GUEST POST from Tim Kastelle

We’ve got a problem with our accelerators. Too often, we’re trying to accelerate ideas that aren’t ready for it, and the outcome is lower impact that than we hoped for. A couple of years ago, The Startup Genome Project released their first report on the factors that lead to success and failure. The leading cause of startup failure was premature scaling, defined as:

…spending money beyond the essentials on growing the business (e.g., hiring sales personnel, expensive marketing, perfecting the product, leasing offices, etc.) before nailing the product/market fit.

That definition comes from Nathan Furr, who goes on to say:

Oh yes, and by the way, premature scaling also kills innumerable new projects at existing businesses as well, so innovators everywhere, beware. In other words, they are doing things that seem to make sense, like investing to build the product, hiring good people to help them sell it, developing marketing materials, and essentially doing all the kinds of things that big companies with lots of resources do when they are executing on a known opportunity. But most startups are chasing an idea: the founders, no matter how much they believe in their idea, are operating on a guess about an unknown opportunity with a potentially unknown solution. All these unknowns mean we need to manage the process of coming to market differently and number #1 on the list is to avoid spending money scaling the business before you have really nailed what customers want and how to reach them.

This ties in with another piece of data from the Startup Genome Project report – that the successful startups pivot on average just under two times. This is part of nailing what customers want and how to reach them. Their results look like this:

This shows that your best chance of success come when you pivot about two times. You can go overboard with pivots though too, which leads to worse outcomes. If you scale prematurely, you end up with zero pivots, which also leads to worse outcomes. Here’s an idea that might help with this – Innovation Force: Innovation Force = Innovation Mass x Acceleration This has important implications for innovators:

• You can’t accelerate nothing. So, yes, you must move faster than you think you can. The Innovation Mass in our Innovation Force equation comes from finding Product-Market Fit. If you don’t have this, it doesn’t matter how fast you move – you won’t have the impact you seek.
• This is important in established firms too. Greg Satell points out that established firms have a lot of built-in advantages over startups, which they shouldn’t give away by trying to act like startups. This is absolutely true. However, one area in which they should try to act like startups is building business model innovation capability. Just as most startups fail, most new product launches from established firm also fail. For Horizon 2 and Horizon 3 innovations (growth-creating ones), Steve Blank shows how business model innovation and the three horizons model integrate:

The norm in corporations is to push every new idea through the business-as-usual business model. This reduces Innovation Force. We need Product-Market Fit just as much here, in order to have the desired impact.

This idea extends to regions as well. Unitus Seed Fund released an interesting report last year, which included an international survey of accelerators. Here is how they map it out:

It follows from this that what they’re calling co-working spaces, incubators, accelerators and hyper-accelerators should all have different programs of work, since they are working with ideas at differing stages of development, which in turn have differing needs. I visited GridAKL and BizDojo – Wellington last week in New Zealand, and they seem to be getting really good results while working across several of these stages. However, this is rare.

Based on my experience, there are two distinct stages in developing innovative ideas. The first is to find Product-Market Fit (this is getting up to IRL5 if you are using the Investment Readiness Levels). This is building Innovation Mass. The second stage is to build the rest of the business model (getting to IRL9), getting customers, getting funding, and starting to get some traction.

This is Acceleration. If you maximise both, then you will have the biggest possible Innovation Force – which is what drives successful impact for our new ideas. These two stages correspond to the Incubator and Accelerator stages in the Unitus model. This shows us how to maximise Innovation Force at an regional level. We need places and programs that help ideas get Product-Market Fit. The number of ideas getting to that level is the Innovation Mass for a region. Then we need places and programs that will help people accelerate these ideas – the Accelerators.

One part of this that Unitus didn’t look at is Corporate Accelerators, which also play a role here. Successful regions need all of this to be happening. However, many of them only focus on the Accelerator part because this is where the glory (and the money!) is – this is the most common mistake I’ve seen. Here is another diagram from Steve Blank illustrating the mix of programs needed, with Silicon Valley examples:

We all want our innovations to change the world. This requires Innovation Force. In turn, Innovation Force is the product of Innovation Mass (Product-Market Fit) and Acceleration (building growth with customers). To maximise Innovation Force, we need both Mass and Acceleration to be big, and this is true for startups, established firms, and regions.

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GUEST POST from Tim Kastelle

Our Job is to Invent the Future

The business environment is changing – that’s something we should have our heads around by now. How should we respond? I was on a panel at an event sponsored by the Queensland Branch of the American Chamber of Commerce in Australia discussing exactly this issue at the end of last month.

The title of the session was: The Business World is Changing: Adapt or Perish.

It was only after it finished that I realised that I forgot to make an important point – those aren’t the only two choices.

Here is how Jim Collins put it in How the Mighty Fall:

“In December 1983, the last U.S.-made Motorola car radio rolled off the manufacturing line and into Chairman Robert Galvin’s hands as a reminder. Not as a sentimental memento, but as a tangible admonition to continue to develop newer technologies in an ongoing process of creative self-renewal. Motorola’s history taught Galvin that it’s far better to create your own future, repeatedly, than to wait for external forces to dictate your choices.”

