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.

Why Innovators Make Terrible Firefighters

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GUEST POST from Jeffrey Phillips

Let me first acknowledge that this post has nothing to do with real firefighters – you know, the guys who actually risk their lives in burning buildings. This post has to do with business “fire fighters”, those mid and senior level executives who rush into “critical” situations to clean up terrible customer service or rush to fill a product gap. They are “fire fighters” in the same way that NFL players refer to themselves as “warriors”. Last time I looked, no one was shooting at an NFL quarterback, or detonating improvised explosive devices on a football field. We could start a whole blog about the expansion and misuse of language in a business setting when we compare managers to warriors or fire fighters, but that’s a blog for a different day.

The urgent over the important

Every day, executives and managers in corporations rush around, trying to keep the status quo working under optimum conditions. Ideally, nothing, and I mean nothing, should divert the attention of the highly tuned business processes from their regular assignments. No distractions, no diversions, just focus, focus, focus. Except when there is a “fire”. Typically a fire in this sense is an angry customer, a competitor with a new product or service, a major product failure or quality issue. These fires throw everything to the wind. Once a fire has been declared, it’s Katy bar the door. The designated “fire fighter” can do almost anything, disrupt almost any process, reverse almost any decision to put out the fire. The one time that almost anyone can subvert the existing processes with immunity is in the face of an overwhelming immediate problem that everyone agrees must be solved.

But look more closely. Fire fighters are far more destructive than creative. Real fire fighters kick in doors and windows, risk their lives to save people and property. Often, in order to save a building or neighboring dwellings, they have to destroy a property in order to save others. And, once the fire is safely extinguished, real fire fighters may assess the cause of the fire but do nothing to start reconstruction. Business fire fighters follow the same approach. Their focus is to fix the issue as quickly as possible, patch over problems, quickly resolve situations. They don’t stick around to rebuild and repair. Returning operations to normal is what a business fire fighter is supposed to do.

Why fighter fighters are terrible innovators

Business fire fighting makes for terrible innovation. This is the ultimate example of the urgent over the important. Fire fighting is the triumph of convergence over divergence. A pressing problem needs to be solved immediately, and the existing operating system needs to be repaired and brought back on line as quickly as possible. In fire fighting, there’s no time for research, or reflection, or idea generation. It’s get the thing back on line as quickly as possible, with as little disruption as possible. It’s perfectly fine to knock down some pre-conceived notions or limitations, just so we can return to status quo as quickly as possible. And don’t worry, we’ll clean up the debris later.

Corporate fire fighters don’t have the time to do any real innovation work, and frankly that’s not their job. Their job is to restore order as quickly as possible, not necessarily to improve or disrupt the process but simply to restore the process. But as fires increase, simply patching and restoring the process takes precedence over reviewing, rethinking and dramatically improving the process. As more and more fires erupt, there’s less and less time for innovation, and more and more experience in fire fighting. But fire fighting doesn’t improve the situation – it merely restores order to a point where everyone is moderately satisfied. All the energy expended doesn’t move the organization forward, and in some cases processes and capabilities revert. And while all that energy is expended simply restoring order, markets and customers are moving on. They aren’t waiting for you to get your act together, patiently waiting for new products and services. They are shopping your competitors.

Innovators are terrible fire fighters

Innovation, by its very nature, is a terrible toolset to use to put out fires. Innovation is a divergent/convergent process, which means it seeks to expand the scope of an opportunity or problem, explore the boundaries and discover new needs and expectations. If a fire is burning, most people want to rush to put it out – they want to rush to solutions, rather than explore possibilities. Innovators don’t rush – they learn, explore, discover and then create completely new and unexpected solutions that don’t patch the existing but create something more powerful and more relevant. Innovation is proactive, seeking to cause problems that other firms must respond to, rather than waiting to respond to market actions and competitive threats. While fire fighters rush in after a problem is identified and attempt to return to status quo, innovators predict where opportunities lie and understand the potential solutions, creating problems for competitors and frequently disrupting internal processes and decisionmaking along the way. Innovators aren’t equipped to rush, to skip steps or to restore order to the status quo. They existing to discover, understand and bring to market solutions that may disrupt the market paradigms rather than repair existing processes or products.

Where’s the expertise?

The problem resides in the fact that executives and managers have far more comfort and expertise fighting fires. There’s more glamor in the role, the results are more highly celebrated and many good executives made their careers on solving big problems and putting out fires. The more comfortable people are in a particular setting, the more likely they are to favor that setting and reject or avoid settings that they don’t understand or where they don’t have skills. And if you aren’t careful, innovation activities become overwhelmed and subsumed into fire fighting, since that’s where the experience and glory lies.

