GUEST POST from Paul Sloane

If you are trying to transform an organisation which is sluggish and risk averse into one which is innovative and entrepreneurial then you have taken on a massive task. One approach is to use the Prosci ADKAR Change Management methodology as advocated by Jeffrey Hiatt and Tim Creasey. It consists of five key stages.

1. Awareness.  It is critical for the leader to communicate the need for change and the importance of the initiative. Not once but over and over again. Leaders at all levels must explain very clearly why continuing the way we are is not an option.  They must address this question:  ‘We are doing OK right now so why do we need to take risks and change things?’  Nokia CEO, Stephen Elop, famously wrote to employees saying ‘we are all standing on a burning platform.’  The leader must make people aware when, how and why this change is necessary and show that the whole executive team is committed to making it happen.

2. Desire.  The leader has to awaken desire in individuals for the challenge of innovation. Not everyone will react enthusiastically but to seed innovation you need a good number of evangelists, lateral thinkers and experimenters. These people have to be encouraged and empowered.  How can their desire be developed?  Some people are motivated by the challenge, some by recognition and praise, some by monetary reward.  Smart managers understand the differing motivations of their individual reports.

3. Knowledge.  People need to know why we need to innovate. They need to know what areas need innovation. They also need to know how to innovate. What does a good innovation look like?  Do we prioritise new products, services, cost savings or productivity improvements? What software platforms are we going to operate and how will we use them? How can we facilitate effective brainstorm sessions? We have to teach people how to innovate.  You train people for other soft skills so why not train them to think laterally, to experiment and to implement ideas?

4. Ability.  You do not get innovation for free. You have to allocate time, people and money. Innovation needs high level sponsors who are actively engaged in innovation projects. They have to ensure the resources are in place and the inevitable roadblocks are overcome. The organisation has to develop appropriate approval processes, stage-gates and minimum viable products. It has to develop the ability to innovate.

5. Reinforcement. Simply broadcasting the intent to change the culture is not enough. The message needs constant reinforcement. There will be early setbacks and failures. These have to be treated as learning opportunities.  Unless their is constant reinforcement of the message people will see the initiative as another passing fad.  They will revert to business as usual.

The Prosci Adkar Model is explained in the book Change Management by Jeffrey Hiatt and Timothy Creasey.

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GUEST POST from Paul Sloane

How do you choose which of your many promising ideas should get the precious and limited resources needed to bring it to market?  Try using the wisdom of crowds.  Many companies do this with software products which allow people to comment or vote on ideas – and this is fine.  But if you do not have such an app or you just want something more immediate and engaging then try setting up an innovation market.  Here is it how it works.

Choose a limited number of promising initial ideas.  These might be the top choices from brainstorm sessions or from your internal suggestions scheme or from external contributors.  I would suggest between five and ten ideas.  Each idea is assigned a champion who will act as presenter and salesperson for the idea.  They draw up a five minute presentation together with a mock-up, wireframe or series of screenshots which will help people to visualise and grasp the concept.

Set up stalls (or separate rooms) where the presentations will take place.  Now you can summon your crowd or crowds.  They will typically consist of employees but you can use customers or strangers provided there is no potential trade secret to be shown.

Small groups attend each presentation in turn.  The presentation lasts about five minutes with another five minutes for questions and answers.  People can leave notes after a presentation saying what they liked about the idea or with suggestions for improvements.

When people have seen all the presentations they vote – in secret so that no-one can see which is currently the most popular project.  I recommend that you give attendees six votes  – or if you prefer, six dollars to spend in the market.  They vote for two or three of the ideas.  So they can vote 3,2,1 or 4,1,1 or 5,1 or 4,2 or 3,3.  The votes are totalled and there is usually a clear winner.

It is helpful to give people some criteria to help them with their voting.  What sorts of innovations does the organisation need?  E.g. we want to select and implement ideas which are novel, appealing to customers and will generate significant revenues within two years.  Or you may have different priorities.

