GUEST POST from Paul Sloane

The innovative organization had an atmosphere of constructive dissent. Anyone can challenge anything.  The more sacred the cow, the more likely it is to be sacrificed.  The conventional leader of years gone by who ruled by command and control is unsuited to a fast moving entrepreneurial environment.  They may be decisive and dynamic but ultimately their reluctance to let go and to allow challenge will limit the motivation of people and the growth of the business.

What you need to encourage is not a lack of respect but a lack of deference.  In the modern innovative organization leaders need to earn the respect of their employees because of the values they stand for and not because of their position in the hierarchy.  A lack of deference should be encouraged so that anyone can challenge anyone else’s ideas regardless of their status.

‘Innovation comes from angry and driven people,’ says Tom Peters.  The innovator is not happy with his lot.  He is impatient for change.  And this can be a problem for successful companies.  The natural satisfaction that people derive from success can lead to complacency, which is the enemy of innovation.  This is why the innovative leader always engenders a healthy dissatisfaction with the status quo.  It is all very well telling shareholders that the company is making steady and satisfactory progress but the internal message needs more of an edge.  ‘We are doing well but there is much more to be done.  We cannot afford to rest on our laurels.’

Clayton Christensen, in his book the Innovator’s Dilemma, explains how the very characteristics that make successful companies successful lead them to eschew risky new ventures and keep improving their current products to meet customer demands.  In doing so they often miss the next big thing, the new technology that kills them.  Polaroid’s demise at the hands of digital photography is a salutary example.

In 1901 the radio pioneer, Guglielmo Marconi, came to England to test his theory that it was possible to send radio signals across the Atlantic.  The experts all scoffed at the idea – after all the earth is a giant sphere and radio waves travel in straight line.  The experts had reason and logic on their side but Marconi was unreasonable and insisted on pursuing his experiment.  Amazingly his signal was received.  Unknown to the experts (and to Marconi) there is a charged layer around the earth, the ionosphere, which reflected the signal.

Often the innovator has to be obsessive to the point of apparent irrationality in pursuit of their dream.  They have to be rebellious in opposing conventional wisdom.  Steve Jobs, James Dyson and Richard Branson were all seen as obstinate angry rebels before they achieved the success that changed their status to visionaries.

So if you want innovators in your team look for people who are passionate about their ideas, who do not defer to authority, who are dissatisfied with the status quo, who are impatient for change and who are angry about the obstacles put in their way.  With a profile like that they should certainly stand out from the crowd!

published first in the innovationleader.com; chamagazine.com

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GUEST POST from Paul Sloane

Innovation gives you a choice. You can either ride with the change and benefit or oppose the change and be run over.

A recent Reuters report describes how taxi drivers in Milan, Chicago and Paris are vigorously opposing the use of the Uber service – a mobile app that allows users to summon a chauffeured car. It bypasses one of the best established of closed shops. In places like Milan taxi permits are handed down from father to son or sold for six figure sums. The unions want to jealously guard their privileges but history tells us that they are fighting a lost cause. The Milan taxi drivers went on strike but Uber responded by reducing their prices on the strike days and they picked up plenty of business. The taxi unions would do better to develop their own mobile apps and try to beat Uber with a better service.

Transporting and selling ice was a big business which was destroyed by the invention of the refrigerator. Smith Corona made beautiful typewriters but word processors made typewriters obsolete. Encyclopedia Britannia made excellent encyclopedias but Wikipedia killed that business. Kodak were leaders in photographic film but consumers now prefer Instagram to prints. Warner Brothers and EMI were destroyed by music downloads and iTunes. The internet has accelerated the opportunities for innovation and we continue to see that innovation leads to winners and losers.

What should you do if you see new technologies, innovations and business models that threaten your business? Develop a plan. Buy one of the start-ups. Build your own prototype. Fight fire with a better fire. Don’t try to pull up the drawbridge and defend your castle. It is already too late.