But at the end of a firefighting exercise what do you have? Smoldering ruins, hopefully running at peak historical efficiency with no noticeable improvement. A return to the status quo, with no new features or benefits, while customers are moving on, expecting and demanding more. There are three things we need to do quickly:

1. Divorce the concepts of “fire fighting” and innovation. While both are about solving problems, they use very different approaches and time scales. They are different and need to be treated differently

2. Demand more innovation, to cause fires for other firms. Most firms need to be far more proactive, creating problems and challenges for other firms rather than responding to market and competitive threats.

3. Make innovation as rewarding as fighting fires. Today, a manager who is “fighting fires” is celebrated. Innovation, as a more explorative, time consuming and contemplative activity, doesn’t seem like real work and doesn’t solve immediate problems. Until innovating is held in as high regard as firefighting, managers and executives will continue to revert to fire fighting as the chosen path.

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The Five Sources of Innovation Consultants

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GUEST POST from Jeffrey Phillips

Recently a newly minted MBA contacted me, expressing interest in work as an innovation consultant. What I found interesting was that the individual offered up the other firms he’d contacted, and from his note to me it was clear that he didn’t understand the differences between firms that offer services in the “innovation space”.  What’s true about this individual is often true about our prospects and clients. They view “innovation” as a unified set of tools and procedures, while failing to realize that in reality innovation is being defined by the firms that enter the space, and many of those definitions have very different implications.

Innovators, and innovation firms, spring from a wide array of sources. Since there is no “standard” for innovation, in the manner of AICPA for accountants, or even a framework like ASQ or others provide for Six Sigma, innovation remains an umbrella term that contains a wide array of very different providers.

The Five Sources of Innovation Consultants

In general, innovation consultants spring from one of five “domains”. Those are:

1. Strategy. Firms like Booz, McKinsey and other firms that offer strategy advice have noticed the growing demand for innovation.  Further they have recognized the linkages between strategy and innovation, and they want an increasing role. That’s why Monitor purchased Doblin years ago, and probably why Booz and PwC are in negotiations. Recognize that most of the innovation advice from these firms focuses on the effects innovation should have on strategy, and vice versa.

2. Design. Firms like Continuum, Frog, IDEO, Doblin and a host of others come at innovation from a design perspective. Their overriding focus is to view innovation from a lens of design. Increasingly we’re seeing a consolidation of these firms. Many large consultancies of many different stripes are purchasing small design shops. It will be interesting to see if the integration works, because many of the expectations and business models are different.

3. Marketing/PR/Marcom. Many marketing and PR agencies entered innovation because they are in the “Creative” space and have familiarity with innovation tools. For many, their end goal is to help package, launch and market their new creations. They are often light on knowledge transfer, as they’d prefer to provide ongoing services rather than teach clients how to innovate.

4. Creativity and/or Training. The fourth category are firms that approach innovation from a purely creative space – such as those springing from CPSI or firms that focus on training. These firms often solve deep issues in innovation but don’t often offer a breadth of service necessary to sustain innovation.

5. Innovation as a process or capability. OVO and others sit in this category. We focus on innovation as a defined workflow or process. Our roots are from process engineering and capability development. We view innovation as an important but poorly defined and poorly staffed process or capability.

As you can imagine, different innovation firms have different perspectives and different staffing and capabilities. When a client (or a potential employee) is interested in innovation, it pays to understand the roots of the firm in question and how they view innovation, and the capabilities and skills they will focus on when serving clients.

In-Source or Out-Source

Another important factor for a company considering innovation is to assess how much of the innovation work it wants to do internally and how much it wants to outsource. Innovation requires a range of insights and observations, idea generation and product design. A firm can choose to do all, some or none of that work internally. Many consultants prefer to offer what we call “outsourced” innovation. In this model a client hires a consulting firm and describes its markets and potential product needs. The consultant returns months later with developed prototypes and supporting evidence. In this model the client receives reasonable solutions with very little investment of its own people or time, but is dependent on third parties for every new innovation.

We at OVO and others like us focus on “insourced” innovation, meaning we define processes and tools and train internal teams to perform a significant portion of this work. By gaining skills, corporations can do much more of the innovation work internally and become more self-reliant. That’s not to say with the advent of “open” innovation that they’ll do all the work, or all the development, but it does give the executives a choice.

Making the best decisions

When a client, potential partner or potential employee is considering innovation consulting firms, it’s important to recognize they are not all created equally. Perspective is a factor. Understanding what the origin of the firm is, and its current perspective, will communicate how the firm is likely to view your needs. Understanding the amount and scope of change you desire, and the amount of resource you can commit is important. Considering the role of innovation:  is innovation an occasional, one-time event or do you want to build a consistent capability?

