Vision and mission are often overwrought and useless, because executives state them once at a corporate meeting and then let the business go back to whatever it was doing previously. Most corporations have strategies and visions that are frequently communicated and never understood two levels down below the CEO. Unless and until you can create a purposeful, meaningful vision that you can communicate to innovators, you can’t innovate successfully.

Opportunity

What’s the business opportunity or problem that if addressed drives new revenue and growth and fulfills the vision? Can you collapse that to a statement? If your vision is to grow your business into new channels or markets, can you create a two or three sentence description of the opportunity and how you’ll measure the results? The vision gives you DIRECTION, the opportunity provides SCOPE. You can’t innovate without a “vision” or strategy, but that’s not enough.  You need to provide “scope” in terms of a specific opportunity or need or challenge.

Discovery/Insights/Learning

Are you willing to do what it takes to discover needs and to learn about new markets or segments? Do you have the humility and patience to learn about unmet needs, to discover and validate stuff that you don’t know? Or will you simply wade into a new market and offer your same set of services and products, confident that you know more about what customers need than they do?

In hindsight many innovators will admit that they skipped this component. Instead of gathering insights they asserted that they knew what people needed. Or, they did perform some discovery work, mainly box checking, seeking insights that confirmed what they believed. Only innovators who are eager enough, curious enough, humble enough to learn something new really succeed.

People

Efficiency is easy, innovation is hard. Therefore, you need your best, most passionate people working not on the day to day efficiency stuff, but on the things that are difficult and critical to driving growth. Where are your best people focused today?  What skills and knowledge do they have, and what do they lack? Are they even willing to take the “risks” that innovation presents? Do you have any ability to identify the people in your organization who have good innovation skills?

If you “can’t afford” to place your best people on an innovation activity, or if you can’t afford to give them the time and skills they need to succeed, don’t start.

Processes/Tools/Methods

Innovation is not a secret science, a black art or a magic formula. It consists of good problem definition, divergent/convergent thinking, discovery of needs, understanding future trends, generating good solutions in context of the discovery, rapid prototyping and feedback loops, and building new solutions that you can deliver to the market. There are a number of methodologies, processes and tools that support and sustain this process. Do you know them? More importantly, does anyone in your organization know how to use them effectively, and in the right combinations?

The most critical missing piece in this list is…whichever one is missing. All of these matter, and they all are interconnected. You can’t double down with great people and hope to achieve good innovation if they don’t understand the vision or opportunity, or lack discovery or tools. The best advice I can give, and frequently give our clients, is to slow down innovation projects to assess which components exist and, if they exist, their capabilities and commitments.

Paul Hobcraft and I created the Executive Workmat as an assessment for this reason. OVO offers Executive Workmat assessments as a service to our clients and prospects, so that you can understand and shore up gaps or missing components before you start innovating, rather than discovering the gap and trying to fix it during a critical innovation activity.

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Who Blocks Innovation?

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GUEST POST from Jeffrey Phillips

As an innovation consultant whose company works with a lot of large corporations, the psychic dissonance associated with innovation can be quite challenging. By that I mean there’s a lot of demand for innovation, but not a lot of passion. A recognition that a lot of innovation is needed, but few resources and many time constraints. A real desire to create new things, and do things differently, but little cultural permission. We’ve overcome the awareness issue associated with innovation. Everyone believes that we need to do more. We are now staring at the commitment and inertia barriers, where it’s finally time to “do” something. And the problem is, at every level in the organization, someone wants to innovate, but an individual one level up doesn’t seem bought in.

Let’s take this from the bottom, shall we?

Average Employee

Your average employee is hard at work at a milling machine or processing requests for accounts payable or communicating the value of your products to customers. Every day they see opportunities for new products, services and business models. They recognize the opportunity for small, incremental innovation to existing products and have the capacity to imagine completely new and disruptive innovations. Yet they go about their merry way, doing what they are “supposed” to do, because that’s how they are evaluated and measured, and that’s what their managers expect them to do and hold them accountable to do. While there are lots of ideas in these teams, the individuals themselves feel obligated to keep doing what I call “business as usual” because if they don’t, we won’t achieve the quarter.

