Wednesday, February 14, 2018

Innovation Depth makes the Difference

I've been thinking about innovation for a while now, trying to puzzle out why some organizations seem to be able to innovate almost effortlessly while others are more sporadic or face significant innovation challenges.  At some moments in my career I've blamed this phenomenon on lack of breadth - the idea that too many companies shrink innovation activities down to idea generation and rapid evaluation.  This isn't completely wrong, there still is a lack of innovation process breadth and not enough appreciation for the thoughtful exploration and divergence in the 'front end' of innovation, followed by rapid prototyping and realization in the latter stages. 


However, I'm warming to the idea that the real problem with innovation, the real reason so few organizations can perform innovation effectively, is a lack of depth.  Because even if we get the innovation process (steps, activities, tools, methods) right and follow them carefully, a lack of depth constantly slows or distracts innovation teams.


Let's set our definitions


When I'm talking about innovation breadth, I mean from the start of an innovation activity (typically an executive who needs a new product or service or wants to attack an emerging opportunity) through to product or service realization.  Now honestly some of that breadth is in product or service development, not necessarily the responsibility of the innovation team, but to fully count as innovation we need to release a product or service that has impact on customers and the bottom line.


Too few companies have a good understanding of the 'front end' and the important activities and processes, but many can stumble through.  What we need to turn our attention to is the depth question.


When I'm talking about innovation depth I'm talking about capacity building - people with deep skills or experience using the tools and methods defined in the innovation process.  I'm talking about a depth of commitment of those people, who aren't rushed into and out of an innovation activity but can commit the time necessary to do it right.  I'm talking about the depth of commitment of the organization, so that innovation isn't a flavor of the month.  When we talk about innovation depth we are talking about the recognized 'range' of innovation outcomes (I like Doblin's ten types).  Depth also embraces the corporate culture and how it enables or resists innovation, rewards and recognitions and so on.


In other words, innovation breadth is about defining and understanding the end to end process for innovation, the tools, processes and methods and ensuring this is continuous and whole.  Depth is about deciding how capable the innovation process, tools and people are, and how supportive the corporate culture, funding mechanisms and reward structures are, as well as ensuring that people have the necessary time to perform innovation activities effectively.


Sustaining Innovation


Now to the analysis.  Any company at any stage of its existence can stand up a team, define some simple tools and describe an innovation process.  That's not overly difficult, and as evidence shows many companies have done exactly that.  They have a defined process (on paper) and in some cases even a product or service to demonstrate as an outcome.  Frankly most of these processes are incomplete, not well thought out and excuse the pun but paper thin.


Developing the capacity to innovate, building the depth of purpose, skill, experience, time and funding, changing or rethinking rewards and how people are allocated, is a much more purposeful and taxing experience.  It requires real strategic thought because expectations and even the nature of work changes.  This is a real - I almost hate to write this - change management effort, because we are changing the expectations of at least some people, changing how they are tasked, skilled and compensated.


Having the cake without baking it


So, what I'm saying is that many companies want the outcomes of innovation, consistently and reliably, without taking the time to invest in the processes and tools and people who can make the outcomes happen.  This is worse than expecting to have a cake and eat it simultaneously. This is trying to eat the cake without bothering to bake the ingredients, perhaps not even being careful to have the right ingredients in the correct measures. 


I honestly believe these paper thin innovation processes have to change, because they cannot stand up to consistent use.  My expectation is that every company will need to do more and more innovation, and an innovation process without depth simply cannot stand.  The alternatives are to outsource innovation and hope your consultants get it right, or to develop depth in your innovation process to mature it and harden it for more consistent use.
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posted by Jeffrey Phillips at 5:17 AM 0 comments

Monday, February 12, 2018

Will big data solve the innovation gap?

For many companies, I think there is a relatively significant gap between what they actually generate as compelling new products and what they wish they generated.  We could call this the "innovation gap".  The gap is real, and it means that many companies aren't as profitable or as competitive as they'd like to be.  Many of have (in some cases for years or decades) advocated tools and methods as a way to improve the innovation funnel, to create more innovation more readily that had value as new products and services.  To date, there's been some improvement but the innovation gap still remains.


Lately, with the advent of "big data", machine learning and other factors associated with data and more intelligent processes, the argument has been made that these capabilities will solve the innovation gap.  This claim seems to suggest that big data and analytics and machine learning can do a better job in the front end generating new ideas that lead more rapidly to new products and services.  And at some level I agree, but I think placing too much emphasis on big data or machine learning for all of your innovation work is a mistake.


What big data and machine learning could do


Basically, the 'front end' of innovation is an exploration and discovery activity, meant to discover needs and opportunities and assess customer needs in order to generate new ideas that may or may not solve the problem.  Good innovation is both a discovery and a combinatorial effort, which in some regards means that machines and algorithms must be able to parse through more potential combinations than humans can.


The challenge with this thinking is that in many cases, humans create the rules by which the algorithms work, and if humans are often blinkered to new ideas or emerging technologies or unusual combinations, then the algorithms may be as well.  Further, having an algorithm spit out hundreds of potential combinations without the ability to assess their viability or value seems rather meaningless and complicated.  Beauty and efficacy is often in the eye of the beholder.  I never knew I needed or wanted a multi-tool until I got one for Christmas.  And even today, while it's breadth of tools is undeniable, it often sits in my drawer at home, as I suspect many of them do.