Understanding these and other factors will help you be more successful in your own innovation pursuits, and will help you select potential partners that can address your needs more capably.

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Discomfort Is The Key To Innovation

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GUEST POST from Jeffrey Phillips

For years now we’ve been told that innovation is strange and unusual, but promises great possibilities and potential returns. We’ve been regaled with stories about noted innovators, individuals and corporations, who demonstrate how to innovate. Individuals like Steve Jobs, corporations like 3M and P&G. These stories are meant to reduce the fear and uncertainty associated with innovation, and demonstrate success.

Through training, exercises, cultural shifts and many other activities, we’re meant to see that innovation is simple, friendly, engaging. We’ve spent massive amounts of money and time trying to get people to see that innovation isn’t difficult, isn’t threatening. At this rate the Teletubbies will be offering innovation training courses. Of course, anywhere there’s a “Dummies Guide“ you know the content has been simplified to bring more people aboard.

I’ll admit I’ve been guilty of advocating for simpler, more straightforward innovation.

I thought through training and cultural change we could reduce uncertainty and resistance to innovation tools and techniques. In some cases and places, we’ve been successful, but there’s something to be learned in the lasting resistance to innovation on the whole. No matter how much you dress up the wolf in the sheep’s clothing, no matter how the lion tamer demonstrates the lion is tamed, many people are simply not going to accept that the level of risk and uncertainty around innovation has been eliminated.

We’ve trained an entire generation of people to perform at levels of efficiency that are unparalleled in the history of civilization. And in doing so we’ve robbed them of their ability to think, and dream up new or unusual solutions that would violate existing business as usual tenets. No where are any group of people more likely to reject good ideas than in settings where business teams try to subvert their own existing methods and processes. For too long we’ve tried to reduce fear and uncertainty around innovation. It’s time we learned something from the continued resistance. Let’s take a new tack.

Discomfort is the key

While working to reduce the fear and uncertainty associated with innovation is important, it’s not enough. Far too long we’ve worked to make innovation safer, more repeatable and more acceptable. Those criteria are important, as is transparency, repeatability and continuity. But we need to recognize a key point:

people aren’t going to innovate simply because we make it easier or friendlier or less risky to do so.

We can’t conceive of a point where enough people will be comfortable enough with innovation to do it constantly without provocation, except in situations where the condition already exists, such as in entrepreneurial firms or the few firms we hold up as innovation stalwarts. Rather, we have everything in reverse.

What we should be doing instead of creating more comfort about innovation is creating discomfort about the status quo. Nothing generates more energy and enthusiasm for change and new products and services than an impending corporate strategic change, an external threat or a profound market shift. These have the ability to create true discomfort with the status quo. And when the status quo is uncertain, that’s the time when innovation can become very appealing. We may not be able to eliminate the complexity or fear of innovation to engage more regular innovation, but we can certainly create discomfort with the status quo to drive more opportunities for innovation.

The reason that discomfort is so important is that as humans we are creatures of comfort. If we can repeat the same tasks and avoid threats, and avoid having to work harder to learn new methods or techniques, we are perfectly happy to remain in the same methods and processes, creating the same products and services. This is a “comfort” zone, and it will take a lot to make us leave. No matter how much we sugar-coat innovation and make people more aware of the tools and possibilities, innovation is more risky and requires more work for less certain outcome than returning to the status quo.

Why wait?

The problem many businesses face is that the status quo is too comfortable and too profitable to change, so the only discomfort that’s important comes from external agents or activities. Competitors introduce a new product, a new entrant siphons off customers, a government entity creates new regulations that close off a market opportunity. Then the status quo is threatened, and innovation becomes an uncomfortable but viable option. Innovation, however, is a far better tool when used in a proactive setting than in a reactive mode. If all you need is to “catch up” to average market expectations set by a new product or service, you don’t need innovation, and the tools and techniques aren’t well structured to play catch up anyway. But why wait…

The best innovators know they need to cannibalize themselves before someone else does.

This means good managers must create discomfort about the existing products and markets before they are disrupted by someone else. While you need good innovation methods and training, you’ll never approach a point where everyone is “comfortable” with innovation. What you need is to create more discomfort with the status quo than there is discomfort with innovation, and then provide the leadership, tools and methods to sustain innovation.

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Why Innovators Are Like Astronauts

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GUEST POST from Jeffrey Phillips

Today I’m going to talk about the movie Gravity and how it relates to innovation..

