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Why Following Someone Else’s Success Can Lead to Your Failure

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GUEST POST from Stephen Shapiro

You attend conferences. You read books. You take training classes. All with the goal of learning strategies from those who have paved the path to success before you.

But what if following in their steps could lead you down the wrong track?

3M talks about its 15 percent rule–a philosophy that allows anyone in the organization to spend 15 percent of their time on something other than the products they are directly tasked to develop. For 3M this is an incredibly powerful strategy. Unfortunately, for many companies that try to replicate this, they often end up wasting 15 percent of their time and money on innovations that add no value.

Why is this?

There are two factors you need to consider whenever you study what someone else is doing:

  1. The underlying context
  2. The undersampling of failure

The Underlying Context

What works for one organization may not work for yours because the context is different.

3M’s culture has decades of experience with its 15 percent rule. There are many unwritten rules that support the concept, enabling it to be a powerful strategy for the company. 3M’s measurements systems are in line with this. Their performance measures enable it. In a nutshell, it is part of their DNA. It is hard to bolt on such a system if you don’t have all of the underlying principles and have it work properly.

There are other forms of context that matter. For example, your business differentiator may impact which practices make sense for your organization. If you look at the insurance industry, although nearly every company is moving heavily into apps and new technology as a differentiator, State Farm has continued to reinforce its personal touch. The company’s advertising rarely talks about technology but rather focuses on its widespread network of agents who are there to help. This has enabled State Farm to gain a lion’s share of the homeowner’s insurance market.

Undersampling of Failure

But there is a more deceptive reason why following someone else’s path to success may lead you in the wrong direction. It is called the “undersampling of failure” (a.k.a. Survivor Bias).

It’s important to recognize that when learning from others, quite often they don’t really know what made them successful. Was a particular “best practice” really the key to their success? The only way to truly know is to find a number of other companies who tried the same strategy. Were most of them successful? Or was the success limited to a small percentage? We see this all of the time. “Hey, this five-step strategy worked for me and it will work for you!” But what if 1,000 other people tried the same approach and failed. Would we ever hear about them? Probably not.

We tend to only study the successes (a.k.a. survivors) and undersample the failures.

Timing can also be a factor. In today’s fast-moving world, studying what someone did last year may be completely irrelevant to what will work today. People teaching you social media strategies may be outdated by the time you hear about them. I’ve had my own business for over 15 years. The approaches that I used in the past to drive my success would be silly in today’s environment.

And in some cases, a first-mover advantage may be the cause. The first people on Twitter had a better chance of making it big than those joining up today. And those who hopped on the Bitcoin bandwagon early on will certainly make more money than those who decide to invest there now.

These concepts are critical for all organizations (and individuals) to understand. We love to learn from others. And we should, because it can speed development times. But remember, replicating is never innovation. In fact, replication without skepticism, can lead to failure.

As I embark on my new column with Inc.com, I start with this article because I feel it sets the tone for everything I write. I will do my best to provide perspectives on how to drive higher levels of ROI with your innovation efforts. But as with any advice, be skeptical. Ask if it is right for you. Ask if it is right for you right now.

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Innovate Where You Differentiate

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GUEST POST from Stephen Shapiro

Although some innovation experts say that you want “everyone innovating everywhere,” I believe this is bad advice.

Instead, make sure that everyone is working on innovations that are of strategic importance. You don’t want employees innovating everything. You want them to innovate where you differentiate. That is, focus your energies on those capabilities that set you apart from the competition and make a difference to your customers.

One company that has done this exceptionally well is the financial services firm, USAA. They only offer services to members of the military and their families. Their mantra is to serve those who serve our country. Given the unpredictable and often transient nature of those in the military, being ‘easy to do business with’ is critical. Their differentiator is world-class customer service. They define innovation as “anything that makes the lives of their members better.”

This clarity helps them focus their innovation investments to produce unprecedented results.

In fact, year after year,  USAA gets top ratings for customer service. For example, a recent Temkin Customer Service Ratings puts them at the #1 and #2 positions in customer service of any company in any industry.

What about you?

  • Where do you differentiate?
  • On which list would you like to be #1?
  • Does everyone in your organization have a clear understanding of this differentiator?
  • Is this used to prioritize your innovation efforts?

When you “innovate where you differentiate,” you get everyone laser focused on what matters most to your organization. This gives you consistently higher ROI on your innovation efforts.

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Bring Me Better Problems

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GUEST POST from Stephen Shapiro

In life and in business, we are often told, “don’t bring me problems, bring me solutions.”

From my perspective, this is bad advice. I want people to bring me bigger and better problems.

Or, as the fortune cookie I got recently implied (see below), if you don’t focus on the right question, the answers/solutions may be useless.

Unfortunately, most people continue to work on solutions to problems that don’t matter.

Here are some questions that will help you prioritize your thinking:

  • Are you focused on what is important…or on what is urgent? Many people are “firefighting arsonists,” creating urgency in everything, even if it is not critical. A short-term mentality prevails. Make time for the important investments that will pay long-term dividends.
  • Are you investing energy on activities that provide exponential returns…or linear returns? Most people rarely look for what gives them leverage. Look for partners and business models that enable you to scale your solutions.
  • Are you working on what you actually can change/influence…or on what you wish could be changed? Not everything can be changed. Just because you are frustrated does not mean you should try to fix something. Trying to change others, for example, is a losing proposition. Instead change your attitude towards them.
  • Do you appreciate the differences in others that complement you…or on the differences that annoy you? Contrary to conventional wisdom, opposites do not attract. We tend to focus on what we don’t like in others, instead of seeing how those attributes might actually be beneficial to us. But diversity, when viewed through the right lens, can be extremely valuable.
  • Do you develop solutions that the world will value…or what you value? Some of my artist friends don’t want to “sell out.” Basically this means that they don’t want to create what others want and would rather do what they want…and remain poor.

Too often we invest our time, money, and energy (including mental energy) on things that don’t really matter or don’t produce real results.

By asking a different question you will always get a different answer. By refocusing and reframing, you can do less while getting better results.

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The Value of "Line" Thinking

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GUEST POST from Stephen Shapiro

From my experience, 80% of innovations within most companies are “dot solutions.” That is, innovations are typically developed by individuals from a single domain of expertise. Deep expertise is valued. Dig deep wells.

While spending time recently at 3M, I learned that 80% of their innovations are “line solutions.” That is, multiple domains of expertise are involved. For example, they might blend expertise from adhesives with expertise from abrasives to develop a new solution. Although this may be unusual within other organizations, at 3M, this is the norm. They are masterful at connecting dots.

But is this connected approach valuable?

They shared with me some recent research they’ve been conducting. The results are fascinating.

In a nutshell, they found that…

Line thinkers within 3M – based on the number of patents they contributed to in different areas of expertise – contributed significantly higher financial returns for the organization.

In other words, the people who became exceptionally deep experts and never used that expertise to contribute to different parts of the business were less valuable than those who made contributions to a wide range of products.

The financial impact of line thinking is staggering.

And although this approach is not the norm in most organization, it can certainly be encouraged through shifting the culture to one that recognizes and rewards these types of contributions.

(for more on my perspectives on dot vs line thinking, please read my article from a while back – this is a critical concept for innovation – I discuss it further in “Best Practices Are Stupid”)

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