GUEST POST from Paul Sloane

One of the most common barriers to innovation is lack of time. People are just too busy doing their day job to spend time trying new things. The common assumption is that working hard and working long hours are good things and sufficient for success. The mantra is “focus on delivering this quarter’s results.” But doing more of the same is not enough – we have to try the new.

It is as though we are so busy building rafts to cross the river that we never look up to consider building a bridge, or a tunnel or a dam or fording the river or building boats or planes or all the other things we could do. We just focus on producing those rafts.

If you want people to be creative, then set the goal (e.g. crossing the river) and then challenge them to come up with ideas. Give them time and some resources to test their ideas – to build prototypes, or to investigate what people elsewhere are doing.

Google allows its people to spend one day a week on innovative ideas. Is this a wasteful luxury? No. It has led to remarkable innovations such as Google Earth, Froogle and Gmail. Genentech has a similar provision for its people. Most organizations could not afford to give up as much time as Google or Genentech but the same principle still applies – you have to create some slack time in which people can experiment. You do not get innovation for free – you have to allocate time, money and people.

For many years 3M has allowed its scientists and engineers to spend up to 15% of their time on any project that interests them. They do not have to ask their manager’s permission but they do have to keep them informed of what it is they are doing. This permission to be free has resulted in countless ideas and innovations for 3M which is regularly rated as one of the most innovative companies.

The message is clear. The leader has to free time for innovation in order to empower people to come with great ideas and to explore them. Whether it is one day a week or one day a quarter, time for innovation is critical.

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GUEST POST from Paul Sloane

Why does Roger Federer serve double faults? Every double fault is a failure – it gives a precious point to his opponent. He could easily cut out all double faults by slowing down his second serve to ensure that it lands safely in the service box. Yet in most long matches Federer, like most other top players, will serve at least 3 double faults.

Clearly the tennis champion has made a careful calculation of the trade-off between being bold or cautious on his second serve. He knows that if he makes his serves safe he will make the returns easier for his opponent. He wants to win a high percentage of points on his serve and use it as an attacking tactic. He is quite prepared to lose some points as double faults if it means that most of the time his serves are difficult to return. There is an optimum number of double faults that a tennis player should serve in a match and the number is not zero.

The same principle applies to us in our enterprises. Caution can be an enemy of success. If every new thing that we try works it almost certainly means that we are not being bold enough. We should take some courageous initiatives. We should sometimes fail. We should serve some double faults.

What innovations have you tried in the last three months? Make a list. How many succeeded and how many failed? For those that failed, why did they fail? What lessons can you learn? Obviously you aim for success and you want to win. But there will be failures on the road to success. If you cut out the possibility of failure then you limit your chances of success.

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GUEST POST from Paul Sloane

Every time that we approach a problem, in any walk of life, we bring to bear assumptions that limit our ability to conceive fresh solutions. Brilliant thinkers are always aware of assumptions and are always happy to confront them.

There is a story told about a northern pike, a large carnivorous freshwater fish. A pike was put into an aquarium, which had a glass partition dividing it. In the other half from the pike there were many small fish. The pike tried repeatedly to eat the fish but each time hit the glass partition. The partition was eventually removed but the pike did not attack the little fish. It had learned that trying to eat the little fish was futile and painful so it stopped trying. We often suffer from this “Pike Syndrome” where an early experience conditions us into wrong assumptions about similar but different situations.

The way that we see things is often circumscribed by our assumptions. In the middle ages, the definition of astronomy was “the study of how the heavenly bodies move around the Earth.” The implicit belief was that the Earth was at center of the universe. In 1510 a brilliant Polish astronomer, Nicolai Copernicus, postulated the idea that the sun was the center of the solar system and that all the planets revolved around the sun. He was able to explain the motions of the planets in a way that made sense but was totally at odds with convention.