These employees feel that their ideas and insights are valuable, but can’t or won’t ask for permission to pursue them. They believe that their management will reject new ideas and ask them to recommit to the business as usual processes and existing products. If you ask these people why there isn’t more innovation, the answer they’ll give is: no time and no management interest. My “manager” won’t let me innovate.

Average Middle Manager

Your average middle manager has a thankless job, stuck between the executives who make promises to Wall Street and then expect the managers and employees to make the numbers happen. Middle managers are experts at making more from less, and they are the driving force behind “business as usual”.

Middle managers know they are on a treadmill, and the treadmill is running out of tread. Products are getting old in the tooth, and fewer and fewer products are replacing those tired products. Increasingly, they achieve their numbers by cost cutting or pulling in sales from future quarters.

When asked why there isn’t more innovation, these managers will answer: no room for risk, no deviance from the quarter, no available headcount. They believe they are risk and resource constrained, and that while executives expound innovation, it’s all flavor of the day stuff, here today, gone tomorrow for the benefit of the market. My executive won’t allow me to innovate.

Average Executive

Your average executive, circa 2014, came to his or her role through efficiency and cost cutting. They cut their teeth on outsourcing and right sizing, and while they never really understood Lean and Six Sigma, those solutions freed up cash flow, so the executives embraced them. These executives aren’t stupid, however. They see and hear a lot about what other leading innovators are doing, and see the premiums that “innovators” command in the marketplace. They want new products that drive differentiation and growth. They want this desperately, but they also don’t want to disrupt the organization or miss a quarter. So they ask for innovation, hoping someone below will rise to the challenge, while counting on making the quarter in a tightly resource constrained organization.

If you ask these executives why there isn’t more innovation, they’ll respond: lack of skills and resources. They believe the opportunities exist, and that properly led they have the people who can generate ideas and create products and services. They don’t believe their teams have the skills necessary, and also recognize resource constraints and the risk involved. They believe that their shareholders won’t allow them to innovate, because it puts short-term profitability at risk.

Average Shareholder

I put shareholders at the top, because, after all, we shareholders have great sway in what businesses do. Shareholders want to invest in firms that generate profits, and have long term growth potential, which should cause stock prices to rise. We don’t want to bet on dinosaurs or firms that can’t grow and can’t command increasing margins. We are also consumers and want top notch products and new, compelling offerings. And, we are fickle. We can invest in any market, and buy products from any supplier who meets our needs.

Do we demand profits or innovation? We demand both. As consumers we want the best new products. As investors we want profitability and growth. Interestingly, doing the former well will often drive the latter.

Who stands in the way of innovation?

Ultimately, there’s really no one standing in the way of innovation. Consumers and shareholders want it, and are often willing to give firms the benefit of the doubt if they are really investing in innovation. Executives want innovation but must be convinced that their organizations can deliver, build skills and create a successful innovation capacity. Middle managers want to innovate because they are fed up with the drudgery and being stuck between intemperate demands for innovation from on high that arrive with no resources, and requests to innovate from employees but no availability to introduce more risk or uncertainty. Employees at the ground floor want to innovate because they witness customer needs that go unfulfilled.

When we really look closely at “who” blocks innovation, we catch a glimpse of an imagined figure at the corner of our eye, but when we really confront who blocks innovation we see that the figure we imagined is actually made up of all of us, who don’t have quite the passion or commitment to take the risk. Everyone is responsible for blocking innovation, and no one is responsible, and there lies the problem. Can you image anyone saying that they “don’t want” innovation? That doesn’t make much sense.

Of course this recalls the old story:

There was an important job to be done and Everybody was sure
Somebody would do it.
Anybody could have done it but Nobody did it.
Somebody got angry with that because it was Everybody’s job.
Everybody thought Anybody could do it but Nobody realized that
Everybody wouldn’t do it.
It ended that Everybody blamed Somebody when Nobody did what
Anybody could have done.

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The Problems Measuring Innovation

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GUEST POST from Jeffrey Phillips

There are tasks we want to do that are reasonable to do and are practical to do. There are activities we want to do that are sensible but difficult to accomplish.

