Humans Are Not as Different from AI as We Think

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Humans Are Not as Different from AI as We Think

GUEST POST from Geoffrey A. Moore

By now you have heard that GenAI’s natural language conversational abilities are anchored in what one wag has termed “auto-correct on steroids.” That is, by ingesting as much text as it can possibly hoover up, and by calculating the probability that any given sequence of words will be followed by a specific next word, it mimics human speech in a truly remarkable way. But, do you know why that is so?

The answer is, because that is exactly what we humans do as well.

Think about how you converse. Where do your words come from? Oh, when you are being deliberate, you can indeed choose your words, but most of the time that is not what you are doing. Instead, you are riding a conversational impulse and just going with the flow. If you had to inspect every word before you said it, you could not possibly converse. Indeed, you spout entire paragraphs that are largely pre-constructed, something like the shticks that comedians perform.

Of course, sometimes you really are being more deliberate, especially when you are working out an idea and choosing your words carefully. But have you ever wondered where those candidate words you are choosing come from? They come from your very own LLM (Large Language Model) even though, compared to ChatGPT’s, it probably should be called a TWLM (Teeny Weeny Language Model).

The point is, for most of our conversational time, we are in the realm of rhetoric, not logic. We are using words to express our feelings and to influence our listeners. We’re not arguing before the Supreme Court (although even there we would be drawing on many of the same skills). Rhetoric is more like an athletic performance than a logical analysis would be. You stay in the moment, read and react, and rely heavily on instinct—there just isn’t time for anything else.

So, if all this is the case, then how are we not like GenAI? The answer here is pretty straightforward as well. We use concepts. It doesn’t.

Concepts are a, well, a pretty abstract concept, so what are we really talking about here? Concepts start with nouns. Every noun we use represents a body of forces that in some way is relevant to life in this world. Water makes us wet. It helps us clean things. It relieves thirst. It will drown a mammal but keep a fish alive. We know a lot about water. Same thing with rock, paper, and scissors. Same thing with cars, clothes, and cash. Same thing with love, languor, and loneliness.

All of our knowledge of the world aggregates around nouns and noun-like phrases. To these, we attach verbs and verb-like phrases that show how these forces act out in the world and what changes they create. And we add modifiers to tease out the nuances and differences among similar forces acting in similar ways. Altogether, we are creating ideas—concepts—which we can link up in increasingly complex structures through the fourth and final word type, conjunctions.

Now, from the time you were an infant, your brain has been working out all the permutations you could imagine that arise from combining two or more forces. It might have begun with you discovering what happens when you put your finger in your eye, or when you burp, or when your mother smiles at you. Anyway, over the years you have developed a remarkable inventory of what is usually called common sense, as in be careful not to touch a hot stove, or chew with your mouth closed, or don’t accept rides from strangers.

The point is you have the ability to take any two nouns at random and imagine how they might interact with one another, and from that effort, you can draw practical conclusions about experiences you have never actually undergone. You can imagine exception conditions—you can touch a hot stove if you are wearing an oven mitt, you can chew bubble gum at a baseball game with your mouth open, and you can use Uber.

You may not think this is amazing, but I assure you that every AI scientist does. That’s because none of them have come close (as yet) to duplicating what you do automatically. GenAI doesn’t even try. Indeed, its crowning success is due directly to the fact that it doesn’t even try. By contrast, all the work that has gone into GOFAI (Good Old-Fashioned AI) has been devoted precisely to the task of conceptualizing, typically as a prelude to planning and then acting, and to date, it has come up painfully short.

So, yes GenAI is amazing. But so are you.

That’s what I think. What do you think?

Image Credit: Pixabay

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Derision Means You’re Doing It Right

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Derision Means You're Doing It Right

GUEST POST from Mike Shipulski

When you see good work, say so.

When you see exceptional work, say so in public.

When you’ve had good teachers, be thankful.

When you’ve had exceptional teachers, send them a text because texts are personal.

When you do great work and no one acknowledges it, take some time to feel the pain and get back to work.

When you do great work and no one acknowledges it, take more time to feel the pain and get back to work.

When you’ve done great work, tell your family.

When you’ve done exceptional work, tell them twice.

When you do the work no one is asking for, remember your time horizon is longer than theirs.

When you do the work that threatens the successful business model, despite the anguish it creates, keep going.

When they’re not telling you to stop, try harder.

When they’re telling you to stop it’s because your work threatens. Stomp on the accelerator.

When you can’t do a project because the ROI is insufficient, that’s fine.

When no one can calculate an ROI because no one can imagine a return, that’s better.

When you give a little ground on what worked, you can improve other dimensions of goodness.

When you outlaw what worked, you can create new market segments.

When everyone understands why you’re doing it, your work may lead to something good.

When no one understands why you’re doing it, your work may reinvent the industry.