The atom was originally defined as the smallest indivisible unit of matter. The assumption was that an atom could never be subdivided. This belief hampered the advancement of science until eventually J.J. Thomson discovered the existence of a sub-atomic particle, the electron, in 1887.

In business we make all sorts of assumptions. For example, you might hear people say:

• Competition sets the price level in our industry
• We must constantly raise our quality and service delivery
• Our largest customers are our most important customers
• We should hire people who fit in well with our team
• Each of these notions needs to be challenged.

Often it is up to a newcomer to an industry to break the existing orthodoxies. For example:

• Henry Ford challenged the assumption that automobiles were expensive, hand-built carriages for the wealthy.
• Anita Roddick challenged the assumption that cosmetics had to be in expensive bottles. Her retail chain, the Body Shop, sold products in plastic containers.
• IKEA challenged assumptions by allowing customers to collect their furniture from the warehouse.
• The low-cost airlines like Southwest and Easyjet challenged the assumptions that you needed to issue tickets, allocate seats and sell through travel agents.
• Apple challenged the assumption that a personal computer was functional and not aesthetic.

Brilliant thinkers know that assumptions are there to be challenged and they relish defying them. How can you do this? Here are some tips:

• Start by recognizing that you and everyone else have ingrained assumptions about every situation.
• Ask plenty of basic questions in order to discover and challenge those assumptions.
• Write a list of all the ground rules and assumptions that apply in your environment and then go through the list and ask, “What would happen if we deliberately broke this rule?” and “What if we did the opposite of the norm?”
• Pretend you are a complete outsider and ask questions like, “Why do we do it this way at all?”
• Reduce a situation to its simplest components in order to take it out of your environment.
• Restate a problem in completely different terms.

Ken Olsen was CEO of DEC, a company that was a great innovator in the days of the mini-computer (during the pre-PC era). He said:

“The best assumption to have is that any commonly held belief is wrong.”

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GUEST POST from Paul Sloane

How hard is it to innovate? Not once but over and over? How can you repeatedly implement great new products, processes or services? Continuous innovation is not easy and if you keep using the same method you will experience diminishing results. Try innovating how you innovate by employing some of these ideas.