That’s the third choice – if we’re innovators, our job is to invent the future.

In other words, we can create the changes in the business environment ourselves, not just respond to them.

Oc course, Collins then goes on to describe how Motorola completely failed in this endeavour – inventing the future is never a certain thing.

What Should We Do?

If we’re going to invent the future, there are a few things that we need to do.

First, experiment. Mike Masnick makes this point in a recent post about Clay Shirky’s latest discussion of the news industry’s response to digital disruption:

“It turns out that running a successful media business is not an easy thing.

And, of course, the nature of innovation often involves a lot of experiments, many of which will fail before people find the things that do work. So while I hesitate to jump on the singular failure of Kushner’s OC Register efforts as signalling much more than a single failure (in the same way that Digital First Media’s troubles may only really be indicative of the unique issues that company faces), Shirky’s overall point is still an important one. While experimenting with new business models and new ideas are important in this ongoing effort to figure out what might work (and discovering first hand what doesn’t work), if you’re going to experiment, you have to experiment with an eye towards the future, rather than nostalgia for the past.”

People blame the internet and technology for a lot of things, like social isolation, which have clearly been around for a long time. As humans, most of our problems and most of our needs haven’t really changed that much over time.

The second thing to do is to focus on these core problems, needs and desires, not technology. There is no point in innovating simply to do something new. The whole idea is to create value – if we don’t do that, we’re not innovating.

In the case of newspapers, democracies need journalism to keep people informed, and to hold governments to account. These needs are essential parts of the system. But this doesn’t mean that we need physical newspapers to fulfil these needs.

If we focus on the needs, we might find a better way to achieve these goals. Figuring out how to do this will be messy. There will be experiments that work, and ones that don’t. Experimenting goes hand-in-hand with meeting needs.

The third skill we need is the ability to amplify weak signals. This is one of the issues that has come up in the discussion this week about Jill Lepore’s New Yorker article attacking the concept of disruptive innovation (more on this in my next post).

Peter Klein makes an important point on this:

… disruptive technology, in Christensen’s definition, must not only behind the cutting edge in some technical dimension, but also satisfy unmet consumer demands. The latter must be uncertain ex ante, otherwise the market leaders would also be developing the disruptive technology. Christensen advises incumbents to “disrupt themselves,” but this assumes they know which technologies will eventually be disruptive. Because they don’t, they must choose among several alternatives, including “do nothing” (i.e., try to exploit late-mover advantage).

The incumbent’s decision, contrary to Christensen’s reasoning, reflects entrepreneurial judgment, which may or may not be correct. There is no formula for managing disruptive technologies.”

This is also what makes the “adapt” choice in “adapt or perish” tricky – we often don’t know to which changes we must adapt. That’s why signal amplification is an important part of dealing with uncertainty.

So. Let’s sum up:

In a changing environment, our choices are create the future, adapt or perish. I prefer the first choice. If that is the one that we wish to follow, we are entering risky territory. But then, when things are changing, innovation might be the least risky option.

The skills we need to help cope with this risk are: experimenting, a focus on genuine human needs, and amplifying weak signals. These are all things that make it a little bit easier to find a way through – they are part of the entrepreneurial judgment that Klein talks about. They are part of inventing the future.

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GUEST POST from Tim Kastelle

The posts that caught my attention this week all connect to ideas that we can use to unlock innovation in our organisations.

First up: How GE Plans to Act Like a Startup and Crowdsource Breakthrough Ideas by Liz Stinson. Stinson talks to GE Chief Marketing Officer Beth Comstock about open innovation efforts at the firm. One of the big motivations for pursuing open innovation is that even if you are massive, like GE, you can only employ a tiny fraction of the smart people in your field. Open innovation strategies help you reach some of the rest of them:

By tapping into the bright minds outside its walls, the company believes it can improve the innovation that goes on inside them. ‘You pretty quickly start to understand, you can’t do it all,’ says Beth Comstock, GE’s senior vice president and CMO, who is heading up the company’s open innovation push. And it does make sense.

Today, you don’t need every expert in-house, nor is it always smart to hire a sole contractor. Rather, it’s totally possible, and often more efficient, to crowdsource for that knowledge. Liguori puts it this way: ‘For all of the smart engineers at GE, we sure don’t have a lock on all of the smart engineers in the world.’

Comstock believes that by marrying the insight of people outside your company with the smart people inside it, you’ll get to a solution faster than you otherwise would have.

Of course, not all big firms are attacking innovation like GE is. Hutch Carpenter talks about how to get better at innovation, in Gmail Offers Surprising Innovation Lessons for the Fortune 500. He outlines some of the key ideas demonstrated by the development of Gmail – and it shows us how we can all get better at innovating.

Expanding your community like GE is doing is one great way to improve your innovation capability. Another is to experiment more. Steve Denning talks about that in The Future Workplace is Now: How Etsy Makes 30 Innovations Per Day. Remember when new software releases happened annually? Well, those days are long gone. Etsy recently made the switch from scheduled updates to continuous deployment – and they now have an average of 30 upgrades per day to the site.