When you do new work, don’t listen to the critics. Do it despite them.

When you do work that threatens, you will be misunderstood. That’s a sign you’re on to something.

When you want credit for the work, you can’t do amazing work.

When you don’t need credit for the work, it opens up design space where the amazing work lives.

When your work makes waves, that’s nice.

When your work creates a tsunami, that’s better.

When you’re willing to forget what got you here, you can create what could be.

When you’re willing to disrespect what got you here, you can create what couldn’t be.

When your work is ignored, at least you’re doing something different.

When you and your work are derided, you’re doing it right.

Image credit: Pexels

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Ten Customer Experience and Service Tips for 2024

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Ten Customer Experience and Service Tips for 2024

GUEST POST from Shep Hyken

I want this year to be your best year ever for creating amazing customer service and experiences. And for everything else, too! But as it applies to the customer experience, I thought it would be fun to share some ideas we need to do more of. With that, here are ten (10) ideas. Many, if not all, will apply to you and your business. Do more in 2024!

  1. Be more responsive – We start with one of my favorites. How fast do you respond to customers? Trust me, the faster you respond, the better. Customers appreciate a quick response. I often joke about a company that took four days to get back to me with an answer. If I wanted the answer in four days, I would have waited four days to ask the question! A speedy response creates confidence.
  2. Be more accountable – Don’t make excuses or blame others. Don’t deflect blame if a customer complains about something, even if it’s not your fault. It may not be your fault, but it’s now your opportunity to solve a problem.
  3. Be more flexible – Don’t be so rigid with rules unless they are legal rules. In most instances, the word guidelines are better than rules. You know where you want to go. Be flexible in your thinking when it comes to taking care of customers.
  4. Be more engaged – Your customers want to feel that you’re focusing on them. Actively listen and respond with questions that show you’re paying attention and want more information. Get customers to feel connected to you because they know you care.
  5. Be more consistent – I’m surprised when employees of the same company have different answers to the same question. Or when a company or brand delivers a great experience, but then the next time, it’s just okay. Consistency creates confidence, and confidence can lead to customer loyalty.

  1. Be more accessible – Make it easy for your customers to reach you in multiple ways: phone, email, text, app, and more. Today’s customers will reach out to you in the most convenient way. Today, they may call you. Tomorrow, they may email you. Regardless of the channel, you need to be there and meet their communication expectations.
  2. Be more convenient – Convenience is about being easy to do business with. It used to be a significant competitive differentiator. Today, it’s table stakes. It’s expected that your customer’s experience will be easy with little or no friction. Find ways to be easier to do business with, and customers will spend more money, won’t be as concerned about price, and most importantly, will come back!
  3. Be more proactive – When there’s a problem that you know about, reach out to your customers before they reach out to you. They might not even know there is a problem at all, and the fact that you were proactive builds confidence and trust.
  4. Be more transparent – Don’t hide important information in “fine print.” Be open about policies and anything you know the customer might question or simply not like. Have you ever been hit with a surprise fee? Of course, you have, and I’ll bet you didn’t like that surprise. You don’t want your customers to say, “I’m disappointed. I wish that you told me about that in the beginning.”
  5. Be more memorable – Let’s close with a powerful one. When I’m hired to do a customer service keynote speech, my walk-on music is Bonnie Raitt’s hit song, Let’s Give Them Something to Talk About. That’s what I want you to do with your customers. Give them something (good) to talk about. Why? Because when you give them a memorable experience, it will make them say, “I’ll be back!”

Image Credits: Shep Hyken, Pexels

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Cover versions, Sequels, Taylor Swift and Innovation

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Taylor Swift and Innovation

GUEST POST from Pete Foley

An inherent contradiction in almost any new innovation is that it needs to be both new, but also somewhat familiar.  If it doesn’t offer anything new, there is little motivation for consumers to risk abandoning existing habits or preferences to try it.  But if it is not at least anchored in familiarity, then we ask consumers to put a lot of effort into understanding it, in addition to any opportunity cost from what they give up for trying something new.  Innovation is difficult, and a lot of innovations fail, at least in part because of this fundamental contradiction. 

Transformative Performance:  Of course, innovations can be successful, which means we do navigate this challenge.  But how? One way is to deliver something with such transformative benefits that people are willing to push themselves over the hump of learning something new. Huge benefits also create their own ‘gravity’, often spreading via world of mouth via media, social media, and even old-fashioned human-to-human conversations. This avoids the need for brute force mass marketing spend that can create the illusion of familiarity, but with a hefty price tag that is typically beyond smaller companies

Familiarity: The second option is to leverage what people already know in such a way that the ‘adoption hump’ becomes relatively insignificant, because new users intuitively know what the innovation is and how to use it.