This talk is based on a workshop we provide called Thinking outside the Box. Many of our clients want their teams to “think outside the box”. To do that, you first have to realize that a “box” exists, and think about life outside that box. In doing that, we decided to use astronauts as people who definitely work “outside the box”. Astronauts work in locations with zero gravity, wild temperature fluctuations, and of course the issue of no oxygen or atmosphere for that matter. In that regard, astronauts become very aware of working and thinking in a new box.

What Innovators share with Astronauts

If you think about astronauts, you might recall the famous book, later turned into a movie. That book was The Right Stuff. It celebrated the early astronauts, most of whom were “fly boys”, test pilots. These guys seemed to have less fear, more interest in testing the limits, and were volunteers. These characteristics are also vital for innovation. When you are likely to disrupt existing processes and practices, you need to have a much higher risk tolerance, and you should be a volunteer.

The Right Stuff notes that the reason we were so anxious to go into space was that the Russians were beating us to it. When the Russians launched the first space capsules, suddenly we were behind. The race for space became a significant issue, so important that John F. Kennedy made his famous request to send a team to the moon before the end of the decade. When the Russians beat us into space, getting there quickly and beating the Russians became a “burning platform“. Similarly, innovation teams require a “burning platform”. Without a significant push or rationale, many innovation projects peter out quickly in the face of existing business as usual focus and time constraints.

As I noted in the previous paragraph, the race for space became a mission, And every mission needs a chief sponsor, someone who defines the goals and places emphasis on the activity. In the case of the space race, the sponsor was the president of the United States – not a shabby sponsor. He staked his own presidential success on the mission. He was clearly engaged. Likewise, innovators need engaged, committed sponsors. Without someone to provide resources, clear the obstacles and provide backing and leadership, innovation projects die.

What Innovators need to learn from Astronauts

Perhaps one of the most interesting things about astronauts is that they go into space to do things. They literally work in the “new box” of space. This means that they have to learn to work effectively in a very new and unusual box. In space, there is far more risk to doing many types of work. Low gravity means that many types of work must be done differently, otherwise Newton’s laws will require that the astronaut shoot off into space. Astronauts must learn to work in a weightless environment, and work in a clumsy suit. Tools are different, processes and activities are different.

Consider now the innovator. We ask them to “think outside the box”, so they must work in a new environment where the tools and methods are different, risks are increased, processes are unfamiliar. While they don’t have quite the same level of hazard as an astronaut, to many the risks seem quite the same. And, while astronauts prepare for years to go into space, working in near weightless conditions, using new tools, familiarizing themselves with procedure and process, innovators are rarely trained and frequently start innovation projects in the “new box” with little awareness of tools, procedures or processes. For success, innovators need to train before they enter the “new box“.

Finally, astronauts have an interesting end to their journey. They ride a metal bucket through the atmosphere at hundreds of miles an hour, generating thousands of degrees of heat. In many cases the re-entry is the most dangerous part of the journey. Innovators too face difficult and uncertain re-entry, for themselves and their ideas. Ideas that were generated “outside the box” often don’t fit when they are attempted in the original box. As we like to say, either the ideas change or the existing business as usual changes, and you can guess which one has more power.

Ralph Waldo Emerson said that once a mind is stretched by new experiences it rarely returns to its original status. The same is true with innovators. Once they have truly encountered and worked in a new box, they are often disappointed and dissatisfied with returning to business as usual operations. This is why “re-entry” is difficult not only for ideas, but also for committed innovators.

Innovators need far more training and preparation to leave their existing “boxes” and work in new boxes with new methods and tools. They need to be proficient in the tools in order to do good work. And when they do good work, they need help with “re-entry” – bringing the ideas back to the regular, everyday work world of business as usual, which is very likely to reject their ideas.

What can we learn from astronauts?

Granted, few innovators will face what Sandra Bullock faces in Gravity. They won’t have to work in zero-weight, in a vacuum, in a space suit. They won’t have to traverse from space station to space station. They won’t have to endure a red-hot re-entry on a ship breaking apart. But most of us won’t face these dangers. The biggest danger many of us face is failing in a high profile task at work. There is great risk associated with doing innovation, especially when the task calls for significant disruptive ideas. When executives start talking about getting “outside the box”, for all intents and purposes you are leaving the atmosphere, and working in a new environment with new tools and heightened risks. Good planning, good preparation, good sponsorship and a good plan for re-entry are vital to success.

In fact, the only real difference between astronauts and innovators is the space suit. And perhaps the view.

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Why Innovation Needs Its Own Language

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GUEST POST from Jeffrey Phillips

I’ve been fascinated recently by the role that language plays in an innovation activity. By language I don’t mean different languages (Spanish, French or English) but the language we use to communicate the rationale for innovation, we use to create the context for innovation, we use to define the tools, methods and outcomes for innovation. There, I’ve done it. Filled my quota for the use of the word innovation.