This method is subjective.  People are influenced by the personality of the presenter, especially someone who is enthusiastic and well-informed.  There is no ROI calculation or detailed business case.  However, the crowds can be often prove to be wiser than the executives.  And a big plus is that there will be better support for the winning idea across the organisation because so many people have seen, contributed and bought into the project.

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GUEST POST from Paul Sloane

In the 1990s John Koza, a professor at Stanford University carried out a series of experiments involving new ways to create electrical circuits.   He designed a programme which created thousands of random circuit designs.  These were measured against desired outcomes.  Most were terrible and were eliminated.  Those closest to a solution were combined and rerun.  This process was repeated many times with the poor performers being eliminated at each stage.  Eventually the process yielded completely novel and effective designs.  It was an algorithm which mimicked evolution and natual selection but at an accelerated pace.  The process has been described as genetic programming.  Since then this approach has been used successfully in various fields – particularly in engineering and component design.  Now big data and artifical intelligence (AI) have changed the playing field.

Innovations often come from seemingly random combinations.  There are now software products which can scour diverse data to find promising starting points for your innovation goals.  Machine learning can search unstructured text e.g. from scientific research papers in order to find potential connections with problems and desired solutions.

Iprova is a Swiss company focussed on this task.  They aim to use machine learning to find diverse signals from huge sources and separate them from the noise.  Clients include Phillips, Panasonic and ABB.   One resulting invention allows an autonomous vehicle to carry out health checks on its passengers using advanced sensors.  It can assess a passenger’s balance and core stability and might be used to identify the early symptoms of conditions such as multiple sclerosis, Parkinson’s disease or diabetes.

It is believed that many large companies are developing similar AI methods internally but they are reluctant to publicise this as it is seen as a secret competitive advantage.

By combining chance and the examination of immense data sets, AI can come up with inputs which humans would be unlikely to conceive.  But while AI can find patterns, unusual signals and original inputs it cannot yet come up with workable innovations.   For any well-defined problem AI can provide a broad range of suggestions for radical starting points on the road to solutions.  We still rely on human creativity, knowledge and insight to convert these concepts into practical solutions for real-world problems.

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GUEST POST from Paul Sloane

The best innovations solve real problems. They provide solutions that customers are prepared to pay money for.   So it seems to make sense that we should listen carefully to customer requests.  But this can be a mistake.  In the famous words of Steve Jobs, “It isn’t the customer’s job to know what they want.”  The customer will often express the kind of solution he would like to see.  Listen politely to his request but spend time observing the problem at first hand. Then think laterally about how to solve it.

In his seminal book, The Innovator’s Dilemma, Clayton Christensen explains why so many companies fail with their innovations.  They make the classic mistake of listening to their customers.  Customers are typically unadventurous and unimaginative when it comes to ideas.  They ask for incremental innovations to your current offerings.  “Please make your product faster, quieter, cheaper, more energy efficient, available in local language etc.”  This leads companies to keep trying to improve the quality and effectiveness of their current products or services.  It leads them away from trying bold new initiatives or alternative approaches.  What is more, customers are initially reluctant to adopt radical new solutions until eventually it becomes clear that they are the new hot product.

Consider this recent remarkable innovation from Mexico – the road that repairs itself. With a mix of additives and old rubber tires, the new pavement creates a putty that reacts to water. When water hits the road, the putty makes calcium silicates that fill any cracks, producing a constantly self-repairing road.  Do you think the customer asked for this?  I don’t.  The customer probably asked for a better road surface which would last longer.  The problem is holes in the road.  The inventor focussed on that and came up with a remarkable innovation.

It is the same story with other big innovations.  Spectacle wearers did not ask for disks to fit on their eyes – but contact lenses were a big success.  Mobile phone users and laptop users wanted higher performance and lower prices.  None asked for a hybrid device.  But Steve Jobs introduced the iPad tablet.  It was initially greeted with some scepticism but went on to be an enormous winner.  Surveys of taxi users showed that they wanted more availability of taxis and lower prices.  The obvious answer is to issue more licences for taxis.  The real problem is how to significantly increase the supply of customised transport. Travis Kalanick created an entirely new model, Uber, based on the spare capacity of drivers who are happy to give someone a lift for a payment.