Wow!  The best innovations do both.  CHATgpt Generative AI is a contemporary example, where transformative performance has created an enormous amount of word of mouth, but the interface is so intuitive there is little barrier to adoption, at least superficially. 

Of course, using it skillfully is another thing altogether, but I think there is an insight there too.  It’s OK to have an ongoing learning curve after initial adoption, but initial engagement needs to be relatively simple.  The gaming industry are masters of this.    

Little Wows!  CHATgpt is brilliant innovation.  But realistically, few of us are gong to create something quite that extraordinary.  So how do we manage to create more modest wows that still drive trial, engagement and ultimately repeat business?

Science, Art and Analogy:  As a believer that a lot of interesting things happen at the interface between science and art, and that analogy is a great tool, I think we cam learn a little about solving this by taking insight from the arts.  In this case, music and movies. For example, popular music routinely plunders the familiar, and repackages it as new via cover versions.  I often do the same myself!   Movies do something similar, either with the cycle of remakes of classic movies, or with sequels that often closely follow the narrative structure of the original.  

But this highlights some of the challenges in solving this dichotomy.  It’s rare for a remake, cover version, or sequel to do better than the original.  But a few do, so what is their secret?  What works, and what doesn’t? 

  1. Distance from the original.  Some of the best movie remakes completely reframe the original in ways that maintain a largely implicit familiarity, but do so without inviting direct comparisons of alignable differences to the original. For example, West Side Story is a brilliant retelling of Romeo and Juliet, Bridget Jones Diary reframes Pride and Prejudice, She’s All That is a retelling of George Bernard Shaw’s Pygmalion, while The Lion King retools Hamlet, etc.  I’m not suggesting that nobody sees these connections, but many don’t, and even if they do, the context is sufficiently different to avoid constant comparisons throughout the experience.  And of course, in most of these cases, the originals are not contemporary, so there is temporal as well as conceptual distance between original and remake.   Similarly with cover versions, Hendrix and the Byrds both completely and very successfully reframed Dylan (All Along the Watchtower and Mr. Tambourine Man).  Sinead O’Connor achieved similar success with Prince’s “Nothing Compares 2 U”.  For those of you with less grey in their hairl, last summers cover of Tracy Chapman’s ‘Fast Car’ by Luke Combs shows that covers can still do this. 

2.  Something New.   A different way to fail is to tap familiarity, but without adding anything sufficiently new or interesting.  All too often covers, sequels and remakes are simply weaker copies of the original.  I’m sure that anyone reading this can come up with their own examples of a disappointing remake or sequel.   Footloose, Annie, Psycho, Tom Cruise’s the Mummy or Karate Kid are all candidates for me.  As for sequels, again, I’m sure you can all name a respectable list of your own wasted 2 hours, with Highlander 2 and Jaws the Revenge being my personal cures for insomnia.   And even if we include novelty, it cannot be too predictable either.  It needs to at least be a little surprising.   For example, the gender reversal of the remake of Overboard has a point of difference in comparison to the Goldie Hawn original, but its not exactly staggeringly novel or surprising.  It’s a lot like a joke, if you can see it coming, it’s not going too create a wow.    

3.  Don’t Get De-Selected.  Learning from the two previous approaches can help us to create sufficient separation from past experience to engage and hopefully delight potential consumers.  But it’s important to not get carried away, and become un-tethered from familiarity.  For example, I personally enjoy a lot of jazz, but despite their often extraordinary skill, jazz musicians don’t fill many arenas.  That’s in part because jazz asks the listener to invest a lot of cognitive bandwidth and time to develop an ‘ear’, or musical expertise in order to appreciate it. It often moves a long way from the familiar original, and adds lot of new into the equation.  As a result, it is a somewhat niche musical form.  Pop music generally doesn’t require the same skill or engagement, and successful artists like Taylor Swift understand that.   And when it comes to innovation, most of us want to be mainstream, not niche. This is compounded because consumers today face a bewildering array of options, and a huge amount of information.  One way our brains have evolved to deal with complexity is to quickly ignore or ‘de-select’ things that don’t appear relevant to our goals. A lot of the time, we do this unconsciously.  Faced with more information than we can process, we quickly narrow our choices down to a consideration set that is ‘right-sized’ for us to make a decision.   From an innovation perspective, if our innovations are too ‘jazzy’, they risk being de-selected by a majority on consumers before they can be fully appreciated, or even consciously noticed.     

There’s no precise right or wrong strategy in this context. It’s possible to deliver successful innovations by tapping and balancing these approaches in many different ways.   But there are certainly good and bad executions, and I personally find it helpful to use these kinds of analogy when evaluating an innovation.   Are we too jazzy? Do we have separation from incumbents that is meaningful for consumers, and not just ourselves? And the latter is a real challenge for experts. When we are deeply engaged in a category, it’s all too easy to get lost in the magic of our own creations.  We see differences more clearly than consumers. It’s easy for us to become overly excited by relatively small changes that excite us, but that lack sufficient newness and separation from existing products for consumers who are nowhere near as engaged in our category as we are.  But it’s also easy to create ‘jazz’ for similar reasons, by forgetting that real world consumers are typically far less interested in our products than we are, and so miss the brilliance of our ‘performance’, or perhaps don’t ‘get it’ at all. 