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GUEST POST from Paul Sloane

Eastman Kodak Corporation, commonly known as Kodak, was founded by George Eastman in 1888.  It was a leader and innovator in cameras and film.  By 1976 Kodak held 90% of film sales and 85% of camera sales in the U.S., according to a 2005 case study for Harvard Business School. Unfortunately this dominant market position bred a culture of complacency. The move to digital camera technology had a devastating effect on Kodak’s sales and in January 2012 the company filed for Chapter 11 bankruptcy protection.

Ironically Kodak had developed the first digital camera as early as 1975 but shelved the project for fear that it would damage their film business. Steve Sasson, the Kodak engineer who invented the first digital camera in 1975, described the executive reaction to his invention as, ‘that’s cute—but don’t tell anyone about it.’

By the early 1990s it was clear that digital technologies would be critical and Kodak made various efforts in the market including introducing a line of Kodak digital cameras.  But there were internal disagreements between the digital camera division which was loss-making and the photographic film division which was highly profitable. Executives at Kodak clung to their belief that people would continue to want to print their pictures.  Sony and Canon all saw the challenge ahead and changed course with their digital cameras.  Fujifilm diversified more successfully. It launched a line of cosmetics, Astalift, in Asia and Europe. Fujifilm also found new markets its film technologies including making optical films for LCD flat-panel screens where it has become a leader in key sectors.

Kodak entered the digital game too late and with little enthusiasm. Its attempts at diversification and acquisition were poor. In 2013 Kodak emerged from bankruptcy, having sold many businesses. It now provides packaging, printing and professional services.  It now has some 13,000 employees and made a net loss of $1.3B in 2012.

At its zenith, when people shared their memories on printed photos, Kodak employed more than 140,000 people and had a market value $28 billion. It was defeated when consumers shared images on the internet with new players like Instagram. When Instagram was sold to Facebook for $1 billion in 2012 it employed only 13 people.  Scale is no protection in today’s world of rapid innovation.  Indeed it may be a hindrance as it impedes agility.

Nokia began as a wood pulp mill in Finland in 1865.  It has reinvented itself many times.  It made paper products and then rubber products including bicycle tires and wellington boots.  It made electrical cables, then consumer electronic products including televisions.  It entered the digital mobile phone market and became world leader in this fast-growing field.  Between 1998 and 2012 Nokia was the world’s largest supplier of mobile phones.  However, the company’s market share decreased dramatically following the introduction of touch screen phones from Apple and Samsung.  The change was swift but the Nokia executive team saw the danger.  CEO Stephen Elop famously declared in 2011 that they were on a ‘burning platform.’  In 2013 Nokia sold its mobile phone business to Microsoft and 32,000 employees including Elop joined the Windows giant.

What is left of Nokia has 56,000 employees in three divisions.  The largest is Nokia Solutions and Networks (NSN) which provides hardware, software and services to telecoms operators.  The second business area is called HERE and sells map technology for automobile navigation systems. The third business licenses the thousands of patents and inventions that Nokia owns. At the same time Nokia has been an ardent supporter of start-ups with some 1000 new companies fostered by Nokia, often founded by ex-employees of the company.

The lessons from the declines of these giants are many.  Size and market dominance are no defence against technology innovation.  Companies which see a serious threat must react early and decisively. Half-hearted attempts with me-too products are just not enough.  Companies that have been through the pain of reinvention before are better equipped to do it again. The key questions for business leaders are,

‘What business are we in?’

‘What key skills and technologies do we have and where else can we deploy them?’

‘What is our survival strategy?’

‘What businesses or technologies do we need to acquire?’

‘What do we need to stop doing?’

Perhaps if Kodak had realised it was in the memories business and not the film business it could have founded an Instagram, a Facebook or a Pinterest. That would have been an extraordinary leap but sometimes that is what is required.

zagg.com

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GUEST POST from Paul Sloane

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GUEST POST from Paul Sloane

A good way to start a brainstorm is to deliberately look for wrong answers. Set the challenge and then ask people to think of crazy ideas which are just plain wrong. Then take some of the more outrageous wrong ideas and kick them around. People will be outside their comfort zone and they will approach the original challenge from a new perspective. Each crazy notion can be provocative and stimulating. What is more, each wrong answer is itself the right answer to a different question. Sometimes these different questions are more interesting than the original challenge.