Measuring innovation, which sounds important and reasonable, often falls in the second category. It sounds reasonable and important to measure innovation, but is often very difficult to do well. Sort of like measuring sand with a ruler, we may have the wrong tools, or the tools may not exist, or, quite possibly, there are some things we simply don’t know how to measure. As Einstein said, not every thing that counts is countable, and not everything that can be counted counts. Let’s look at some of the challenges in measuring innovation…

The tools we have

Let’s start with our trusted and familiar measurement tools. For most projects, we measure factors like cost, time to completion, the results created by implementation (dollars saved, profits created) and measure against the cost to develop, which gives us the almighty ROI. The tools we use to measure activities and projects are tuned to the projects and activities we do regularly and that we deeply understand. However, those measurement tools are often confounded by innovation.

Note that we anticipate being able to measure factors like time to completion. In an innovation setting, where divergence is as important as convergence, it’s difficult to say how long it will take to create a viable new idea, or when that idea will be fully vetted. With little history, it’s difficult to establish parameters about “typical” innovation projects.

Further, we’ve become so enamored with measuring efficiency, productivity and profitability that we neglect to measure things we can impact, like customer engagement and delight, so we tend to ignore or discount innovation that may not be able to deliver immediate profitability, even when those innovations could be valued by consumers. We simply don’t have the tools or understanding to measure or to understand how valuable those solutions are. Like the proverbial drunk looking for his keys under the light post, we limit our investigation only to where we have the best understanding – where the light is best.

The difficulty in measuring innovation

There are several difficulties when measuring innovation. The first is in the definition of innovation. After all, innovation is a relatively generic umbrella term that contains a lot of different activities and outcomes. Incremental product innovation is more definable and predictable than disruptive business model innovation, more familiar and probably easier to measure. Given the range of activities, processes, definitions and outcomes, talking about measuring innovation is a bit difficult, especially when the range of outcomes is so broad.

Second, we lack consistent models and frameworks. Most organizations don’t have a deep history with innovation and can’t compare projects to previous exercises. There are few “knowns” and many unknowns, and many of those unknowns are unfamiliar or unknown. Without existing rules of thumb or easy comparisons, it’s hard to say if innovation is “on track” or “off track”, and in the absence of innovation examples we tend to evaluate innovation in comparison with other familiar projects that are well-defined and well-understood. In that light innovation often looks haphazard and unlikely to return any value.

Finally, most businesses are so focused on ROI – return on investment – and getting a “fast” ROI that true innovation is difficult. Increasingly good innovation looks more like a reckless gamble. The odds aren’t great for a big return, but when the idea is right the returns are enormous. Most would rather follow a safe, predictable model, limiting risk and uncertainty. Therefore, they aren’t really measuring innovation at all, but simply measuring predictable projects.

Measurements in Innovation Phases

Rather than a one size fits all, some measures and milestones need to apply to innovation phases. For example:

1. Can we identify and scope an interesting unmet need or problem that customers have? If we solve that problem do we shift significant business our way?

2. In the “discovery” phase of innovation – customer insights and trend investigation – are we learning about new needs?  Do we believe we have the “lead” in understanding those needs?

3. In the idea generation phase – are we generating interesting, valuable ideas that could disrupt a market or set a new standard for solutions or services?

4. In the validation phase – do customers indicate that our ideas solve important, relevant needs and that their satisfaction with the existing solutions is very low?

I could go on, but I’ll stop there. Note that as with many other facets of innovation, much of the measurements in the “front end” are qualitative rather than quantitative. I can certainly measure the number of ideas generated – quantitative – but what really matters is the insight and value of ideas – qualitative. This is another reason so many organizations struggle to measure innovation. Not everything that counts is countable. Sometimes a wise assessment is far more important than an accurate counting.

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Innovation the Tom Sawyer Way

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GUEST POST from Jeffrey Phillips

Over the last few years I’ve noticed a continuing discussion in many organizations about the origin of ideas. Should the ideas they commercialize originate from inside the organization, outside the organization or both. So far few executives have cast their vote for “neither”. Increasingly, firms that have focused on internal innovation have begun to rely more heavily on external ideas and technologies. Many firms that have traditionally relied on internal innovation are noticing that there are far more ideas and technologies outside their walls than inside, and far more entrepreneurs and small companies who are willing to experiment with new solutions and technologies than the larger firms can. Finally, smaller firms often have more rapid processes and response times, and are able to try out several iterations in less time with less cost than larger firms.