For me, it is useful to simply ask myself whether I’m a Godfather II or a Highlander II, a Taylor Swift or a Dupree Bolton, or even Larry Coryell.  And there’s the rub.  As a musician, I’d rather be Larry, but as a record company exec, I’d far rather have Taylor Swift on my label. 

Image credits: Wikimedia Commons

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Top 10 Human-Centered Change & Innovation Articles of March 2024

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Top 10 Human-Centered Change & Innovation Articles of March 2024Drum roll please…

At the beginning of each month, we will profile the ten articles from the previous month that generated the most traffic to Human-Centered Change & Innovation. Did your favorite make the cut?

But enough delay, here are March’s ten most popular innovation posts:

  1. Agile Innovation Management — by Diana Porumboiu
  2. How to Re-engineer the Incubation Zone — by Geoffrey A. Moore
  3. It’s Not Clear What Innovation Success Is — by Robyn Bolton
  4. How Do You Know If Your Idea is Novel? — by Mike Shipulski
  5. How to Tell if You Are Trusted — by Mike Shipulski
  6. Innovation is Rubbish! — by John Bessant
  7. Celebrating the Trailblazing Women Pioneers of Innovation — by Art Inteligencia
  8. Thinking Differently About Leadership and Innovation — by Janet Sernack
  9. The Remarkable Power of Negative Feedback — by Dennis Stauffer
  10. 10 CX and Customer Service Predictions for 2024 (Part 1) — by Shep Hyken

BONUS – Here are five more strong articles published in February that continue to resonate with people:

If you’re not familiar with Human-Centered Change & Innovation, we publish 4-7 new articles every week built around innovation and transformation insights from our roster of contributing authors and ad hoc submissions from community members. Get the articles right in your Facebook, Twitter or Linkedin feeds too!

Have something to contribute?

Human-Centered Change & Innovation is open to contributions from any and all innovation and transformation professionals out there (practitioners, professors, researchers, consultants, authors, etc.) who have valuable human-centered change and innovation insights to share with everyone for the greater good. If you’d like to contribute, please contact me.

P.S. Here are our Top 40 Innovation Bloggers lists from the last four years:

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Good Intentions Pave the Way to Innovation Hell

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The road to hell is paved with good intentions, and nowhere is that more true than in innovation.

Good Intentions Pave the Way to Innovation Hell

GUEST POST from Robyn Bolton

That’s one of the insights I took away from InnoLead’s Q1 report on corporate innovation priorities.  The report is an eye-opening look at the impact of AI on corporate innovation as experienced by corporate entrepreneurs themselves.  But before deep diving into that topic, the report’s authors shared intriguing data about member companies’ innovation structure, leadership engagement, organizational connections, and results. Nestled amongst the charts were several that, when taken together, got my Spidey senses tingling.

61.0% of innovation teams are “directly under a high-visibility leader with a broad company focus.”

This is great because innovation needs senior leaders’ support and active engagement to survive, let alone survive for long enough to produce meaningful results. Add this to the fact that 45% of senior leadership teams frequently discuss the “progress and value of the innovation program,” and all signs point to innovation as a strategic priority.

But (you knew there was a but, didn’t you)…

If “broad company focus” means “no P&L responsibility,” we have a problem.  In every for-profit company I’ve worked for and with, people with P&L responsibility have greater power, influence, and access to resources than people without a P&L.  This division may not feel fair, but it makes sense – the people who bring in profit and revenue will always be more influential than people who represent “cost centers.”

You can see the impact of P&L owners who are, understandably, focused entirely on delivering short-term results throughout the report – 75% of companies have shifted their focus more towards near-term priorities, and 61% shifted their innovation portfolio away from Horizon 3 (also known as radical, breakthrough, or disruptive innovation).

As for all those discussions, it’d be great if they focused on walking the talk of innovation. But suppose it’s only innovation platitudes or, worse, questioning innovation’s ROI. That doesn’t bode well for the “high-visibility leader with broad company focus,” the innovation team, or the company’s culture.

71.2% of innovation teams’ customers or business partners are unaware of the team’s existence, don’t engage, or engage only occasionally.

Welcome to Innovation Island!  Where the cool people work on cool things in cool offices while all you drones slave away doing the same thing you’ve always done and making the money that pays for the cool people to do cool things in their cool offices.

I’m sure this isn’t the message the innovation team intends to send, but it’s the one received by most organizations.