1. Copy someone else’s idea. One of the best ways to innovate is to pinch an idea that works elsewhere and apply it in your business. Henry Ford saw the production line working in a meat packing plant and then applied to the automobile industry thereby dramatically reducing assembly times and costs.
2. Ask customers. If you simply ask your customers how you could improve your product or service they will give you plenty of ideas for incremental innovations. Typically they will ask for new features or that you make your product cheaper, faster, easier to use, available in different styles and colours etc. Listen to these requests carefully and choose the ones that will really pay back.
3. Observe customers. Do not just ask them, watch them. Try to see how customers use your products. Do they use them in new ways? This was what Levi Strauss saw when they found that customers ripped the jeans – so they brought a line of pre-ripped jeans. Heinz noticed that people stored their sauce jars upside down so they designed an upside down bottle.
4. Use difficulties and complaints. If customers have difficulties with any aspect of using your product or if they register complaints then you have a strong starting point for innovations. Make your product easier to use, eliminate the current inconveniences and introduce improvements that overcome the complaints.
5. Combine. Combine your product with something else to make something new. It works at all levels. Think of a suitcase with wheels, or a mobile phone with a camera or a flight with a massage.
6. Eliminate. What could you take out of your product or service to make it better? Dell eliminated the computer store, Amazon eliminated the bookstore, the Sony Walkman eliminated speakers and record functions.
7. Ask your staff. Challenge the people who work in the business to find new and better ways to do things and new and better ways to please customers. They are close to the action and can see opportunities for innovation. Often they just need encouragement to bring forward great ideas.
8. Plan. Include targets for new products and services in your business plan. Put it onto the balanced scorecard. Write innovation into everyone’s objectives. Measure it and it will happen.
9. Run brainstorms. Have regular brainstorm meetings where you generate a large quantity of new product ideas. Use diverse groups from different areas of the business and include a provocative outsider e.g. a customer or supplier.
10. Examine patents. Check through patents that apply in your field. Are there some that you could license? Are some expiring so that you can now use that method? Is there a different way of achieving the essential idea in a patent?
11. Collaborate. Work with another company who can take you to places you can’t go. Choose a partner with a similar philosophy but different skills. That is what Mercedes did with Swatch when they came up with the Smart car.
12. Minimize or maximize. Take something that is standard in the industry and minimise or maximise it. Ryanair minimized price and customer service. Starbucks maximised price and customer experience. It is better to be different than to be better.
13. Run a contest. Ask members of the public to suggest great new product ideas. Offer a prize. Give people a clear focussed goal and they will surprise you with novel ideas. Good for innovation and PR.
14. Ask – what if? Do some lateral thinking by asking what if…? Challenge every boundary and assumption that applies in your field. You and your group will come up with amazing ideas once the normal constraints are lifted.
15. Watch the competition. Do not slavishly follow the competition but watch them intelligently. The small guys are often the most innovative so see if you can adapt or license one of their ideas – or even buy the company!
16. Outsource. Subcontract your new product development challenge to a design company, a University, a start-up or a crowdsourcing site like Innocentive or NineSigma.
17. Use open innovation. Big consumer products companies like Procter and Gamble or Reckitt Benckiser encourage developers to bring novel products to them. They are flexible on IP protection and give a clear focus on what they are looking for. A large proportion of their new products now start life outside the company.
18. Adapt a product to a new use. Find an entirely different application for an existing product. De Beers produced industrial diamonds but found a new use for diamonds when they introduced the concept of engagement rings. It opened up a large new market for them.
19. Try Triz. Triz is a systematic method for solving problems. It can be applied in many fields but is particularly useful in engineering and product design. Triz gives you a toolbox of methods to solve contradictions e.g. how can we make this product run faster but with less power?
20. Go back in time. Look back at methods and services that were used in your sector years ago but have now fallen out of use. Can you bring one back in a new updated form? It has been said that Speed Dating is really a relaunch of a Victorian dance format where ladies had cards marked with appointments.
21. Use social networks. Follow trends and ask questions on groups like Twitter or Facebook. Ask what people want to see in future products or what the big new idea will be. Many early adopters are active on social network groups and will happily respond with suggestions.

The ways to innovate are legion. Try some approaches that are new to you in order to boost your innovation capability.

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GUEST POST from Paul Sloane

In looking for improvements and innovations we tend to focus our attention on what went wrong. We try to fix problems. A typical management meeting consists of a group of people who are looking at what is not working and trying their hardest to come up with ways to put things right. But in the process they are often allocating blame, arguing, becoming negative and getting frustrated.

Most managers ask these kinds of questions:

• Why are sales down?
• What is holding up production?
• What can we do about customer complaints?
• What can I do about difficult staff?
• What is wrong with the current process?
• Where can we speed things up?
• How can we stop all these problems?

These are good questions and the problems have to be addressed. However, by focussing our attention on the negative we miss the innovation opportunities presented by the positive. We should also spend some time asking questions like these:

• What are our key strengths?
• What do customers like about us?
• What is going well?
• What unexpectedly good things have happened here recently?
• What new customers have we won?
• In what ways have we delighted customers?
• What is it that only we can do?

How Cat roared into the branded items business

Caterpillar was a well-established leader in heavy earth-moving equipment. Then in 1996 they started selling a sideline, “Cat” branded work boots. These were
unexpectedly successful with young consumers who would never use or buy heavy Caterpillar machinery. By 2000 they were selling over 25 million pairs of boots. They have now branched out into other kinds of clothing and toys to exploit the Cat brand.

By focusing on our strengths and capabilities we can see positive opportunities. If we concentrate on fixing the current model then we can easily miss new possibilities. All our energies are going into alleviating problems and weaknesses – this denies us the chance to create new initiatives.