As you might expect, this requires some changes in behaviour. With that many changes happening, you can’t have all new ideas going through an approval bottleneck at the management level. Instead, engineers that find problems are authorized to fix them. How does Etsy keep them on track? Purpose.

The management has articulated a clear vision for the firm and the staff are committed to it: making Etsy a very cool online market. “At Etsy,” says Mike Brittain, the engineering director, “purpose is not really a problem.” Within the broad strategic framework, the staff are authorized to proceed with continuous improvement. Many of the changes are “dark” changes that users never see, but which improve the performance of the site. There is continuous testing, and if an improvement doesn’t work, it is removed.

Purpose plus experimenting is a powerful innovation combination.

Hugh MacLeod touches on this issue too when he says Innovation Begins Here:

It is, again, a story of purpose.

This is also the them in my favourite post of the week by Elle Luna – The Crossroads Between Should and Must. She talks about things that we “should” do as the things we do to please others, while those we “must” do are the things that we are driven towards. The problem with the “musts” is that the stakes are higher, and this is scary.

What if who we are and what we do become one and the same? What if our work is so thoroughly autobiographical that we can’t parse the product from the person? What if our jobs are our careers and our callings?

Choosing Must sounds fantastic, right? To step into the fullness of our gifts and offer them up to the world in the form of our work.

Well, it turns out that choosing Must is scary, hard, and a lot like jumping off a terrifyingly high cliff where you can’t see anything down below.

Luna then goes on to talk about how she made that choice. It’s a great post – you should go read it!

Another tool that we can use is design thinking. Jeneanne Rae reports on the economic returns to design in Design Can Drive Exceptional Returns for Shareholders. She reports on the results shown by 15 design-led firms:

Starting with a list of over 75 publicly-traded U.S. firms, we found only 15 that met our six criteria: publicly traded in the U.S. for 10+ years; deployment of design as an integrated function across the entire enterprise; evidence that design investments and influence are increasing; clear reporting structure and operating model for design; experienced design executives at the helm directing design activities; and tangible senior leadership-level commitment for design. Corporations who made the index based on this criteria include Apple, Coca-Cola, Ford, Herman-Miller, IBM, Intuit, Newell-Rubbermaid, Procter & Gamble, Starbucks, Starwood, Steelcase, Target, Walt Disney, Whirlpool, and Nike.

As you might expect from the post’s title, these firms all perform very well.

Once you have an innovation, then you have to tell the story to get people to buy your idea. That is the issue that Valeria Maltoni addresses in her excellent interview with Nancy Duarte on the art of storytelling. They address some of the key themes from Duarte’s outstanding book Resonate. Here is one of the key points:

People can have amazing ideas, but if they don’t communicate them well, the idea won’t become reality. We’ve seen traction for people both internally and externally.

On the internal side, strong communicators tend to work their way up the ranks quicker. People that communicate a vision of what to do and how to get there stand out in organizations where people want purpose to their work.

We’ve also seen organizations get traction and attention as they use their best communicators as ambassadors. There is a lot of power in the spoken word.

I highly recommend both the interview and the book.

Of course, innovation depends very much on people. Jeff Atwood addresses this in Here’s Why You’re Not Hiring the Best and the Brightest. Great people drive great innovation, and lots of firms talk about how they only hire the best. Atwood points out that in practice, this usually means “the best people that happen to live where we’re located.” Here’s the problem – there are a whole lot of highly talented people that don’t fit that definition.

GE is trying to get around this through open innovation. Atwood outlines another approach: hire the best people globally, and let them work wherever they happen to be. Automattic and several other firms do this, as does Atwood’s – Discourse. The catch, of course, is that to do this, you have to change almost all of the other ways that you manage your firm. Atwood talks about the changes you get in hiring, measuring results, and building a community.

We don’t have an index of firms that are doing this yet, but so far, many of the ones that are organised in this way are getting pretty exceptional results.

Finally, Maciej Ceglowski posted the text of a talk that he gave in February at WebStock in Wellington called Our Comrade the Electron. A description won’t do it justice. He tackles several interesting topics including the innovation story behind the invention of the theremin, science in Soviet Russia, and, most importantly, the impact that technology has on the distribution of power. The stories are entertaining, and the discussion of power is critically important.  Check it out!

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GUEST POST from Tim Kastelle

One of the big challenges in innovation is clearing out your head (and your schedule) enough to put in the effort to think creatively. The posts that caught my attention this week are organised around this theme – perhaps because that has been my big struggle this week!

One of the issues that I know a lot of us have to deal with is stress. Abby Kerr talks about one important aspect of stress in How to Not Feel Overwhelmed in Business & Life. Her recommendations include making sure that you take time for yourself each day, and this:

“If you could only work two hours a day, what would be the essentials you’d need to get done? Do those things first every day and let the rest take their place somewhere else in the day or week, when inspiration is flowing.”