When arguing for Innovation Island, managers often point to the organizational antibodies likely to swarm and kill H3/radical/breakthrough innovation and even some H2/adjacent innovations.  They’re right, and those innovations must be “protected.” But not every innovation needs protection.  H2 and certainly H1 innovations, where most portfolios are now, should be shared with the core business because the core business will eventually run them.

The bigger problem, in my opinion, is that innovation teams don’t seem to be reaching out to others in the organization.  Like the P&L owners they report to, people in the core business are busy running the business and generating revenue.  Very few have the time or energy to seek out the innovation team to discuss and explore innovation.  Companies that want to build a culture of innovation need to turn their innovators into evangelists, not residents of an island connected to the mainland by a single drawbridge.

23.4% of innovation teams are considered outsiders or actively undermined by other functions and business units.

This may not sound bad, but add to it the 55.0% that are “somewhat integrated with occasional collaboration” with other departments and business units, and you may be tempted to believe that Innovation Island would be wise to invest in a surface-to-air missile defense system.

Sadly, this perception of the innovation team as “The Others” isn’t surprising when considering that the most important tactic for building a relationship between innovation and the functions or business units is already having strong relationships and interpersonal trust (75.3% of respondents).  The least effective (4.7% of respondents) is “writing down shared objectives and expectations.”  So, no, the email you sent is not enough to win friends and influence people.

Bottom line

Well-intended companies appoint a senior executive to lead the innovation team because they’ve been told that doing so is powerful proof that innovation is a strategic priority.  They hire outsiders to inject new thinking into the organization because they know that “what got you here won’t get you there.”  They cordon the team and their work off from the rest of the organization because they read that separation is essential to preserving innovation’s disruptive nature. 

But if the senior executive doesn’t have the organizational power and influence that comes with P&L ownership, the team doesn’t have strong personal relationships with others in the business, and other functions and business units don’t know the team exists or how to interact with it, innovation will go nowhere.

But that’s better than where it could go.

Image credit: Unsplash

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Transformation is Human Not Digital

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Transformation is Human Not Digital

GUEST POST from Greg Satell

A decade ago, many still questioned the relevance of digital technology. While Internet penetration was already significant, e-commerce made up less than 6% of retail sales. Mobile and cloud computing were just getting started and artificial intelligence was still more science fiction than reality.

Yet today, all of those things are not only viable technologies, but increasingly key to effectively competing in the marketplace. Unfortunately, implementing these new technologies can be a thorny process. In fact, research by McKinsey found that fewer than one third of digital transformation efforts succeed.

For the most part, these failures have less to do with technology and more to do with managing the cultural and organizational challenges that a technological shift creates. It’s relatively easy to find a vendor that can implement a system for you, but much harder to prepare your organization to adapt to new technology. Here’s what you need to keep in mind:

Start With Business Objectives

Probably the most common trap that organizations fall into is focusing on technology rather than on specific business objectives. All too often, firms seek to “move to the cloud” or “develop AI capabilities.” That’s a sure sign you’re headed down the wrong path.

“The first question you have to ask is what business outcome you are trying to drive,” Roman Stanek, CEO at GoodData, told me. “Projects start by trying to implement a particular technical approach and not surprisingly, front-line managers and employees don’t find it useful. There’s no real adoption and no ROI.”

So start by asking yourself business related questions, such as “How could we better serve our customers through faster, more flexible technology?” or “How could artificial intelligence transform our business?” Once you understand your business goals, you can work your way back to the technology decisions.

Automate The Most Tedious Tasks First

Technological change often inspires fear. One of the most basic mistakes many firms make is to try to use new technology to try and replace humans and save costs rather than to augment and empower them to improve performance and deliver added value. This not only kills employee morale and slows adoption, it usually delivers worse results.

A much better approach is to use technology to improve the effectiveness of human employees. For example, one study cited by a White House report during the Obama Administration found that while machines had a 7.5 percent error rate in reading radiology images and humans had a 3.5% error rate, when humans combined their work with machines the error rate dropped to 0.5%.

The best way to do this is to start with the most boring and tedious tasks first. Those are what humans are worst at. Machines don’t get bored or tired. Humans, on the other hand, thrive on interaction and like to solve problems. So instead of looking to replace workers, look instead to make them more productive.

Perhaps most importantly, this approach can actually improve morale. Factory workers actively collaborate with robots they program themselves to do low-level tasks. In some cases, soldiers build such strong ties with robots that do dangerous jobs that they hold funerals for them when they “die.”

Shift Your Organization And Your Business Model

Another common mistake is to think that you can make a major technological shift and keep the rest of your business intact. For example, shifting to the cloud can save on infrastructure costs, but the benefits won’t last long if you don’t figure out how to redeploy those resources in some productive way.