It is the same with people. When we are toddlers everyone praises us and tells us how wonderful all the things we do are. Then as we go through the school process things change and the emphasis switches, the errors in our work are pointed out and teachers tell us all the things we could better. This is well meant but the impact on fragile egos can be severe.

When we get to work we are at first acutely aware of our lack of experience and authority. At our annual appraisal we are told the things we need to focus on to improve. We plan training and coaching to improve our weak areas. Our strengths are taken for granted and development focuses on our weaknesses in order to make us “well rounded.”

But surely the key to success is to build on our strengths and to compensate for weaknesses. If we have a good voice but can’t dance then why try to become an all-rounder? Surely it is better to scrap the dancing lessons and put all our efforts into becoming a great singer.

In business we have to figure out what the true assets of the business are – what are our core strengths and abilities? What can we excel at? If we are great at marketing but lousy at administration then we should probably stop spending time and energy trying to get our administrative systems fixed. Outsource it to someone who is good at that and let’s concentrate on playing the game we are good at – marketing.

In addition to fixing what is wrong we should spend time examining what is right. Look for success stories, talk to delighted customers, ask them what makes us better than the others and then build on that. Find the right partners to compensate the areas where we are ordinary or weak and free up time to find creative new ways to exploit our strengths. We need to find unexpected and unusual things that we do really well because they can give us the competitive advantage we need. Let’s focus on what our organisation is really good at and build our success on that.

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GUEST POST from Paul Sloane

There are many different ways to lead. CEOs with markedly divergent styles can be successful in different ways. The same leader will often adopt different styles in different circumstances. There is no one correct way to lead or manage. Ultimately the right way is the one that works for you and for the organization in delivering the goals you set out to achieve.

Let’s contrast two extremes of leadership style that I have designated as the command and control leader and the innovative leader. The command and control leader is goal-oriented, authoritative and decisive. He or she is well suited to a structured regime with clear tasks. The innovative leader, on the other hand, is better suited to an ambiguous or fluid situation. He or she is much more focused on creativity, innovation and helping the team to find new ways forward.

It may appear that I am painting one of these characters as a saint and the other as a sinner but it is more complex than that; each has a role to play. There are times when you need take command and there are times when you need to empower. But you cannot micro-manage everything in a large organization – especially in turbulent conditions. You must inspire and delegate.

The command-and-control leader’s approach is fine for improving operational efficiency in a well-defined environment. However, in today’s fast moving, complex situations, we need to supplement conventional approaches with more of the skills of the innovative leader.

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GUEST POST from Paul Sloane

The most innovative leaders have a mindset like that of a venture capitalist. They take a portfolio view of innovation projects. The venture capitalist will invest in a basket of different start-up companies, fully knowing that most will fail. A few might break even and one or two might be successes. But one big success can pay back the costs of all the failures. Even though he is smart, the VC does not know at the outset which ventures will succeed and which will fail so initially he backs them all. As time goes on he cuts funding for the failures and gives more to the winners.

It is the same with prototypes in business. The leading innovators run many different pilots and measure progress carefully. They chop the losers but pour more resource into the successful trials. That way they are first to market with the real winners.

VCs use a portfolio approach so that they balance the risk of losers with the upsides of winners. They are comfortable with the knowledge that many of the ideas they back will fail. They are also comfortable with quantity. They receive hundreds or thousands of business proposals every year from all sorts of diverse sources. Many of these have already been rejected by several other VCs but that does not matter.

The VC sets his own criteria and selects several ideas to support and put into his portfolio. If the business plan then misses its targets or milestones or the customer reaction is poor or the technology fails to deliver then the VC is sanguine about pulling the plug on this investment. He wants to put more resources into the portfolio ideas that are working and he is quite relaxed about strangling the losers. If he can cut his losses and get out early he will.