As I’ve written before, the word innovation is so abused and misused it has become almost meaningless. Or worse, it means whatever the active speaker wants it to mean. I’ve been in situations with clients where everyone is using the word innovation, but they have very different perspectives and definitions of what that word means to them, their teams and their products or services. It’s clear we need to start fresh and this shouldn’t be a surprise.

When we as humans encounter any significant technological, demographic or social shift, it’s common that new words or language enters our common vernacular. We are undergoing a shift in new product and service development, which is causing us to sound a bit like a parrot who only knows one word – innovation. What we need is a new innovation language. We need to define words, phrases and meanings so that our conversations and plans have value, and communicate effectively. Just as words like tweet, blog, and LOL have entered our common vernacular with the advent of social media, so to do words like incremental, disruptive and open, along with a number of other words and phrases, need to be nailed down, made consistent and used effectively. Look at just a few commonly used words that are fraught with meaning when used in an innovation context.

Risk

If innovation is overused to the extent that it no longer means anything, the word “risk” when it comes to innovation is also misused. There are many types of “risk” associated with innovation. The largest risk is the one that is never mentioned. The most important risk is the risk of doing nothing, of staying the course, of doing what is safe and reasonable. When we talk about innovation “risk” we talk about the potential for failure of a new product, or missing key features or benefits, or creating products and services that don’t have the profit margins that are expected. There’s just as much risk in doing nothing, or in thinking that taking “risk” out of a situation means that we should ensure the ideas are simple to understand and implement. We can take risk out of the equation by simplifying the product to the point where it is indistinguishable from existing products and services, or we can retain a bigger, bolder image of what the idea can be and seek to eliminate risks or cultural barriers external to the idea.  Defining the notion of risk is vital in an “innovation” activity.

Product

Another failing of our existing language is the narrowing of options. So many times people will talk about the outcome of innovation in “product” language. Innovation is capable of much more than simply developing new, tangible, physical products. Innovation can drive new business models, new customer experiences, new channels, and so on. When we talk about “innovation” in the context of “products” we are intentionally or unintentionally limiting thinking and potential outcomes. If your intention is to limit the scope of the activity, then be explicit about that intention. Don’t allow sloppy language to leave your teams in the dark.

Open

Everyone wants “open” innovation, and they are correct in their desires, but hazy on the definitions. Open can mean anything from asking customers for ideas (a la Dell’s IdeaStorm) to close partnering with highly vetted channel partners to working with firms like Nine Sigma to post blind RFPs. What’s typically missing in an “open” innovation activity is the strategy and defintion, not the tactics. Open innovation, like innovation generally, means whatever you want it to mean.

These are just three commonly used words that have important meaning when used in relation to innovation. There are plenty more which are misused, and there are instances in innovation where we have no good word to describe what we are trying to do. Building and analyzing scenarios, there are always “themes” or “threads”, but neither word adequately describes what we want to tease out. During customer research, we hope to discover customer “needs” or desires or gaps, but even experienced innovators conflate “wants”, which are aspirational, with “needs” which are more consistent and more basic.

One other language problem

In business we’ve become accustomed to language as a precursor to decisions or actions. That is, from emails to texts to instant messages to staff meetings, much of our communication and hence our language is about actions, measurements or results. However, much of the discussion about innovation is more focused on platitudes (we need innovation, innovation is a vital part of our business, etc) or pure propaganda, language used to send messages that have no further intent. Innovation language is often a signaling message to the market, to indicate that we understand innovation is important, but under the covers we’ll continue to carry on as before.

This is how innovation loses its meaning, and introduces cynicism and doubt in an organization. Far too much conversation and communication about innovation is for show, not for go. Words and language lose their meaning and effectiveness when they are used constantly but nothing changes.

Challenges

Any organization that hopes to innovate consistently and well has the following challenges with language and context that it must address in order to work more successfully:

  1. Lack of shared meaning
  2. Lack of systemic context
  3. No clear linkage to strategy or goals
  4. Ideas no longer hold their original meanings or the culture rejects their meaning
  5. Language limits or narrows discussion or thinking rather than encouraging and broadening it
  6. Words become filler or placeholders, not meant to encourage thinking or action

What is your innovation language? Do the words you use have shared meaning? Do they work within a common context? Is there certainty and urgency in your communication about innovation? If you can’t get the language right, how do you expect to generate better thinking or improved products? Everything that we do in a collaborative sense relies on excellent communication. If you start with and foster poor communication, how can you hope but end up with poor products and services?