So by all means involve the customer.  Run your surveys, focus groups and questionnaires.  But treat the outputs with care.  They are signals to be aware of, not signposts that you must follow.  It is not always best to give customers what they ask for.  It is better to solve the problem in a clever, effective and innovative way.

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GUEST POST from Paul Sloane

We tend to revere our clinicians as towering experts in their fields. So how often do you think doctors misdiagnose? How often might your doctor tell you that you have some illness or condition, but it’s not right? For example, a doctor might diagnose the flu, but the patient really has something much more serious – like Lyme Disease.

You might be surprised.  Dr. Elizabeth Burton, a medical scholar and director of autopsy pathology at Baylor University Medical Center in Dallas says experts find a 40% misdiagnosis rate. Out of those 40%, about 10 to 12% are really serious – some resulting in avoidable death. We know this because autopsies reveal the real causes of death.

Dr. Mark Graber, Chief of medical services at the Long Island Veterans hospital, studies the issue of misdiagnosis and sees the problem partly stemming from overconfidence.

The problem is widespread outside of medicine. Confident experts, professionals and managers are quick to jump to the wrong conclusions. If we raise our price and see sales go down then we automatically conclude that the first led to the second. But we may well have misdiagnosed the problem. There may have been a completely different reason why sales declined – like competition or seasonal factors.

Einstein is reputed to have said, ‘If I had one hour to save the world, I would spend 55 minutes analysing the problem and 5 minutes coming up with a solution.’ We tend to do the opposite. We assume we know the cause and then charge ahead designing remedies for the wrong issue. We need to find the root cause of the problem before even starting to think about possible solutions.

Air travel has dramatically improved its safety record over the last 50 years (much more so than hospitals say). The main reason is that after every plane crash there is a thorough investigation by experts to determine the exact cause of the crash. The findings and recommendations for improvement are then shared worldwide.

Most people in middle to senior positions in organisations are charged with solving problems. Yet they are generally not trained in problem analysis techniques. Consequently they often fall prey to making assumptions, jumping to conclusions and applying the wrong remedies.  Innovators need to comprehensively understand the problem they are trying to solve with their innovation.

I teach problem analysis methods and the ones I find most helpful are Why, Why? Six Serving Men, Fishbone Diagram and the Lotus Blossom technique. They and more are covered in detail in this online training course.

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GUEST POST from Paul Sloane

Find the Root Cause

In August 1854, there was a deadly outbreak of cholera in the Soho district of central London. Cholera leads to diarrhoea, vomiting, dehydration, and in many cases to death. Thousands of people fell ill and over 600 died.

At that time, medical authorities believed that cholera was caused by ‘miasma’ – a type of ‘bad air’ possibly from decaying bodies. But a local doctor, John Snow, was sceptical of this theory. He thought it more likely that cholera was spread through contaminated water supplies. He carefully investigated the outbreak and plotted all the instances of death from cholera on a map of the area. He spoke to many people who had suffered the disease and found that they had all drawn water from the same hand pump on Broad Street. He wrote:

“Within 250 yards of the spot where Cambridge Street joins Broad Street there were upwards of 500 fatal attacks of cholera in 10 days… As soon as I became acquainted with the situation and extent of this irruption of cholera, I suspected some contamination of the water of the much-frequented street-pump in Broad Street.”

Remove the Pump Handle

Snow showed his research to the local authorities and persuaded them to remove the handle from the pump to make it inoperative. New cases of cholera stopped. He had cut off the problem at the source. It was later found that the pump drew water from a well which had been contaminated by a nearby cesspool. His direct action saved many lives – not just in London but around the world as his theory for the spread of cholera was gradually accepted by medical bodies and town councils.