Contrast this with a typical corporate environment where a small number of new business proposals are considered. A handful is eventually selected and then every effort is made to make them succeed. Failure is abhorred. Extra resources and efforts pour into the CEO’s pet project even when the market is screaming that this one won’t fly. Emotion and egos come to the fore.

Think like a VC and remember these key points:

• Quantity is good – we want lots of ideas
• If an idea has been rejected before, we are happy to consider it again
• We will select the most promising on objective criteria
• We want a return on our innovation portfolio as a whole
• We know that many of the more radical ideas will probably fail
• We will focus our resources on the winners and cut resources on the losers

Why not get a venture capitalist to speak at your next executive meeting?

If you enjoyed this post, check out Blogging Innovation’s book review of “Innovation Tournaments” and its interview of co-author Christian Terwiesch.

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GUEST POST from Paul Sloane

You cannot expect your team to be innovative if they do not know the direction in which they are headed. Innovation must have a purpose. It is up to the leader to set the course and give a bearing for the future. This is set in broad terms and is described as the mission, core purpose or vision for the organization. Although each of these is different, they share much in common and whichever you choose, there should be one overarching statement which defines the direction for the business and which people will readily understand and remember.

Jack Welch, CEO of GE said, “Good business leaders create a vision, articulate the vision, passionately own the vision, and relentlessly drive it to completion.”

As a leader you don’t want happy, comfortable people in your team. You want passionate, energetic people who are keen for the journey and ready to take on a challenge. Your job is to communicate a destination and to persuade them it is a target that they can believe in and a goal worth reaching. You can then ask them how best to reach the destination. Once you have established a vision that is inspiring you can ask people to be creative and innovative in moving towards it.

The vision or mission is the starting point for strategic plans, objectives and metrics. The key performance indicators of the business will measure how progress is made in meeting the goals that flow from the vision. Striving for the vision will always involve change. It is a journey from where we are today to a better future. There is a risk in making the changes necessary on this journey but the leader has to persuade people that there is a bigger risk in standing still. The organizations that have no vision for the future and no desire to change are the ones destined for obscurity and obsolescence.

You must paint a vision that is desirable, challenging and believable. If you can do this then there are three big gains for the organization:

1. People share a common goal and have a sense of embarking on a journey or adventure together. This means they are more willing to accept the changes, challenges and difficulties that any journey can entail.
2. It means that more responsibility can be delegated. Staff can be empowered and given more control over their work. Because they know the goal and direction in which they are headed, they can be trusted to steer their own raft and to figure out the best way of getting there.
3. People will be more creative and contribute more ideas if they know that there are unsolved challenges that lie ahead. They have bought into the adventure so they are more ready to find routes over and around the obstacles on the way.

Many mission statements are boring, long-winded, long on platitudes and short on inspiration. Here are some good ones:

• Lego – To nurture the child in each of us.
• Disney – To use our imagination to bring happiness to millions of people.
• Merck – We are in the business of preserving and improving human life.
• Tesco – To create value for customers to earn their lifetime loyalty.
• 3M – To be the most innovative enterprise in the world.
• WPP – To develop and manage talent; to apply that talent throughout the world for the benefit of clients; to do so in partnership; to do so for profit.
• GSK – To improve the quality of human life by enabling people to do more, feel better and live longer.

Just painting the picture is not enough. It quickly fades from view if it is not constantly reinforced. Great leaders spend time with their teams. They illustrate the vision, the goals and the challenges. They explain to people how their role is crucial in fulfilling the vision and meeting the challenges. They inspire men and women to become passionate entrepreneurs finding innovative routes to success.

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GUEST POST from Paul Sloane

People are naturally apprehensive about change. They fear the unknown. There is a reluctance to take risks. This can be particularly true in a successful enterprise. Success can be an enemy of innovation. Why mess with a model that works? There is little incentive to take risks and try new things. But even successful companies are at risk if they stand still. Polaroid Corporation was a leader in its field but digital camera technology dealt it a serious blow and pushed it into Chapter 11. Smith Corona was very successful making typewriters but the advent of word processors proved fatal.