Consider these examples:

1. Christopher Columbus set out to answer the question, ‘Can we sail west around the world to reach India?’ He got the wrong answer but found America.
2. Trevor Bayliss (pictured) invented the clockwork radio. It was the wrong answer to the question, ‘How can we make a better radio for our customers?’ It was the right answer for the question, ‘How can we make an ideal radio for poor people in the developing world?’
3. Art Fry at 3M got the wrong answer to the question, ‘How can we make a glue that sticks better?’ He got the right answer by suggesting that his invention could be used in Post-it notes.
4. Pfizer Corporation had a new drug on trial with men. It was designed to reduce blood pressure but Viagra proved to be the wrong answer for that question. It became a remarkable success as the right answer for a different question.
5. In the 1970s Sony Corporation under its chairman Akio Morita had a strong position in the cassette recorder business. They wanted to design new and better models. They started with two wrong ideas – a cassette recorder that could not record and one that had no speakers. Both were heretical notions for designers of cassette recorders but they resulted in the Sony Walkman. It was a personal music player which used tiny headphones. It could play music but not record it. It was major innovation and a huge commercial success.

When you look for the right answer you will often come up with bland and predictable ideas. So break with convention. Start by looking for the wrong answer and see where that leads.

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GUEST POST from Paul Sloane

Often we find in large organisations that the executive team is keen to improve innovation and at the same time, front-line staff are frustrated and keen to change things.  So why is change not happening?  Who is impeding innovation?  Middle managers get the blame.  They are seen as the blockers.

John Kotter in his book, Leading Change, identifies supervisors as one of the key obstacles to major change initiatives.  He points out that they do not actively oppose change but they offer passive resistance. They are so busy doing their job that they don’t have time to implement someone else’s fancy idea.  They wait for the change initiative to lose momentum.  They focus on making the current systems work.

James Gardner takes a similar view in this blog Middle Management won’t Innovate.  He argues that middle managers do not innovate but this is not because they are not innovative.  They do not innovate because the systems and their objectives are inimical to innovation.  If we want to overcome this problem then two approaches spring to mind:

1.  Change the supervisors’ objectives to include innovation, initiative and risk-taking.  Give them targets for trying new approaches and include it as a measure in their appraisals. One issue here is that these metrics are hard to measure objectively.  Another is that these guys often have too many objectives already.

or

2.  Bypass the middle ground. Empower front-line staff to try new things in their work and set up skunk works to operate under the corporate radar and develop new products and services without having to go through normal approval channels.  But provide an executive level sponsor to give them the political clout they will sometimes need.

The ideal approach is for innovation to be in everyone’s objectives and for every employee to feel somewhat of an entrepreneur making the whole organisation more agile. However, many companies would find this culture change very hard to achieve. So the second approach of bypassing the normal channels and empowering a smaller number of innovators is often a better way to kickstart innovation.

info.law.indiana.edu

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GUEST POST from Paul Sloane

When is a Cork Like a Baby?

Jorge Odon is an Argentinian car mechanic who has invented a simple device which could save millions of lives of mothers and babies. The story of his invention is remarkable and instructive.

It all started when he was shown a YouTube video of a trick to remove a cork from inside a bottle.  He won a bet by demonstrating the trick to a friend.  The secret is to insert a plastic bag into the bottle, inflate the bag around the cork and then pull it out (see the video).  Later that night he had a brainwave – he could use the same principle that extracted the cork from the bottle to extract a baby during a difficult childbirth.  He developed the idea and discussed it with people – most of whom thought he was crazy.  But he persisted.  He patented the concept and gained the support of a leading obstetrician in Buenos Aires, Dr Javier Schvartzman who helped him develop and improve a prototype device.   This gained the attention of the World Health Organisation whose chief co-ordinator for maternal health, Dr Mario Merialdi, was intrigued by the idea.