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An Innovation Christmas Carol

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GUEST POST from Jeffrey Phillips

Ed Scrooge was tired

It was only 4 in the afternoon, but back to back meetings throughout the day had exhausted him. Leading a mid-sized public corporation isn’t easy, and as the quarterly updates trickled in he could see that Hanson Enterprises wasn’t going to make the numbers that his CFO had signaled to Wall Street. Two quarters and two near misses. His reign as CEO might not last much longer if the financial results didn’t pick up.

He stood and stretched, and eyed the wet bar in the corner of his office. Outside the snow pelted down, and dusk had already started to descend. Just outside his office he could hear the buzz of an active office. He wondered how to redirect all of that energy to driving better financial results. A Scotch bottle finally got his attention, and he poured just a small tot – enough, he told himself, to get through the rest of the quarterly financial reports and projections. He knew Bill Leonard, the CFO, would want to review everything at 5 in order to have a message ready for the Wall Street analysts on the quarterly call next week.

He plopped into his chair, swirled his drink and pondered his path. Twenty years ago he’d been a newly minted MBA, with a role in corporate finance. Ten years ago he’d been the financial officer for Hanson’s main product group, and just three years ago had been named the CFO. How time flies. Issues that seemed so important 20 years ago seemed so routine today. Nothing had prepared him for the task of CEO. He knew the numbers. He knew them backward and forward. No one had ever been better at squeezing costs out of a product, or creating more efficient processes.

His rise had been quick, and he’d felt that success as CEO was assured. But he found himself somewhat unequipped to lead Hanson where he and others knew it needed to go. Hanson needed to innovate. For too long it had rested on technology advances and products created five even ten years ago. Hanson needed new products and new growth platforms. The analysts told him that. His own strategy council reminded him monthly. He knew innovation was important, but wasn’t sure how to introduce it to Hanson, and didn’t want to create distractions to an organization barely making its numbers.

Sure, he’d glanced over some of the books on innovation. He’d been to a few executive presentations where speakers like Christensen and Chesbrough talked about the urgency and importance of innovation. But it all seemed so risky and uncertain. In his existing businesses, he could always apply trusted models to cut costs and improve efficiency, constantly meeting or exceeding financial projections. But that all changed a few years ago. Suddenly it seemed that the level of competition had increased, and new competitors were emerging from everywhere. These new competitors didn’t have the overhead or product breadth to support, and created new channels to reach customers and used social media much more effectively.

Ed rested his head on the back of his deep office chair and rested his eyes for just a moment. An unscheduled hour in his calendar was almost unheard of, and he’d meant to use it for strategic thinking. A moment’s rest couldn’t be wrong. Some creative thinking, a little brainstorming…

His office door banged open and Jacob Marley rushed in. Ed was a bit taken aback.

“Jacob. What a pleasant surprise. Were you on my calendar today?”

Ed felt surely the answer was no. Bob Cratchitch, his personal assistant, was a fastidious planner. Jacob wasn’t scheduled. What’s more, Jacob was dressed in what appeared to be golfing attire and was leaning slightly on a golf putter.

“No, you lazy sloth, we don’t have a scheduled meeting today. But I’m here to press a complaint. Your shareholders are angry, and few of them are angrier than me.”

That shareholders were a bit restless was no news. That Jacob might be upset was a no brainer. Ed took over from Jacob as CEO. Much of Jacob’s personal wealth was tied up in Hanson stock.

“What can I do for you, Jacob?” Ed was prepared to humor Jacob, answer a few questions, give him the same platitudes as they reserved for the analysts and glad-hand him out the door before the CFO came for the 5 o’clock.

“It’s not what you can do for me. It’s what I can do for you that matters today. I’m going to introduce you to three perspectives that illustrate how we got into the position we are in, and help you make choices about what to do next. I know you are confused about. Perhaps together we can discover what to do, before you are out of a job and I’m forced to cut back on my country houses and golf club memberships.”

“That sounds great Jacob but I’ve got an important 5 o’clock with CFO. Could I get Bob to find some time for us to get together?”

“There’s no time to lose” he said. “Touch this putter we’ll look at the recent corporate past.”

Touch the putter? Look at the past? Jacob’s gone a little soft in the head, wondering in without a scheduled meeting and talking the way he does. Perhaps I’ll just humor him.

“Ok, Jacob I’ll touch the putter. Do you mind if I call Bob in to help us while we talk?” hopefully Bob can call security.

Scrooge touched the putter and simultaneously reached for the intercom to talk with Bob. But in the next instant he found himself hovering over a cubicle in Cincinnati that looked vaguely familiar.