Stew Friedman also talks about stress in Reduce Stress by Pursuing Four-Way Wins, part of a series that he’s writing on dealing with stress. He talks about the four important domains in life – work, home, community and personal. If you’re a regular reader of this blog, it won’t surprise you to discover that I like his experimental approach to attacking stress:

“Start by taking a minute to explore your personal four-way view — what’s important to you, where you focus your attention (your most precious asset as a leader), and how things are going in each of the four domains of your life. (You can use this free assessment tool and guide for help in doing so.) Then begin generating ideas for experiments you can try to better align what matters to you with what you actually do.

Design an experiment in which you are deliberately aiming to improve your performance and results in each of the four domains — not to trade them off or to balance one against the other, but to enhance all of them. If you’re stuck, think a bit harder: I have coached and taught thousands of people to do this, and I’ve never met anyone who couldn’t come up with one such experiment about which they were very excited.”

And, as with all experimental approaches, the focus is on action, measurement, and learning.

An important part of dealing with stress is identifying what’s important to you. That is what Frank Chimero talks about in the sad, but wise post This One’s For Me. Chimero talks about losing both of his parents, and the impact that has had on his life and work. A summary won’t do it justice – you should definitely go read it yourself.

Another important part of your personal innovation strategy is to take the power to do things. Experiments are one good way to do this. In their talk at SxSW, Nilofer Merchant and Rachel Sklar discussed another way, hacking privilege and power. This excellent sketchnote by Heidi Forbes Oste summarises the main points:

Ok, so you have dealt with stress, identified your priorities, and grabbed power. Now what?

First off, you need to deal with the flow of incoming ideas, because this is what will help you create interesting new ideas yourself. Two of my favourite online people teamed up to discuss the issue of personal knowledge management. Sacha Chua’s take on her discussion with Harold Jarche is here, and Harold’s is here.

Sacha and Harold both do a lot of great thinking on this topic, and both of them should be in your RSS feed, your twitter stream, or whatever else constitutes your personal information flow.

After all of that, the last step is to start creating. Of course, the big gap is not between people doing lousy work and those doing great work – the biggest gap is between those doing nothing and those doing something. To help you make that jump, James Altucher has written The Ultimate Cheat Sheet for Dealing With Excuses. He says:

There’s always a gap between “what I have now” and “what I would like.”

The gap is all of your excuses. All it takes to close the gap is to be creative and work your way through the excuses. I repeat: this is ALL IT TAKES.

Altucher then goes on to identify most of the excuses we use to avoid doing the work, and tells you how to deal with each of them. It’s great stuff.

Creating space in your head for creativity is an important part of innovation – I hope that these resources will help you clear that space, and do great work!

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GUEST POST from Tim Kastelle

We all know that no one reads books any more, right? It’s because of the internet, and twitter, and Justin Bieber, I think. The argument for this was summed up by Nicholas Carr in his article Is Google Making Us Stupid?

“Over the past few years I’ve had an uncomfortable sense that someone, or something, has been tinkering with my brain, remapping the neural circuitry, reprogramming the memory. My mind isn’t going—so far as I can tell—but it’s changing. I’m not thinking the way I used to think. I can feel it most strongly when I’m reading. Immersing myself in a book or a lengthy article used to be easy. My mind would get caught up in the narrative or the turns of the argument, and I’d spend hours strolling through long stretches of prose. That’s rarely the case anymore. Now my concentration often starts to drift after two or three pages. I get fidgety, lose the thread, begin looking for something else to do. I feel as if I’m always dragging my wayward brain back to the text. The deep reading that used to come naturally has become a struggle.”

You can see it in these stats too – this is data from Gallup showing how many people answer “yes” to the question “Are you currently reading any books or novels at present?”

That shows a clear decline, right? Well, no. Take a look at the dates on the bottom – for some weird reason, the run from now backwards. So this isn’t a decline in reading, it’s actually a big increase.

You can see the another take on this in data released this week by Pew. The numbers are higher than the ones from Gallup because this shows readers in the past year, not in the moment. And again, the numbers have shot up from what they were 60 years ago, when the average was around 40%:

We’re reading more than ever.

If you add in the amount of reading that we’re doing on the internet, the stuff that Carr blames for his drop in attention, then we’re reading LOTS more than ever.

Why?

In part, because of education. Reading rates are strongly tied to the percentage of the adult population that has some degree beyond high school. This number has climbed consistently since the middle of the 20th century.

Another part of the story is that for the first time in history, lots of kids and teenagers are voluntarily reading books. That is Harry Potter and The Hunger Games at work.

I was surprised when I first saw these stats, because even though I’m reading more than ever personally, the narrative that Carr and others are putting forward makes some sense. And we can have a discussion about whether or not the quality of books being read has gone down. It probably has, but mainly because so many more people are reading! You always get that when an activity jumps from a niche to the mainstream.

Who wouldn’t be surprised by these stats?

• Amazon:  they’ve made a ton of money selling books of all kinds. A big percentage of the eBooks in the Pew data will have come through Amazon. Not only did they come up the Kindle, they also made Kindle for iPhone, Kindle for Android, Kindle for tablets. By making it much easier to read books anywhere, they’ve sold a whole lot of books.

• The Strand:  the best second-hand bookstore in the world (or, at least, my favourite) had their best sales day in history this Christmas. As many stores selling physical books have gone out of business, The Strand has succeeded by innovating their business model. They provide a great in-store experience, lots of events, and lots of books that are really hard to find anywhere else.