Over 5 million babies and over a quarter of a million mothers die in childbirth every year – mainly in the developing world.  Odon’s invention could potentially save many of these lives because it is inexpensive and relatively easy to use.  The product will be manufactured by Becton Dickinson and will be available at low cost in developing countries.

There are some helpful lessons for innovators in this story:

a) Take a different view.  We tend to think of childbirth as something biological or medical. But if we view it as a mechanical process then it is natural that a mechanical device can be used for improvement.

b) Spot a weird connection.  Odon watched a video of a cork in a bottle and saw an analogy with a baby in the birth canal.  A solution in one field can be applied in another if the connection can be found.

c) Outsiders can find radical solutions.  Odon knew nothing about obstetrics but this turned out to be an advantage.  He thought like a mechanical engineer not a doctor.

d) A radical idea initially looks absurd and needs support.  Putting a plastic bag around a baby in the birth canal sounded ridiculous at first so the open-minded support of Shvatzmann and Merialdi was crucial to the survival and development of the idea.

Jorge Odon is now celebrated for his invention.  He said “I woke up one night with this idea, it almost felt magical. What I cannot understand is how I came up with a solution to help babies be born. I’m moved by the potential of this invention and I’m especially grateful to the doctors who first believed in me.”

More details are given in this BBC report.

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GUEST POST from Paul Sloane

Apparently Socrates in ancient Greece was strongly opposed to the new practice of writing. He thought that it would kill the long-established skill of memorizing and reciting long stories. Furthermore he thought that writing would replace or discourage conversation. It seems ludicrous that any intellectual could oppose writing. However, every innovation involves an element of destruction. Often that destruction is of a popular practice or method. But in general, the net effect of innovation is to grow the whole sector. In the case of writing it dramatically improved the field of communication. For sure recitation diminished (though it survived) but writing transformed mankind’s ability to store and transfer knowledge.

Similarly I am sure that the highly skilled monks who transcribed and decorated the hand-written bibles of medieval times must have been dismayed when Gutenberg’s printing press enabled the relatively fast and efficient production of bibles. The publishers of sheet music thought that Edison’s phonograph was a terrible invention because they thought it would kill the performance of music in homes (and thus the sales of sheet music). Television was feared by Hollywood as something that would kill the cinema. The paranoia was repeated with the advent of the video cassette recorder. But cinema survived, adapted and flourished.

We are seeing many similar instances with the internet. Newspapers are threatened by on-line news services, websites and blogs. But the forecasts of the death of newspapers are premature. Many are adapting and enduring.

The music industry has suffered declining sales for years as downloads and sites like Spotify have replaced sales of vinyl records and CDs. But the digital downloads do generate revenues and in 2012 sales of recorded music in all forms showed their first increase in a decade. And even the modest vinyl record is seeing a revival. Innovations kill practices that cannot adapt but others adjust and survive. Ultimately innovation opens up many new opportunities and expands the category.

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GUEST POST from Paul Sloane

In 1984 a young manager called Zhang Ruimin took control of a loss-making fridge factory in Qingdao, China. He was appalled at the low standards of workmanship and quality in its products.  In a dramatic expression of his wrath he gave out sledgehammers and asked factory workers to join him in smashing 76 faulty fridges in front of a large group of shocked employees.  The message was clear – poor quality was no longer acceptable.

Since then Zhang has focused on quality, innovation and branding in order to build the company, Haier, into the largest appliance maker in the world with a turnover of over $26B.  One of elements of Haier’s success was learning from customers. Zhang regularly sent engineers into the marketplace to see how customers were using their products. The insights gained spurred innovation. For example engineers learnt that in rural China some people were using Haier washing machines to wash vegetables (in particular sweet potatoes).  What did Zhang do? He told his development team to design a new cold water washing cycle specifically for vegetables.  Engineers in the USA reported back that they had seen a student with two small Haier fridges set apart with a plank of wood on them that the lad had used as a desk.  Haier brought out a line of fridges with a pull-out desk top.   Another customer–led innovation was a freezer with a slightly less cold compartment designed to keep ice cream soft.  Haier is the only Chinese company in the World’s top ten most innovative companies listing by the Boston Consulting Group.