It would appear, in many cases, that “outsourcing” innovation would be a smart move, if a larger firm were able to signal its needs, influence external research and innovation, and constantly review the work that is being done, so as to snatch up good ideas and technologies before other firms could understand the value of an entrepreneur’s concepts. Being of a literary frame of mind, I pondered this approach and realized that one of our most famous literary characters had done this in literature. His name was Tom Sawyer, the famous character created by Mark Twain. Here’s a slightly tongue-in-cheek approach to low risk, low cost open innovation.

First, a little history

If you aren’t familiar with Mark Twain or Tom Sawyer, a little history or literary review may be in order. The Adventures of Tom Sawyer is a novel written about a young man growing up on the Mississippi River in the Deep South before the Civil War. Tom is an inquisitive, engaging young man, open to any adventure but inherent lazy. When tasked with the responsibility of painting the fence in front of his house, agonizes over the task.  He’d rather go fishing, or many other things rather than paint the fence, so he considers how to get other people to do the work for him. He settles on a plan to make it appear that painting the fence is more fun than sitting in the shade watching other people paint. As other children congregate to watch him paint, he extolds the fun of painting, and eventually has the other children clamoring to get to paint the fence. By the end of the episode, Tom is found relaxing in the shade as other children paint the fence for him. He has outsourced all the work, at no cost to himself, and has even accepted small gifts from the children in order to allow them to paint the fence.

Innovation the Tom Sawyer way

Corporations can learn from Tom Sawyer and apply his ideas to their innovation needs. This can’t happen without some forethought and strategic planning, but done well it can mean a lot of your innovation activities are actually conducted by a constellation of firms that rely on your insights.

Let’s look at what Tom did to get the other children to paint the fence for him, and what that means for corporate innovators who seek excellent technologies.

1. Create a clear plan. Tom’s parents expected him to paint the fence. Tom needed complete the work, but preferred not to do the work himself. So he created a plan and executed it to perfection.

2. Create demand. Tom convinced others that doing the work was more interesting and more fun than watching the work. Kids who would have normally been out playing were offering small inducements to have the opportunity to do Tom’s work for him.

3. Claim the final product. Tom was able to complete the fence painting, so his parents were happy and none the wiser. Beyond that, Tom ended up with snacks, toys and other gifts that the kids gave him to get to do his painting for him.

How can a corporation apply Tom Sawyer’s approach

Rather than attempt to generate all ideas and all technologies, a really savvy innovator could improve its ability to signal its needs, encourage partners to generate ideas and research, and swoop in to license those solutions before competitors do. To accomplish this effectively, here’s what the savvy Tom Sawyer-like innovator would need to do:

1. Define it’s corporate strategy and communicate it clearly. While this seems obvious, go test it at your company. Many people have little to no idea what the corporation’s strategies are. Even fewer outsiders understand the strategy, so they will struggle to support it until it is communicated clearly.

2. Encourage third parties, research institutions, entrepreneurs and others to engage with you in your quest for the future. Simply spouting a message isn’t enough. You need to build networks and relationships to external firms that can help make your future needs a reality.

3. Create energy and excitement about the research efforts. Tom made it seem like fun to paint the fence, and attracted a crowd who watched and bid for the opportunity to paint. You’ll need a network, but you’ll also need to constantly energize that network to encourage them to work on ideas or technologies that are vital for you.

4. Monitor the progress of external agents constantly and carefully. If you know what you need, and you know what partners are working on, and you know their progress, it puts your firm in a position to

5. License or acquire the ideas, intellectual property or technology at just the right time. As the technologies evolve, are tested and validated, your firm can be the first in line to attempt to acquire or license the technology or idea.

Note that this approach doesn’t absolve you from internal innovation activities, but it can accelerate the development of new ideas and technology with little cost or risk to you, until the concepts are more robust and potentially vetted through customer tests or prototyping. You’ve simply got to make it so compelling for someone else to do your work that they do it willingly, and then you can capitalize on the risks and investments they made when the technologies are ready to implement.