Overcoming the fear of change is a key objective for innovative leaders. They will need to take this issue head-on. They must engage people in a dialogue and discuss the risks and benefits of standing still or of innovating. The types of messages they strive to convey are:

• We are doing well right now but we need to do better
• We must fight the risk of complacency
• If we don’t find new ways to reach and delight our customers then others will do it for us
• There is a risk in innovating but there is a bigger risk in standing still
• Change can be a big positive for us if we can drive it in the direction we want

Leaders must promote a dialogue where, in addition to telling these messages, they listen to people’s concerns and solicit their input. You can turn negative people around by asking for their views on how to make things better. When asked, they will often volunteer great ideas for how we can make the change a big success.

Here are some tools you can use in the battle to win the hearts and minds of your people:

• Stories about companies that focussed on what they did well and who missed the next big wave
• Examples of how we lost business to more innovative competitors
• Examples of how we won business by doing something new
• Praise for risk-takers and entrepreneurs within the business who have helped to drive change – successfully or unsuccessfully

Innovation involves taking risks, changing things that work and coping with failures. Many people find it an uncomfortable journey. It can be a very bumpy ride but the alternative is to stay in the same place and slowly wither.

Conclusion

Innovative leaders constantly evangelize the need for change. They replace the comfort of complacency with the hunger of ambition. We are doing well but we cannot rest on our laurels – we need to do even better. They explain that while trying new ventures is risky standing still is riskier. They must paint a picture that shows an appealing future that is worth taking risks to achieve. The prospect involves perils and opportunities. The only way we can get there is by embracing change.

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GUEST POST from Paul Sloane

The CEO of Black and Decker once said, “People don’t go into a DIY store because they need one of our drills. They go because they need a hole in the wall.” Wonderbra in their internal communications to staff say this, “We do not sell underwear. We do not sell lingerie. What we sell is self-confidence for women.” Harley Davidson does not sell motorbikes. It sells the concept of freedom to middle-aged men.

What is it that your business really sells? What is the true value that customers get from your products or services? When you know the answers to these questions you can start to conceive new ways to provide that value. It is the starting point for real innovation.

Many companies make the mistake of defining what they do in terms of their products or services rather than by the benefit that the client derives from those. Here are some examples:

• Companies that thought they were in the horse-drawn carriage business but were really in transportation were wiped out by automobiles
• Companies that thought they were in the ice supply business but were really in food and drink storage were eliminated by refrigerators
• Companies that made slide rules failed to realise they were in the technical calculation business and were made obsolete by graphics calculators
• Companies that thought they were in the CD business but were really in music were replaced by digital downloads
• Companies that thought they were in the typewriter business but were really in communications were put out of business by the word processor

What business are you in? Why do your customers buy the goods or services you provide? There are several ways to find out:

• Ask your customers
• Ask people who consider your product but do not buy it
• Observe your customers and see how they use your product.

And of course the answer may well be different for different customers. Some people choose a certain marque of car to make them look good, others to feel safe and others to enjoy the ride. Unless you know exactly why prospective customers will buy your product you are unable to properly market or sell. Worse still you will be blind to the alternatives, the opportunities and the threats which exist.

Change how you define your business from your product to your product’s benefits for the customer. So instead of saying, “We make typewriters,” say, “We help people communicate effectively.” Instead of saying, “We are an innovation management consultancy,” say, “We help clients develop new sources of revenue and profit.”

One definition of innovation in business is an action that extends customer value. So if we want to innovate we need to understand what it is that the customer really values. Then we can set our minds to the task of how to extend that value. Start every week by asking these questions:

What business are we in?

• What do customers really value?
• In what other ways could that value be delivered?
• These questions are always worth asking. The insights they lead to can be the source of potent innovation in your products and services.

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