Corporate Past

“Yes, Ed, that’s your first cubicle, where you did financial analysis in Cincinnati. Look, that’s you there, racing through spreadsheets, burning the midnight oil, looking for costs to cut. I think this was the year that EVA was big.”

“What is going on?”

“Like I told you, we’re going back to look at the past, so we can determine how Hanson got into the shape it’s in. We need to go back to the time when much of how Hanson works today was originally implemented.”

“But how…”

“Oh, don’t worry Ed. Even though I’m retired I have a few tricks up my sleeve. Do you remember implementing that ERP system? Or how about process re-engineering? And just after that, we started a Six Sigma program. Weren’t you one of the first “black belts”?

“Umm, yes. We implemented a lot of those programs to reduce costs and improve efficiency. Those were programs I supported and some of them you sponsored.”

“Oh, I’m not trying to let myself ‘off the hook’ so to speak. Sure, we did what seemed right at the time. But this preoccupation with cost and efficiency means that we lost our innovation edge.”

“We had excellent results and drove up our stock price.”

“Yes, at the time, but we also made innovation more difficult and trained people to focus on short term efficiencies. Those decisions created a culture focused on short term thinking that defends the status quo and has no bandwidth for innovation. Let’s go take a look at what that means today.”

Christmas Present

Suddenly Jacob and Ed were present in a board meeting. Ed recognized the meeting, which had taken place a week before. Many of the board members were unhappy with the stock price. Competition was fierce and Hanson lagged behind in new product releases. Shareholders were angry. Ed had taken a pounding that day.

“You left that meeting, went home, kicked the dog and tossed back a few I bet.”

“The board were tough but they weren’t wrong. We are getting our butt kicked in the market. It’s not as though we haven’t asked for more innovation. Everything our teams create seems to be a response to a competitor – a ‘me too’ product. We haven’t created anything interesting in years.”

“That’s my point Ed. The programs and systems we put in place 20 years ago have defined corporate culture and severely limited creative thinking and risk taking. You may ask for innovation from your teams, but if they don’t have the tools, the time or the experience, you can’t complain when the innovation lags.”

“But we aren’t Apple. We compete in a fairly stodgy B2B industry. Our margins are razor thin. What are we supposed to do?”

“I’m no innovation expert, but I’d say doing more of the same isn’t an option for long term growth. Let’s go take a look at two possible futures, Ed, and then you tell me which is more interesting to you.”

Christmas Future

Ed and Jacob emerge from fog. There in front of them sit Ed and his wife, on a beach in Southern Florida. The scene is peaceful.

Ed says “well, I must have done something right in this scenario”.

“Nope. In this scenario you didn’t respond to market needs, didn’t lead your team to innovate more frequently and failed to develop innovation skills. You’ve just been pushed out by the board. Hanson’s stock is in the toilet and the board is looking for a white knight to avoid a corporate takeover in a leveraged buyout.”

“What’s the other scenario?”

“You know the drill” so they touched his putter and off they went. They emerged in Ed’s office. Some of the senior executives were drinking champagne. The buzz in the room was palpable.

“What’s happened?”

“You and your team made innovation a corporate priority. You allocated a significant amount of money and resources to develop innovation skills, and started evaluating your leaders on their innovation efforts. Several of the new products were real rock stars. The party is for the launch of a ground-breaking new product that will fundamentally change the industry.”

Back to the present

Ed jerked, almost dropping his glass. The desk clock stood at 4:59 and the CFO was tapping at his door. He chuckled to himself, thinking he had drifted off for just a moment, till he noticed a putter resting on the wall near the door.

He beckoned the CFO into the room and said “I want to make some changes to how we are allocating our funds. It’s time to make a real move toward innovation”.

Somewhere on a golf course, Jacob Marley and several million shareholders smiled.

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Is Your Innovation a Step, Jump or Vault?

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GUEST POST from Jeffrey Phillips

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

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

Energy

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

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

Experience

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

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

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

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

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

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Separating Entrepreneurs from Corporate Innovators

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GUEST POST from Jeffrey Phillips

It’s probably a distinction without a significant difference, but I try to distinguish very carefully between entrepreneurs, inventors and corporate innovators. While there are some significant overlaps in goals, purpose and intent, there are also some very significant differences which I’d like to explore.

Entrepreneurs play a vital role in creating new technologies and forming new companies, and corporate innovators play an important role as well, revitalizing and refocusing the energy of larger corporations. But what they face in doing their work is very different, and both should be considered in isolation – in context of their environment. While it seems counter-intuitive, I’ll make the case that the corporate innovator, by and large, has the most difficult job.

What’s common

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

What’s different

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

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

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

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

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

Who has the tougher job?