For example, when I talked to Barry Libenson, Global CIO of the data giant, Experian, about his company’s shift to the cloud, he told me that “The organizational changes were pretty enormous. We had to physically reconfigure how people were organized. We also needed different skill sets in different places so that required more changes and so on.”

The shift to the cloud made Experian more agile, but more importantly it opened up new business opportunities. Its shift to the cloud allowed the company to create Ascend, a “data on demand” platform that allows its customers to make credit decisions based on near real time data, which is now its fastest growing business.

“All of the shifts we made were focused on opening up new markets and serving our customers better,” Libenson says, and that’s what helped make the technological shift so successful. Because it was focused on business results, it was that much easier to get everybody behind it, gain momentum and create a true transformation.

Humans Collaborating With Machines

Consider how different work was 20 years ago, when Windows 95 was still relatively new and only a minority of executives regularly used programs like Word, Excel and PowerPoint. We largely communicated by phone and memos typed up by secretaries. Data analysis was something you did with a pencil, paper and a desk calculator.

Clearly, the nature of work has changed. We spend far less time quietly working away at our desks and far more interacting with others. Much of the value has shifted from cognitive skills to social skills as collaboration increasingly becomes a competitive advantage. In the future, we can only expect these trends to strengthen and accelerate.

To understand what we can expect, look at what’s happened in the banking industry. When automatic teller machines first appeared in the early 1970s, most people thought it would lead to less branches and tellers, but actually just the opposite happened. Today, there are more than twice the number of bank tellers employed as in the 1970s, because they do things that machines can’t do, like solve unusual problems, show empathy and up-sell.

That’s why we need to treat any technological transformation as a human transformation. The high value work of the future will involve humans collaborating with other humans to design work for machines. Get the human part right and the technology will take care of itself.

— Article courtesy of the Digital Tonto blog and previously appeared on Inc.com
— Image credits: Dall-E via Bing

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The Innovation Enthusiasm Gap

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The Innovation Enthusiasm Gap

GUEST POST from Howard Tiersky

Getting new innovations launched within companies of any significant size typically requires buy-in from a number of different people and groups around the organization.

And moving towards a “culture” of innovation that the most successful companies create definitely requires that there be a critical mass of people with common understanding of the value of innovation.

Different Attitudes Towards Innovation

In any given enterprise there are generally many people who are hungry for the excitement of innovation and at the same time there are often many people who are resistant. Innovation, after all, inherently means change. And while change is viewed by some as exciting, challenging and fun, others view change as risky, scary and something to be avoided wherever possible.

Understanding how to segment your key stakeholders at all levels of an organization based on their appetite and attitude towards change is very helpful in devising a plan to “bring along” as many people as possible on the innovation bandwagon. All people are unique and hold certain beliefs and attitudes for a variety of reasons including their personality, past experiences, and reward constructs. But we’ll talk about one high level trend that we have found to apply in most cases regarding how to gauge the likelihood that people will have initial enthusiasm for innovation based on their level in the organization. This is not the only way of slicing the onion to predict who will favor vs resist innovation, this is just one model, but it’s the one we’ll focus on in this article.

The Innovation Enthusiasm Inverted Bell Curve

The Inverted Bell Curve

While we have no quantitative research to support this, we have generally observed an inverted bell curve trend as it applies to “Innovation Enthusiasm.” Let’s consider three basic groups:

  1. The company leadership team: Primarily the CEO, but also the other members of the leadership team (CFO, COO, COO etc) who are held directly responsible for the company’s success.
  2. The “troops”: The bottom couple of tiers of the organization that typically make up 90% of the employees
  3. The managers: Specifically the middle to upper level managers. These may be department heads, marketing executives, product managers — people who have achieved some level of status and success within the organization’s hierarchy but who are not at the top level.

So lets take these groups one at a time.

CEOs Like Innovation

The vast majority of CEOs of large enterprises recognize that innovation is essential to their company’s success and consequently essential to their success and continued tenure as CEO.

Why is this the case? A CEO’s job is to grow a company. In most cases, A CEO whose company is not growing is a CEO who is soon to be fired. And growth almost always requires innovation. Why? Well let’s be a bit simplistic and say there are two primary market conditions in which a company can find itself — a market which is not fundamentally growing and one which is.

In a market that is fundamentally not growing, the three main ways that a company can grow would be for it to:

  1. Out-innovate competitors so as to take their share
  2. Move into new product categories or businesses
  3. Acquire competitors

All three of these require some level of innovation. Number one is obviously about innovation. Number two requires a healthy amount of innovation around creation of new capabilities. And even number three, the seeming least innovative of the three, still usually requires innovation from a scale management perspective.

In a market that is fundamentally growing, sitting back and riding the “rising tide” is not necessarily the key to growth. Innovation is also critical for a company to grow in the midst of a strong market. Successfully riding the rising tide requires innovation. Why?