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What The Karate Kid Teaches Us About Innovation

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GUEST POST from Jeffrey Phillips

One of life’s little ironies is the fact that irony is everywhere and so often unidentified or unappreciated. In the innovation space we encounter irony, often unintentional irony, quite often. Before we go further though, let’s make sure of our definitions. Irony has several defintions, dealing with intentional misuse of words, but the definition I’m interested in is:

‘incongruity between what is expected to be and what actually is, or a situation or result showing such incongruity’

What happens so often in an innovation setting is that people demonstrate a significant incongruity between what they believe to be the case, and what is actually the case. Take for example how prepared a new innovation team is to perform innovation tasks. Many people assume innovation is second nature and good ideas should naturally bubble up from our collective consciousness. Therefore, it’s rare that innovation teams spend time coming up to speed on innovation tools, creative thinking or other factors that might support innovation. It’s ironic that in organizations that constantly measure and reinforce training and skill development that innovation receives so little training focus.

Something shiny and new

Perhaps the biggest irony we face is what I’ll call the “new shiny innovation technique”. I recently led an innovation workshop in China. One of the attendees asked me about half way through if I’d be introducing any really “new” innovation tools, since he felt he was familiar with all of the existing tools. After a few minutes of discussion, I realized that he was looking for a magic wand that would simply provide a definitive answer rather than tools that present a range of options. There are two ironies here. The first is expecting a divergent/convergent process that starts from a nascent need and explores customer desires to arrive at one clearly delineated solution that is guaranteed to work. If I had that solution, I wouldn’t be teaching workshops in Shanghai (although I enjoyed my visit). I’d be relaxing on a beach with a pina colada.

The second, and I think the more difficult irony is the search for new techniques for innovation. The reason the search for new techniques and methods is so ironic is that most organizations don’t have command of innovation basics. They will readily admit to poor idea generation results, limited creativity, cramped innovation thinking, little understanding of customer needs and future trends. They are AWARE of tools and methods but haven’t mastered many of them, and yet are dissatisfied with these tools and are more interested in discovering new tools rather than mastering the basics. Here’s a tip: TANSTAAFL. There ain’t no such thing as a free lunch. Or, in other words, do your homework. Learn the basics. Master them. Stop searching for a magic wand that will provide immediate insights into the ideas that are guaranteed to succeed. Don’t believe anyone who tells you their tool, method or process will lead to definitive results.

Quoting Edison

Although he was talking about success, we could easily attribute one of Edison’s quote to innovation as well. He said that many people missed opportunities because “it shows up in overalls and looks like work”. He could have just as easily have been talking about innovation. When we fail to invest in the basics, learning innovation methods and tools, changing corporate culture, emphasizing creative thinking and instead seeking a mythical innovation tool that will deliver ideas that win every time, we are missing opportunities, and ignoring the tools and methods that are best suited to help you succeed.

When you start an innovation activity, don’t spend time looking for the method or tool or framework that promises immediate results that won’t fail. Spend time developing skills on basic innovation tools – like trend spotting, gathering customer needs, creative thinking, idea generation and so forth. Building up a rich base of competencies goes much further than trying to start at the top. Many of these nascent innovators remind me of the movie The Karate Kid. You’ll recall that the young kid wants to learn karate. The local teacher sets him to perform activities at the car wash – wax on, wax off. Over and over he works, never really understanding that he is perfecting the basics. In the end he finally realizes how much the simple basic tools and methods his teacher provided helped him win.

Irony or Earnestness

I think earnestness is the opposite of irony. If you are really interested in learning innovation and perfecting your abilities, learn and perfect the basics. Learn how to think expansively and creatively. Learn how to generate ideas and how to lead others. Learn how to identify customer needs. Learn the basics with earnestness and you’ll find the secret to successful innovation. It’s not a single tool, but a range of tools and insights used in the hands of people who are engaged, empathetic and open to insights.

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Why Corporate Innovation Is So Difficult

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GUEST POST from Jeffrey Phillips

We innovators need to learn to be careful with our language. Too often I hear people conflating words like innovation, invention and entrepreneurship. The fact is that these are all intertwined but subtly different words with very different challenges.

To me, invention is the easiest. Everyone can be, and often is, an inventor. You may invent a new way of doing things, a new tool, a new insight or perspective. But mere invention doesn’t necessarily mean that you “scale” it so others also benefit. No, for that you need “entrepreneurship” – the ability to take a good idea or invention and build a business around it. That’s a slightly more difficult challenge. History is littered with good inventions or technologies that no one could build a business around, or where many tried and failed.