It is an early example of root cause analysis. There are three key actions in the process:

1. Determine the root cause of the problem by asking many basic questions.
2. Take immediate action to fix the root cause.
3. Check to see where else in the system similar problems might occur and fix them too.

Innovation Impediments

I worked with an organisation which wanted to improve innovation. The top leaders were dissatisfied with the level of creativity, agility and innovation in the business. They had tried offering rewards for good ideas, installing sofas and ping-pong tables; they had even set up an innovation incubator unit. But things had not improved. They had been treating the symptoms of the problem rather than the root cause. We carried out an audit to find out what was really impeding innovation. We found that the root cause was a risk averse culture which was deeply embedded. The leaders were unwittingly sending out signals that success is what matters and that failure is disdained. People were not motivated to carry out experiments or to propose initiatives because the implicit message was that they might fail and be blamed. We implemented a series of actions to change the culture. It took time, effort and constant reinforcement.

Whatever the problem you are facing, try to resist the temptation to just treat the symptoms. Use some problem analysis methods to determine the fundamental cause or causes of the issue. Fix the root cause and then check to see if that has fixed the problem. Then take the learnings throughout the organisation. You have to remove the pump handle!

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GUEST POST from Paul Sloane

If you are running an organization of any kind then making it more efficient is a key priority.  It is important to speed up processes, eliminate waste, improve quality, reduce costs and generally please customers.  And if you work hard at it you can do all of these things.  But it is also important to prioritise innovation – finding new products and services and new ways to do things.  The trouble is that if you focus too hard on efficiency then you can easily neglect innovation.

Sorting out today’s operational wrinkles has an immediate payback but experimenting with new products and methods takes time and effort. It has an uncertain future payback.  So we tend to spend most of our time solving today’s efficiency issues.  The temptation is always to work on improving current products and systems rather than finding new ones.  After all, we know that the current process works so if we can make it work better we will get better outcomes.  We can have no similar certainty about the results of innovation efforts.  Also innovation involves trying things that don’t work.  That looks wasteful – and we all hate waste.

So here are eight reasons why you should prioritise innovation over efficiency.

1. Survival.   It did not matter how much Encyclopaedia Britannica improved quality and efficiency.  Wikipedia was still going to kill it.  If you are running a taxi firm then tinkering with operations might help in the short term but it will not protect you from Uber.  Ultimately innovation wins.  It beats quality and it beats efficiency.  Newer systems start off shakily but in the end they come out on top – not all of them but some.  So sitting back and making the current business work better and better is like making better gaslights  – even when you have already heard about new-fangled electric ones.
2.  Competitive Advantage.  Extinction or survival is a drastic and extreme example of the power of competitive advantage.  Innovative products and services give companies an edge.  Older products and services become routine amd eventually commodities.  Novel products can command higher prices – until everyone else catches up.
3. Your People.  Some people like to do the same kind of work every day but the most talented people generally relish new challenges.  They like to express their creative ideas and experiment with them.  It is easier to attract and retain top talent if you empower people to innovate.  Google and Apple have no problems recruiting the top graduates – people queue up to work there.
4. Satisfaction.  Finding a new way to do things; solving the related problems, making it work; these are all intellectually satisfying.   We know that trying something new which does not work is frustrating (but educational).  Finding and successfully delivering an entirely new thing is very rewarding.  It just makes you feel good.
5. Fun. Doing the same old stuff and fixing the same old problems becomes routine.  Experimenting is difficult but it can be fun.  The innovative leader makes innovation a game to be enjoyed.
6. Fame and Respect.  People revere innovative companies.  They remember great inventors and innovators – Thomas Edison, Steve Jobs, Elon Musk, James Dyson.  They do not remember all the faithful executives who toiled long and hard to make their companies more efficient.
7. Learning.  Innovation means trials, experiments, pilots with minimum viable products and prototypes.  You show them to customers and gauge reactions.  It is a learning process.  All the experiments that do not work are educational.  You have to be out in the marketplace trying to solve real problems.  You learn more there than back in the office.
8. Leadership vs Management.  A manager is a steward who makes the organization work better.  A leader changes the organization and moves it to a different place.  Innovation and leadership live in the same house.  We need good managers – for sure.  But we also need good leaders.  If you want to be a leader you have to lead people somewhere new; you have to lead innovation.