  • Substantial scaling requires innovation – As markets increase in size, a company may find that in order to take full advantage of the scale of the opportunity they need to be able to serve 2x, 10x, even 100x the customers or orders they did previously. That level of scaling generally requires a substantial change to how business is done. Apple has had to be just as innovative in their supply chain and distribution approach as they have had to be with their product development in order to capitalize on the success in the growing market for mobile devices.
  • Growing markets attract disruptors – If the market demand for a product or service is surging, that tends to attract investment and competitive innovation. If the market is growing but a competitor out-innovates you, you might find yourself shrinking even though the market is growing. Consider Research in Motion.

So a CEO has every reason to like innovation. Does a CEO have any reason to fear innovation? Not much. Innovation isn’t always successful, however most boards are far more patient with a CEO who is innovating and not finding success than they are with a CEO who isn’t innovating at all. Furthermore, even unsuccessful innovation gives a CEO something to tell his board and investors to keep them optimistic about the future, so even innovations that are unsuccessful in the market can, for a while at least, keep a stock price up which is, after all, a CEO’s main performance metric.

The Troops Like Innovation

We’ll call the 90%+ of employees of a given company, the “troops”. While of course nothing is absolute, troops, on the whole, tend to like innovation. Why?

  • They want the company to be successful – They can see that changing with the times and bringing new products to market will help the company. They take pride in the brand and they know that financial success and growth means job security and raises, and that their long term job security will be in danger if the company doesn’t keep up with the times.
  • It can help them serve the customer better – Troops who face customers directly most of the time want to do their job as well as possible since part of their job satisfaction can be the direct and immediate feedback they get when interacting with the end-customers.
  • It creates opportunity – For ambitious people lower down in the organization, change creates new needs and new opportunities which could accelerate their rise.
  • Its exciting and interesting – Lots of jobs are boring. Change creates interest.

There are certain types of change that can be threatening to the Troops; such as innovation via overseas outsourcing or automation that eliminates employees, so those are exceptions. There definitely are also members of the troops who tend to fear and resist change as a first reaction, however at most companies these are the minority. Properly communicated innovation initiatives that don’t have an obvious or direct threat to employees job security is generally embraced by the majority of the troops.

Managers Don’t Really Like Innovation

So if The CEO’s like innovation, and the troops like it, whats the problem? You have both the top leadership of the company and the overwhelming majority of the employees ready to embrace innovation, surely that should be enough, right? It’s not. We see over and over again CEOs who feel stuck because they are asking their “people” to innovate and its just not happening. What we find at many companies is that despite being encouraged by the CEO and top management, most middle and upper-level managers have limited reasons to be motivated to truly innovate in a dramatic way. Why is this the case?

Change creates risk. Middle and upper-level managers have the most “stake” in the status quo – they have the most to lose. Middle and upper-level managers tend to own processes and products. When new processes and products arise to potentially replace their existing fiefdom, managers will often do their best to ensure that they wind up with the same scope of responsibility, the same budget and the same number of direct reports. While its possible for managers to move up in a new order, very often a “bird in the hand” mentality among managers encourages a stance which is about defending the status quo and supporting “innovations” which inherently work within the existing structure. Ultimately, this often means only very incremental innovations.

One might think that middle and upper managers have the same loyalty to the company and shared interest in the company’s overall success, but in our experience this is not quite so. Individuals generally rise to these ranks because they are fairly savvy and that savviness generally extends to the recognition that their personal career success is not necessarily tied to the company overall. For example a product manager with a successful product at a company which overall is going down the tubes can, at the right moment, jump ship and leverage their demonstrated track record of success. However an individual who becomes marginalized by change at their current company (or simply winding up with reduced responsibilities), while they certainly can still move to another position, is all of the sudden playing defense.

Furthermore, that mindset of innovation “within the current structure” is then telegraphed to their team members. Its common for the troops to realize that the CEO wants dramatic improvements based on his communications, however if lower level employees also perceive that the head of their department is looking to not rock the boat too much, the troops may ultimately shift their loyalty to the manager who conducts their performance evaluation, decides their increases and determines promotions.

The truth is that collectively within an organization, while the CEO might be the single most powerful individual in terms of influencing the organization, the middle and upper-level managers are the most powerful layer, so if they are not embracing of innovation, they can stifle it fairly easily, no matter what the CEO’s and troops’ wishes may be.

Rogues

However, we do see in most organizations that there are “rogue” upper and middle managers who buck the trend. They are either passionate about the company or just turned on by the new and innovative to such an extent that it makes sense for them to take the risk and go “all in” in support of massive innovation. We see that typically about one in twenty middle and upper-level managers are of this type. These individuals can be a key to turning the tide, however there is great risk that these mavericks will face such pressure from their peers in an organization that they either stifle their own tendencies, or more likely, leave for an organization where the culture is more welcoming of innovation. By allowing this “weeding out” of the true innovators at the middle and upper-level management layer, the ratio of rogues can drop from one in twenty to one in a hundred or even less.