The benefit that entrepreneurs have over corporate innovators is that they must support and sustain only one idea. An entrepreneur should have one really good idea or invention and place all of his or her effort behind that idea. A corporate innovator should similarly place all of his or her effort behind an idea, but must confront the fact that there are hundreds of other existing products and services demanding attention and investment, as well as dozens of other potential ideas or avenues to pursue. This prioritization and resource allocation issue is one of the reasons that corporate innovation is so much more difficult that mere invention or becoming an entrepreneur.

In fact, there are at least four significant reasons why corporate innovation is so difficult:

  1. Past success
  2. Playing defense over offense
  3. Resource allocation and project prioritization
  4. Rigidity of systems and decision making

Let’s look at each briefly, and then wonder how any innovation gets done in larger organizations at all.

Past Success

While it may seem strange that past success is an innovation barrier, past success creates expectations for revenues and profits into the future, and increases sensitivity to risk and failure. As an organization has success, it “learns” and codifies what made it successful. This locks in a way of doing business and a set of expectations about current and future success, which raises concerns about the risks of doing something new and different. The more successful a firm has been, the more difficult innovation, especially disruptive innovation, may become.

Playing Defense

All an entrepreneur has to worry about is gaining her first customer, and then the next one. As a new firm, every consumer is a prospect, and there’s no infrastructure or product portfolio to support or defend. Entrepreneurs are by definition acquisitive. Larger firms, once they’ve achieve some sales success and have built a product portfolio, shift into defensive mode. They want to lock in their customers and defend from poaching. Yes, they’ll talk about acquisition strategy, but that usually means upsell and cross-sell.  When push comes to shove they’ll defend their existing customer base rather than innovate to offer new solutions to new customers. The more defensive the mindset, the more the executive team wants to defend products and market share, the more difficult it will be to innovate.

Resource allocation / Project Prioritization

In both the case of the entrepreneur and the corporate innovator, there’s only so much money, time and resource to go around. The entrepreneur is going to spend 100% of everything on one idea. Corporate innovators have to fight for exceptionally limited funds, since the vast majority of resources and dollars are going to flow first to existing products. Once those have been fully (and usually overly) allocated, corporate innovators fight over what’s left. And executives are often left wondering how to choose between innovation projects. Training leads them to prefer projects with a high degree of probability for return, which leads to incremental solutions getting the funds. Unless there are clear strategic roles and a method to carefully prioritize risky projects, all resources and funding will flow to incremental innovation projects.

Decision Making and Corporate Processes

Imagine if you will the corporate innovator who has convinced the executive team that a disruptive innovation project is valuable and important, and has won funding and resources. Imagine as well that the team, against odds and through many distractions creates interesting, valuable ideas. Now imagine the innovation team trying to convince the development teams to build a new product, the IT teams to change software to support the new product, and training the sales and marketing teams to launch the new product. Of course all of this is going on while the corporation is supporting hundreds of products and projects. Corporate decision making and sustaining processes make it exceptionally hard to convert a good idea into a viable product. After all an entrepreneur can spin up a new product in her garage or completely outsource development, and support the business with Quickbooks. A large firm must make resource allocations, project  decisions and software investments years in advance, which can hamper rapid change and innovation.

Tip your hat

So tip your hat to the corporate innovator. She’s got to overcome a significant amount of inertia and risk, convince an executive team of the need for innovation, then fight to keep the scope of the project as large and as disruptive as possible. She’s got to overcome existing allocations and fight for resources. She has to overcome cultural biases against risk and uncertainty. And, once she’s succeeded at creating valuable, interesting ideas, she’s only really begun to fight. With a good idea, she needs to convince the development team to make it, the IT team to support it, and the corporation to launch it.

Having been both an entrepreneur and a corporate innovator, I can tell you there’s no contest. Corporate innovators have the toughest job. I’ll always take the role where I am 100% responsible and control 100% of the decisions and resources and get to make up the processes and decisions as I go, rather than be bound by years of culture and decision making, in a culture that is trained to be risk adverse.

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