• Writers: one of the reasons that the number of readers has been increasing is that the number of books has gone through the roof. As the barriers to publication drop to nothing, it is easier than ever to publish a book. While this results in a lot of crap, it also means that no matter how obscure your interests, it is also easier than ever to find something to read about them.

The common thread here is that the people and firms that have been winning in the book business these days are the ones that somehow found a way to avoid the assumption that no one is reading any more. What other opportunities does this open up?

As Mark Twain said:

“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”

Avoiding false assumptions provides a big innovation opportunity. What do you know for sure that just ain’t so?

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GUEST POST from Tim Kastelle

The first time I hit my top gear

The summer after my first year at university I got a job at a feed mill. According to my financial aid agreement, I had to make several thousand dollars over the summer that I could contribute to my overall expenses. We had just moved to a new city where I didn’t know anyone, so I had no connections. I used a temporary agency, and they send me to the mill.

It was hard work – the hardest work I’d ever done. Since we were in the process of moving, my Dad and I were living in our camping trailer during the week while my Mom and my brother stayed in Portland and worked on selling the house. I’d come home to that trailer exhausted every night.

After about a month, Doug, the floor manager called me and the other new floorhand into the lunch room to have a talk with us. He chewed us out royally. We weren’t packing feed fast enough, we broke too many bags, we weren’t helping customers quickly enough. He thought that we were either lazy or somehow deficient. If we didn’t improve, he’d have to fire us.

I went home that night furious. Didn’t he know that I was working as hard as I possibly could? I talked it over with my Dad. Then I looked at the ads for work in the paper. I thought about the $3000 I needed for college. And I decided that my only choice was to keep trying at the mill.

The only thing to do was to work so hard that I collapsed – then Doug would see that he’d pushed too hard.

Of course, he hadn’t.

I discovered another gear that I never knew I had. After another month, I was working much faster, and much more accurately.  I ended up being a pretty good floorhand. When I went back the next summer, I was promoted to feed mixer.

My team looks for their top gear

I just finished a week working with a team of 10 MBA students as part of collaboration with the Wharton Business School in their Global Consulting Practicum (GCP). They had to develop a proposal for our client, and get it signed off – this will guide the work that they do for the next four months.

They had a good week. They worked really hard, over long hours. They developed an excellent proposal, and the client loved it. They are set up to do a really good project.

However, now I know a bit how Doug felt. The team didn’t hit their top gear.

We talked about it on the last day, and I told them this. Unlike me in the mill, they agreed with me (or, at least, they appeared to!)  If they find that top gear, they have a chance to not just do a really good project, but to do a great one.

What keeps us from finding our top gear?

One of the important ideas here is flow – being fully immersed in a piece of work. Top gear is getting into a state of flow for an extended period of time. It’s quite different from busyness – that is often the state we get ourselves into when we are subconsciously trying to avoid top gear.

There are three things that can keep us from hitting our top gear:

1. Ignorance. We might not know what we’re capable of, as I didn’t back at the feed mill.

2. Apathy. We may be aware of our top gear, but the current project might not be worth the effort it takes to hit that gear. We might be able to get by with a little less effort, and still do pretty well.

3. Fear. We might know what we can do, and have a project that we care deeply about, but we’re scared.  So we hold back – that way, if we fail, at least we can tell ourselves that we might not have failed if we had put in everything we had.

Personally, I’ve had experience with all three. You probably have too.

This is a big innovation issue. If we want to innovative ourselves, and if we want our firms to innovate, everyone needs hit their top gear. There are too many other things going to approach innovation with anything less than a full effort.

We always have to keep the lights on, and it’s easy enough to tell ourselves that doing so really does take everything we’ve got. But, of course, it doesn’t. Most of us have another gear – and hitting it will let us do truly exciting and innovative work.

To be more innovative yourself, you have to tackle all three things that keep us from hitting our top gear:

1. Understand that you can be creative. This is the ignorance part – too many people say “I’m not creative.” But you are. As Nilofer Merchant says, “Not everyone will, but anyone can.” You have ideas that are worth pursuing.

2. Do work that matters. It’s hard to innovate when you don’t care about the job. You have to be working on something that matters to you, otherwise it isn’t worth the effort and pain that it takes to hit your top gear.

3. Fight through your fear. Everyone is scared to put their ideas out into the world. I am.

Here is what Paul Jarvis says about it in his book Everything I Know:

“Most of the time, our fears come down to being judged by others. And it’s a valid fear, because other people can be really fucking judgmental. Letting that judgment actually stop you from doing something, though, only hurts you. Know that everyone else (including the most successful people in the world) is judged, too. In fact, wildly successful people are judged exponentially – every day. But they push on. We need to do the same. Pushing past the fear of being judged and doing the work is exactly what can lead to great work.”

You’re not alone. But we all have to find a way to fight through our fear – that’s the only way innovate.

I wasn’t hitting my top gear at the feed mill. And I still don’t hit it as often as I’d like. For me, the biggest obstacle is fear. I have to find a way to fight through it, and so do you, because finding that top gear is one of the greatest feelings in the world. And it’s the source of all of the innovation that we care about.