Summary

Here is a summary of the attitudinal tendencies. Remember, there are always outliers, this model is only meant to help provide understanding around how different circumstances and levels of risk and reward from change influence people differently at different levels.

CEO + Leadership Team​

Leadership TeamAttitude: Favor innovation that drives up stock price. Often has sense of urgency.

Risk: The risk is not innovating. CEOs must drive growth which usually requires innovation. If the CEO does not drive growth he, and his immediate reports, are likely to be looking for new jobs.

Reward: Even the appearance of innovation (say, an improved product pipeline) can give a CEO room to breathe with a board and investors as it creates optimism. True innovation at the Apple or WalMart level of course creates superstar CEOs.

Troops

TroopsAttitude: Tend to be open to the idea of innovation except when it is targeting outsourcing, staff reductions, or automation which risks their job.

Risk: The biggest risk in typical organizations is that “getting involved” with innovation projects might be seen as negative by the middle and upper managers by whom troops are evaluated.

Reward: The rewards are greater job security if innovation is successful as it helps the whole company as well as the ability to better serve customers an

Middle-Upper Management

ManagersAttitude: Tend to resist innovation or seek to compartmentalize innovations that do not jeopardize the organizational structure

Risk: The risk is that true innovation might change the organization so completely that their current position or its level of power, budget or scope would be jeopardized.

Reward: The potential exists for a middle/upper manager to “break out” and prove themselves a superstar by innovating. However most innovation requires collaboration with peers and if they cannot find willing partners in their peers their likelihood of failure is so high that the rewards seems unattainable. For middle/upper managers who are naturally inclined towards innovation despite the risks, the rewards are more emotional—they thrive on either improving things, helping their company or being a part of something new and exciting.

This article originally appeared on the Howard Tiersky blog
Image Credits: Howard Tiersky

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Easter Sale on Charting Change

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Easter Sale on Charting Change

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It is Possible to Have Too Much

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It is Possible to Have Too Much

GUEST POST from Mike Shipulski

When your best isn’t good enough, how do you feel? When your best isn’t good enough, what do you do? But more importantly, when your best isn’t good enough, what does that say about you?

If your best used to be good enough and now it isn’t, there are three possible explanations:

  1. Expectations increased and your performance is unchanged.
  2. Expectations increased and your performance increased less.
  3. Expectations increased and your performance decreased.

If expectations of your performance haven’t increased over last year, I want to work where you work because your company is an oasis (and an aberration). Since nearly all industries and occupations are governed by the unnatural mindset of growth-year-on-year-no-matter-what, it’s highly likely your performance expectations have increased. There’s no need to review this scenario.

In scenario one, your performance is unchanged. Why? Well, you may have tried to increase your performance but issues unrelated to work have consumed huge amounts of your emotional energy, and this new drain on your emotional energy consumed the energy you needed to increase your performance. A list of such issues includes global warming, deforestation, plastic in our water supply, COVID, political unrest, and the regular issues such as medical care for aging parents, death of your parents, inevitable health issues related to your aging. What does that say about you?

In scenario two, your performance increased, but the increase was insufficient. Maybe your performance would have increased quite a bit, but the special cause issues (COVID, etc.) along with the common cause issues (you and your parents get older every year) impacted your performance in a way that lessened the increase in your performance. Without the special causes, you would have met the increased expectations, but because of them, you did not. What does that say about you?

In scenario three, even though expectations increased, your performance decreased. In this case, it could be that political unrest and the other special causes teamed up with the common causes (stress of everyday life) to reduce your performance. What does that say about you?

In thermodynamics, there’s a law whose implications make it certain that there’s a limit to the amount of matter (stuff) you can put in a control volume (a defined volume that has a limit). That means that if every year you add air to a balloon, eventually it pops. Even the strongest ones. And when you extend this notion to people, it says that no matter how much pressure you apply to people, there’s a limit to what they can achieve. And if you apply pressure that overcomes their physical limit, they pop. Even the strongest ones. Or, maybe, especially the strongest ones because they try to take on more than their share.

People have a physical limit, and people cannot indefinitely support a mindset of growth-every-year-no-matter-what. No matter what, people will pop. It’s not if, it’s when. And add in the special causes of COVID, political unrest, and environmental problems and people pop sooner and cannot do what they did last year, no matter what.

And what does all this say about you? It says you are trying harder than ever. It says you are strong. It says you are amazing.

And what does it say about growth-every-year-no-matter-what? It says we should stop with all that, at least for a while.

Image credit: Unsplash

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