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GUEST POST from Paul Sloane

We value knowledge and certainty, and disdain ignorance and doubt. Ignorant is an adjective of derision. Perhaps we over-value knowledge and underestimate the power of ignorance; or should I say the awareness of ignorance. Why is this? Because knowledge can breed certainty, hubris and closed minds. We need to be open-minded and even doubtful about our knowledge because what was true yesterday may no longer be true today.

In the Middle Ages the authority of the Church and the Bible were unchallenged. There was a certainty in the order of things and the reason for things. The revolutions of the Reformation and Renaissance came about when doubts became manifest. The scientific revolution was based on the realization that we were profoundly ignorant about how the universe really worked. Indeed, the scientific method is based on challenging knowledge. Every scientific principle is a theory which can be questioned. Newton’s Laws and the consequent view of the Universe were the bedrock of mechanics and physics for centuries until challenged and updated by Einstein’s theory of relativity.

We seem to prefer political leaders who are sure of themselves and their policies. Any political leader who expressed doubts about themselves or their plans would be derided as wishy-washy. The author John Adair, says that the most important sentence for a leader to say is, ’I admit that I was wrong.’ But on the rare occasions when political leaders change their minds they are accused of flip-flopping, of doing a ‘U-turn’ or of lacking conviction. But there is no value in having convictions if they are for wrong-headed ideas. Joseph Stalin and Robert Mugabe just kept pressing on with the wrong precepts. Their obstinate and single-minded approaches impoverished their peoples. We need leaders who are open to doubts, receptive to new evidence and prepared to change direction.

Mikhail Gorbachev was a dedicated Communist party officer who rose to be leader of the USSR. He saw the many problems of the Russian system and changed his mind, introducing the radical policies of Perestroika and Glasnost. This led to independence for the former Soviet satellite states and the fall of the Berlin Wall.

F. W. De Klerk was the last President of Apartheid South Africa. He had been a strong advocate of apartheid but changed his view and took the courageous decision to release Nelson Mandela and start the transition to a multi-racial society.

We all suffer from confirmation bias, the tendency to search for, recall and prefer information that confirms our pre-existing beliefs. The effect is stronger for emotionally charged issues and for deeply held positions. It leads us to interpret ambiguous evidence as supporting our beliefs. For example, when a mass shooting occurs in the USA proponents of gun control see it as proof of the need for restrictions on gun ownership whereas opponents of gun control see the same incident as evidence for the need for more people to carry guns so as to quickly shoot the assailant. Similarly, when there is savage snowstorm some people see it as clear evidence of climate change and others as proof that global warming is a myth.

Confirmation bias leads to overconfidence in personal beliefs despite contrary evidence. In 1992 Rachel Nickell was brutally murdered on Wimbledon Common in London. The police brought in an expert who constructed a psychological profile of the killer. The police found a suspect, Colin Stagg, who walked his dog on the Common and who fitted the profile. There was very little evidence that he had had anything to do with the crime but the police became convinced that he was the murderer and they laid an elaborate ‘honey pot’ plan to encourage him to confess. This did not work but they brought him to trial where the judge threw the case out. Eventually in 2008, Robert Knapper was convicted of the killing of Rachel Nickell. It is clear that once the police officers became convinced that Stagg was guilty, they rejected contrary evidence and confirmation bias set in. They redoubled their efforts to build a case against him.

Knowledge is a good thing but we have to recognise that our knowledge is partial, it is constrained by our point of view and our internal biases. Leaders are at their most dangerous when they are certain in their knowledge that they are right. The world is moving fast and some of our beliefs might be outdated or just plain wrong. We need to acknowledge our ignorance, listen to contrarian views and ponder our doubts.

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