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GUEST POST from Tim Kastelle

Could it be that simply paying attention could make us more innovative?

Probably.

The basic premise behind On Looking by Alexandra Horowitz is that we miss a lot of important stuff, all the time. She opens by saying:

“You missed that. Right now, you are missing the vast majority of what is happening around you. You are missing events unfolding in your body, in the distance, right in front of you.

By marshaling your attention to these words, helpfully framed in a distinct border of white, you are ignoring an uthinkably large amount of information that continues to bombard all of your senses…

This ignorance is useful: indeed, we compliment it and call it concentration.”

The book, which is wonderful, recounts eleven walks that Horowitz takes with others that allow her to see the world differently, to pay attention to the things that she normally misses.

She sees her neighbourhood in Manhattan through the eyes of her nineteen month old son, her dog. and entomologist, an artist, a typography expert and others (see Maria Popova’s discussion of the book here). Through these walks, Horowitz learns a great deal about what she normally misses.

One of her main points is that even in the seemingly simplest settings, there is far more information available than we are able to process. If we try to process every piece of data in a forest, or on our street, or in our house, we will end up so overwhelmed that we will be paralyzed. We have always suffered from information overload – it’s not new at all.

“As it turns out, I was missing pretty much everything. After taking the walks described in this book, I would find myself at once alarmed, delighted, and humbled at the limitations of my ordinary looking. My consolation is that this deficiency of mine is quite human. We see, but we do not see: we use our eyes, but our gaze is glancing, frivolously considering its object. We see the signs, but not their meanings. We are not blinded, but we have blinders. My deficiency is one of attention: I simply was not paying close enough attention. Though paying attention seems simple, there are numerous forms of payment. I reckon that every child has been admonished by teacher or parent to ‘pay attention.’ But no one tells you how to do that.”

Horowitz spends the rest of the book trying to figure how to best pay attention.. By walking with her son and her dog, she has to empathize with their views of the world to learn what is capturing their attention.

Empathy is one part of the equation, and expertise the second. To think about this, take a look at this picture of a swee waxbill that Nancy took last year in South Africa:

First off, look at the depth of field – the bird is in focus, as is the grass it is eating. Everything else is blurry. This is what attention looks like – we select a small amount of data to process, ignoring the rest.

Now, think about what people with different expertise can observe in this relatively simply picture. Birders  like me see the bird. A botanist can tell you about the grass, and probably about the plants in the background as well. In addition to that, by looking at the plants, they can tell you what part of the world that is, what kind of climate is there, the characteristics of the soil, and so on. An entomologist can tell you about what bugs you could expect to find.

It’s knowledge that lets you see more than just “hey, a bird!”

In his terrific book Creative Intelligence, Bruce Nussbaum also uses birding as a way to think about innovation:

“As a birder, I’ve learned to look and listen for what shouldn’t be there. What’s unusual. What goes against popular wisdom. It involves a certain amount of domain expertise—I’m certainly a better birder now than I was when I began fifteen years ago. But even if you’ve yet to amass experience in a particular field, you can still improve your chances of spotting the surprises you may not be expecting. For birders, it can mean going to strange and sometimes unsavory places. When I was in Singapore for a design conference, I went birding at a municipal waste treatment facility and found a number of birds—including one black swan. It was a rarity in Singapore and a good find. I was surprised, but not shocked. I was, after all, looking for what was not supposed to be there. Just as good detectives are trained to hear the dog that did not bark—so too are good scientists trained to look, and listen, for what’s not there.”

We can combine empathy and expertise to find opportunities to innovate. We can do this by seeing things that others miss – by paying attention.

Part of this is pattern recognition. It’s the expertise that helps us recognise patterns that might be unusual and easy to miss for others. This skill becomes even more powerful when we combine expertise in different domains – it is at the edges and borders that the best ideas often lie.

Part of this is seeing as others do – empathy. By seeing from their perspective, we can combine this new view with our own skills and expertise to develop innovative ideas.

We have to filter to make sense of the world – there’s no way around it. But when we fall into routines, it means that we are overfiltering – we end up missing important and interesting things. If we can figure out ways to relax our filters through empathy, or to change them through learning, then we have a chance to see something new.

That’s paying attention. The reward we might get for doing this is seeing a great new idea.

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GUEST POST from Tim Kastelle

When you’re doing something new, do you plan it out in advance, or start in and see what emerges?

Those are the two approaches that George R.R. Martin describes as common for writers. In an interview in the Sydney Morning Herald (h/t 99u), he says:

“There are architects and gardeners. The architects do blueprints before they drive the first nail, they design the entire house, where the pipes are running, and how many rooms there are going to be, how high the roof will be. But the gardeners just dig a hole and plant the seed and see what comes up. I think all writers are partly architects and partly gardeners, but they tend to one side or another, and I am definitely more of a gardener. In my Hollywood years when everything does work on outlines, I had to put on my architect’s clothes and pretend to be an architect. But my natural inclinations, the way I work, is to give my characters the head and to follow them.”