Zhang Ruimin is recognized in China and worldwide as a great entrepreneur and innovator. Now in his 60s he is a teetotaler who rarely takes time off and works most days in the business.  His latest disruptive innovation is to jettison the company’s entire middle management layer.  Instead of working in separate departments, like most large corporations, Haier’s 80,000 employees now work in some 2000 fluid teams. Any employee can propose an idea and if it is voted a winner then that person becomes the team leader.  The team manages itself and is responsible for the profit or loss of the project.  The revolutionary idea of self-organising teams has been tried successfully elsewhere by companies such as W L Gore and Oticon but it is still seen as radical – particularly in China.  Zhang told the Economist he wants, ‘a free market in talent so the cream rises.’

When asked how he intends to strike a balance between distributed teams and central control Zhang replied,’ we do not need a balance.  An unsteady and dynamic environment is the best way to keep everyone flexible.’  He adds, ‘previously employees waited to hear from the boss , now they listen to the customer.’[i]

[i] Haier and higher. The Economist Oct 12 2013, https://www.economist.com/node/21587792

management.fortune.cnn.com

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GUEST POST from Paul Sloane

It is easy to get into a rut at work. The longer you have been doing the job the greater the tendency to keep doing things the way you have always done them. That is easy and straightforward – and boring. In almost every job there are opportunities for creativity and innovation – sometimes they are small procedural improvements and sometimes they are big risky innovations. How can you put some imagination and creativity into your work?

Here are seven key steps:

1. Recognise that every product, every service, every method and every aspect of your job can be done differently and better. Think of the service of providing music to music fans. Once it was only in live performances. You had to go to a drafty hall, sit still and listen. Then we had vinyl records. Then tape cassettes followed by CDs. Now we can listen to music downloads on our cell phones as we walk in the park.  It is the same with industrial, office and business processes. Each gets replaced by something better. Approach every task with the attitude that the current method is temporary and that your job is to find a better way to do it.

2. Ask people. Ask customers what problems and issues they have with your products or services. Ask suppliers for ideas for cost savings and quality improvements. Ask colleagues in other departments what could be improved. People in other places have other viewpoints and can see problems, gaps and opportunities. Network outside of work with people in other fields and discuss their approaches to some of the topics that concern you.

3. Run regular brainstorms. A well-facilitated ideation session or brainstorm with a diverse team will generate plenty of great ideas for any business challenge. You should hold them often with your team (and a sprinkling of provocative outsiders) to tackle the issues that are crying out for fresh approaches. Start with a clear statement of the issue and some broad criteria for what a good solution might look like. Turn the brainstorms into action by implementing the best ideas.

4. Look far outside. How do other organizations in different fields tackle the sorts of challenges that you face?  What do they do in the entertainment industry, or in retail or in charities? What do businesses similar to yours but in Singapore, Holland or Shanghai do? Research them on the internet. Can you pinch some of their great ideas and apply them locally?

5. Discuss with your boss. Find out what his or her big issues are. What is the corporate strategy? Maybe you can contribute a few ideas of your own which will help your manager or the company at large. Talk about the challenges and your proposals and suggestions. Show that you are a positive contributor of ideas.

6. Build prototypes. Show people how the idea would work in practice with a mock-up or a prototype. Ask for their input and ideas. Make the idea real and you will get feedback. Test new product and service ideas with customers.

7. Change your attitude to failure. If everything you try works then you are not being bold enough.  Innovation involves trying some things that don’t work. Treat each failure as a learning opportunity. The innovator’s motto is, “I succeed or I learn but I never fail.”

Every CEO says the same thing, “We need more innovation here.” Yet everywhere we see people frightened to try new things. We tend to think that it is just the marketing or R&D departments that should be creative. The truth is that we desperately need creative thinking everywhere in our workplaces. It can start with you.

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