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

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

How can you incorporate the best of both?

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

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

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Can You Spare an Innovation Dime?

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GUEST POST from Jeffrey Phillips

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

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

The blessings of Efficiency

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

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

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

A new iron triangle emerges

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

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

Solving the People Problem

In any organization that hopes to innovate successfully, the availability problem must be addressed. As many of you know, it’s not just “any staffer” that can become a good innovator. The people problem is compounded because innovation requires, demands the best people in your organization. There are only a handful of methods to solve the problem:

1. Add staff to create some slack in your resource system

2. Ask the existing staff to do even more, to free up a few individuals to focus on innovation

3. Outsource critical tasks or the entire innovation process

The first option, strangely, is almost a non-starter, even with the abundance of people available. Most firms want to limit hiring.  It’s become too hard to hire and to train, and too difficult to let people go as needs change. The second option – shifting responsibilities – is what many firms attempt, but when people are already overtaxed, they struggle to do a good job at innovation in a very limited timeframe and with no training or tools. This is why most innovation in incremental at best.

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

There’s a final option, which is to make innovation so central to your activities and processes that it everyone is doing it all the time, almost effortlessly. I’ve written before about shifting your “business as usual” to incorporate innovation, so that innovation is “business as usual”. When everyone is doing it and innovation is part of the fabric of how you work, the people problem won’t disappear, but it will become far less of a concern.

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Putting the Solution Cart Before the Innovation Horse

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GUEST POST from Jeffrey Phillips

So, here it comes again. Another blog post using an old standby as a way to make a point. Today’s old standby is the adage about placing the cart before the horse. In the fast paced world in which we live, there is great pressure to skip ahead to activities or actions that seem to provide value, or to assume we know enough information to skip over the humble act of understanding what people want and need. To that end I see far too many clients putting solutions and technologies ahead of innovation.

What’s worse, they are calling the selection of a new technology or solution “innovation” before they’ve done any customer insight work or research, or worse, in lieu of doing any trend spotting or customer insight work. Many clients are simply declaring a solution or technology and then using “innovation” as a way to validate their selections. This is problematic on a number of levels.

Reversing the order

The first problem is in reversing the order of the process. While everyone likes closure, the selection of a tool, technology or solution before investigation of the underlying problem doesn’t guarantee you’ve got the right solution. The solution chosen may be the right one, but if so don’t dress up the presentation in “innovation” clothes. You’ve simply made a management decision to select and implement a tool or technology based on gut feeling, pressure from a manager, customer or vendor, or some other reason. Choosing a new technology without understanding customer needs may lead to the right outcome, but it’s not innovation. Innovation starts by understanding evolving trends and unmet customer needs, acts of discovery, then defines potential solutions and identifies the best one based on gathered insights. This places discovery before selection, not in service of the act of validating the selection.

Innovation as a cover for decisions rather than a basis

Innovation should help create insights that lead to informed decisions, not provide a cover for decisions you planned to take anyway. There is already far too much cynicism and fear associated with implementing anything new or different. Innovation faces far too much cultural and change resistance, why create new reasons to doubt innovation and its potential outcomes? Everyone recognizes that true innovation outcomes (growth, differentiation) are important. Why water down the innovation possibilities through defining a selection of a solution or technology as innovation, rather than doing the work that’s necessary to discover whether or not the solution is the right one?

Short cuts often lead to poor outcomes

Ultimately, teams or managers that select technologies or solutions and implement them under the cover of “innovation” are taking short cuts. They are skipping over important and necessary discovery work, which speeds up the decision process and moves to implementation. But the cost of the short cut is that often a solution or technology chosen in this manner doesn’t provide the benefits customers want, and fails to deliver the benefits the firm wants. Short cuts almost always lead to solutions that are less than what was possible or achievable. Often the work of discovery isn’t expensive or time consuming. That work is rejected because of a rush to get to an answer – any answer, rather than admit that we don’t know or can’t be bothered to learn. If you are clairvoyant and know the answer in advance, you belong in Vegas. Can you and your team be humble enough to work with customers to discover needs, rather than triumphant enough to select based on your own intuition or preference?

Begin with the end in mind

Stephen Covey often talks about his seven habits, one of which is “begin with the end in mind”. What is the “end” you want? Fast completion of an activity based on the selection of a tool or technology that may or may not meet customer needs? Is the “end” implementing solutions that meet or exceed customer expectations? What are you willing to commit to achieve those benefits? Are you willing to put the act of discovery in front of the selection of a tool or technology, even if the act of discovery exposes your lack of knowledge about customer needs? Can you partake in discovery without demanding a specific tool or technology be defined as the logical outcome?

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