I think that the same idea applies to innovation. There are people that work hard at building a good structure to support innovation. Jeffrey Phillips and Paul Hobcraft are two examples of this  – at least I think so, they might debate the classification! Innovation gardeners are more likely to try stuff out and see what works – I’d say that Jorge Barba and I both fall more into this camp.

It seems pretty straightforward, right? Either you plan things out in advance and then work to the plan, or you try stuff out and see what emerges.

But, like all dichotomies, this is a false one. It’s a false dichotomy for innovation, and I suspect that it is for writing as well.

Innovation is filled with tensions between goals that seem to be opposites. Roger Martin says that we need to use integrative thinking to resolve these tensions:

“Integrative Thinking is the ability to constructively face the tensions of opposing models, and instead of choosing one at the expense of the other, generating a creative solution of the tensions in the form of a new model that contains elements of the individual models, but is superior to each.”

These aren’t either/or choices – they are both/and decisions.

Here are three actions that you can take in response to this:

1. Avoid the comfort of black and white thinking. The comments on the posts discussing Martin’s quote consist of things like “architects are great, that’s the only way to write.” Of something similar in favour of gardeners. But doing new things means that it is never black or white – things are always grey. We have to learn to be comfortable with both ends of a spectrum, and accommodate both. We need to explore for new ideas while at the same time we exploit the advantages from the great ideas that we executed earlier. These require different skills, and it’s easiest in the short run to choose one or the other. But to succeed over the long run, we need to do both.

2. Become a gardening architect. I tend towards the gardening side – this was very obvious this afternoon when I was outlining a book chapter. That’s architect’s work, and I’m not so good at it. But I need both skills. So do you. Figure out which approach you’re more comfortable with, and then develop a strategy for getting both skills into your process.

3. Collaborate to address your weakness. You don’t necessarily need to have both skills yourself – innovation is a social game. But you have to think about how you build your alliances. It’s easiest to collaborate with people that are most like us – so architects will be drawn to work with other architects, and the same for gardeners. But the key to innovation success is to have cognitive diversity. Nilofer Merchant wrote an excellent post on this idea – and quoted Scoot Page, who said the value of diversity is a proven mathematical truth, not a feel good mantra. If you’re an architect, the best way to become a gardening architect is to find a gardener to work with.

I love Martin’s metaphor – it feels right to me. I can see both ways of writing, and of innovating. But I also think that while it makes a great soundbite, the reality is a bit messier.

We need to find ways to integrate apparently conflicting ideas. This is a key innovation skill.

While you start thinking about how to build this skill, I’m going to go hack around some more with that outline, to see what emerges from it…

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GUEST POST from Tim Kastelle

You could make the case for “That’s interesting.” Lots of great ideas start with curiousity. If you want to become more innovative, increasing your awareness of what’s going on around you is a great way to start. And when you find interesting things, you can start to learn more about them.

Another candidate is “That really bugs me.” We know that a lot of innovation is irritation-based.  When things don’t work right, we want to fix them.  It’s an important innovation driver.

My vote for the Most Important Phrase in Innovation goes to “This might not work.” You can’t innovate without saying this. If there’s not a measurable chance that your idea won’t work, then it’s not new.

That’s the back of the bonus book that was part of Seth Godin’s kickstarter project last year (for an interesting discussion of that, see this from Dan Blank). It referred to a few things – the idea of making a 1200 page book out of blog posts, and raising money to fund a book through kickstarter, and launching it without publisher or media support, etc.

Godin has been consistently running experiments over the past few years (like the kickstarter campaign, and The Domino Project), trying to figure out what the next business model for publishing might be. Here is a clip from his blog post today, talking about the blockbuster mentality in Hollywood:

“But since they pay so much, they have no choice, they think, but to say, ‘This must work!’ So they polish off the edges, follow the widely-known secret formula and create banality. No glory, it seems, with guts.”

“Every meeting is about avoiding coming anywhere near the sentence, ‘this might not work,’ and instead giving ammunition to the groupthink belief that this must work.”

“And as soon as you do that, you’ve guaranteed it won’t.”

If you think that it must work, you’ve guaranteed it won’t. In other words, you can’t innovate without saying “This might not work.”

The Key to Innovation is Experimenting

Journalism is in turmoil right now – no one has any idea what the next business will look like. It seems like the the big publishers and news firms will only try out ideas they believe must work. And so, they don’t.

When faced with a high level of uncertainty like this, we must experiment. I saw a great example of this today in an inspiring talk by Mia Freedman. She talked about being named editor of Cosmopolitan Australia at the age of 24, and how she eventually left that position. After a brief foray into television, she started a blog – mamamia.com.au (you can hear or read the full story in this interview with Timbo Reid). Mamamia is now one of the most popular websites in Australia.

It all sounds pretty straightforward, right?

Not really. Freedman did a great job of then explaining all of the challenges she faced in building the site, the points where it might have did, and some of the doubts that she had as she went along. It became clear that all the way through, “this might not work” was very real.

If you think about, the idea of leaving the position of Editor of Cosmopolitan, Cleo and Dolly to start a blog would have sounded insane when Freedman did it. And yet, she that’s what she did. And now, she might be figuring out what the next business model for media looks like.

The Flipside to “This Might Not Work”

Why are we willing to try things when this might not work?

Because it might work.

The only way to change things is to try things that might not work. This, of course, does not guarantee that things will work out – your idea might be truly nuts, or impossible. But we have to aim high. The reward when we do is that this might work.

Innovation is challenging because to innovate we must seek out uncertainty. For most people, this isn’t comfortable – that’s why we don’t like “this might not work.” Nevertheless, if we want to do work that makes a difference, that’s where we need to be. To grow we have to try, stumble, and learn.

So give it a go. It might work!

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GUEST POST from Tim Kastelle

How High Should You Aim?

Last year, Matt Perez invited me to go along to a Future of Money workshop with him during one of my visits to Silicon Valley. It was a fascinating day. One thing that struck me about it is that the people describing their projects had wildly varying levels of ambition.

At one end of the spectrum was the bank that told us how they developed the world’s first “social credit card”. What makes it social? You can “Like” it on Facebook.

At the other end was the startup that wants to replace the global banking system with one based on tweets.

One idea makes the smallest of incremental change, while the other one aims to turn the world on its head. There are some interesting ideas for innovation in this.

Innovation Lessons from the Bank With Tweets Guys

• If you’re big, you need to try ideas all along this spectrum. If you’re a larger organisation, you need to be trying all kinds of innovation. The ones at the safe end keep you competitive – these are the things that improve your current offerings. But you also need to work on ideas that extend your current strengths into new markets – this is how you grow. Finally, you need to invest in some of the ideas that are nuts – the ones that will turn your industry on your head. This allows you to help shape the future a bit, and it also helps you adapt if the Bank With Tweets guys really do make their idea work. This is an important part of the portfolio approach to innovation management.

• If you’re a startup, you need to choose how high to aim. The double bar on the spectrum in the picture is important – this is where the potential returns to your idea start to grow exponentially. To the left of this break, if you start an organisation, both the risk and the return are fairly limited. Paul Graham writes about how being a startup means aiming for high growth. In his phrasing, a barbershop is not a startup. There is some risk (you could be a bad barber, you could start the shop in a neighborhood of hippies that don’t need haircuts, fashion can change, etc.), but not lots of it. And if you are reasonably competent, you can make a good return by starting this kind of business. On the other hand, firms with ideas to right of the break are aiming to be high growth. Here is what Graham says (the whole post is essential reading, so check it out):

“The constraints that limit ordinary companies also protect them. That’s the tradeoff. If you start a barbershop, you only have to compete with other local barbers. If you start a search engine you have to compete with the whole world.

The most important thing that the constraints on a normal business protect it from is not competition, however, but the difficulty of coming up with new ideas. If you open a bar in a particular neighborhood, as well as limiting your potential and protecting you from competitors, that geographic constraint also helps define your company. Bar + neighborhood is a sufficient idea for a small business. Similarly for companies constrained in (a). Your niche both protects and defines you.

Whereas if you want to start a startup, you’re probably going to have to think of something fairly novel. A startup has to make something it can deliver to a large market, and ideas of that type are so valuable that all the obvious ones are already taken.”

If you’re starting out, you need to understand that these are two very different types of business. There are different ways to make them work, they require different skills and resources to manage, and the potential outcomes are very different. So you need to decide how high you’re going to aim.

• If you’re a region, you need lots of firms that are aiming high. The Bank With Tweets idea probably won’t work. On the other hand, there are probably 1000 startups in Silicon Valley trying out ideas that might seem just as crazy right now, and eventually one of them will work, and it will change the way we bank. I was talking with my PhD student Andrew Barnes today, and we agreed that on average, Australian startups aren’t aiming high enough. There are lots of startups that are aiming more at the barber shop end of the spectrum. Collectively, we have to figure out how to address this.

• Solve a real problem. Let’s go back to Graham again – he says “For a company to grow really big, it must (a) make something lots of people want, and (b) reach and serve all those people.” There isn’t much demand for a credit card that you can “Like” on Facebook, so our bank fails on (a). I’m not sure that the Bank With Tweets guys can actually make something that will solve their problem, even if lots of people would like better banking. So they fail on (a) too. The thing that struck me about the day is that there was only one firm there looking at the place where mobile banking is working right now Africa. As The Economist points out, Kenya leads the world in mobile banking. Why? Because there are few banks, but lots of mobile phones, cash is dangerous to carry and use, and without mobile banking it is nearly impossible to safely transfer money from one person to another. These are all real needs, and firms like M-PESA solve these problems. The high growth startup in the future of money is highly likely to come from Africa.

There is always risk in innovating, even if your idea is down towards the Safe end of the spectrum. But some ideas are definitely riskier than others. If you’re a startup, you have to decide how high you’re aiming.

Often, we’re not aiming high enough. If we try to solve real problems that lots of people have, that is one good way to reduce the risk of the ideas that seem a bit nuttier. And since all of the low-hanging fruit has been harvested, if you want to have an impact, it will have to be with an idea that seems nutty.

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