There is definitely a place for big data, analytics and machine learning, but I think more as a component of a viable front end process than a replacement.  For at least some time into the future, humans and their ability to connect and assess ideas and identify trends and opportunities will do a better job than machines alone.  Intuition and past experience count a lot, but leveraging the data and insights that big data and algorithms can create will increase value in the front end.


What humans do better


Machine learning is still nascent, and still trying to capture the spark of real intuition and foresight.  This means that today most machine learning is exceptionally good at anticipating and predicting outcomes when the conditions are similar.  This means that for some time into the future, machine learning and algorithms should be able to anticipate incremental innovation demands.  However, I'm not so sure about disruptive needs and opportunities.


Humans are omnivorous connectors.  We are happy to ignore what should be incompatible needs or standards to connect things that don't seem to be connectable.  We connect things in random, often unexpected ways (you got chocolate in my peanut butter) that sometimes lead to spectacular failures and other times lead to amazing successes.  No algorithm could have predicted Steve Jobs and Apple combining MP3 players, digital music and a distribution mechanism called iTunes.  Therefore, companies that focus on machine learning and algorithms in the front end may perfect their incremental innovation and completely ignore disruptive innovation.


Watch this space


With all that I've written above, the capability of the algorithms and machine learning is advancing quickly.  It would not surprise me to find algorithms that get much better at predicting future disruptions and breakthrough innovations that emerge in the next 5-10 years.  Even then there will be a significant human component to understand and place the disruptive opportunity into context.


Fifty years ago we were promised individual jet packs and residence on the moon by the year 2000.  2001 promised a journey by an intelligent AI and astronauts to Jupiter.  Here in the real world some technologies have advanced quickly, but I think more development is necessary before we hand over the innovation reins to AI.  But that doesn't mean machine learning and big data doesn't have a place in the front end now, and those that start incorporating these as an input (not a replacement) to the front end will learn and benefit in ways that will cause others jealousy or regret.



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posted by Jeffrey Phillips at 6:00 AM 0 comments

Thursday, February 08, 2018

Yesterday or Thinking about Tomorrow?

The Beatles (they were a pop group for those of you who cut your teeth on Eminem) wrote jangly songs about yellow submarines and walruses.  It was the 60s, so I guess you had to be there to understand.  They were all about sunny days, happy feelings, a kind of Beach Boys from England with mod outfits and mop top haircuts.  They also had that outrageous Sergeant Pepper phase, but I digress.


The Beatles also had a few melancholy songs, perhaps none more famous than "Yesterday".  Yesterday is a song about looking back with some regret, after realizing that the recent past wasn't so bad, that some opportunities may have been missed.


The Beatles were innovators in rock and roll, introducing a new perspectives, a really interesting competing view of the world between Paul McCartney and John Lennon, introducing eastern musical themes and instruments into rock and roll, and many other innovations.  But for innovators I think the most relevant song they sang was Yesterday.  It's also one of the most covered songs in history.


Why Yesterday?


Missed Opportunities
Yesterday is about missed opportunities, and if anything about innovation is true, all innovators will acknowledge that far too many innovation opportunities are ignored, missed, skipped past.  Too often we don't even become aware of innovation opportunities until someone else has capitalized on the opportunity.  In hindsight all innovation seems evident, but it rarely seemed that way at the time.


Timing
Also, there's a realization in yesterday.  The old joke goes that the best day to start a diet if you want results was yesterday, but the best day to start if you don't want the pain is tomorrow.  If you replace the word "diet" with "innovation" the saying holds.  The best time to have started an innovation activity is almost always "earlier than this" because it takes longer to do good innovation than most people realize, and the opportunities open and close more quickly than most people expect.  However, like dieting, most teams put off innovation until it is an absolute necessity, and then cheat their way through the diet.  The best time to get started with innovation was yesterday, but that doesn't mean we can't start today.


Nostalgia
The final idea that relates Yesterday to innovation is nostalgia.  The singer looks back on missed opportunities and how wonderful the past was.  Likewise, many people and companies tend to look back at the past through rose colored glasses and see only difficulty and challenge in the future.  Innovators know that the best opportunities like in front of us.  Let go of the past, look toward the future with optimism and expectation.


Thinking about tomorrow


In fact, if we are going to stick with a musical theme, the innovator's mantra is Fleetwood Mac's  "Don't stop thinking about tomorrow", always looking forward, always thinking about possibilities.


So, which perspective do you and your team favor? A nostalgic look back, full of regret about the past, clinging to what you have, or a more optimistic view toward the future?  Are you caught up in Yesterday, or thinking about tomorrow?  Innovators will always be thinking about tomorrow.
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posted by Jeffrey Phillips at 5:47 AM 0 comments

Monday, February 05, 2018

Don't forget the steak: What Super Bowl ads forget

There's an old marketing adage that you sell the sizzle, not the steak.  Sell the benefits, not the features.  I wonder, as I watch Super Bowl television ads, how many marketing people have forgotten the basic tenets of their craft.


This isn't to say that the ads aren't catchy, funny, endearing and often engrossing.  But sometimes the ads are so interesting or so well developed that they neglect to tell us what they are for.  In other words, watching these ads makes me think that we've completely lost the steak in all the sizzle.


A good example is Tyrion (Peter Dinklage) up against the voice of god himself (Morgan Freeman).  The rap battle was great, but the products they were featuring were barely acknowledged.  It's as if we are supposed to buy the products because of the really interesting advertising, rather than the benefits they provide.


What's this diatribe got to do with innovation?


Going through the elaborate motions


As a blogger and consultant I make a living talking about the importance of innovation process, that innovation is a repeatable business process that any company can learn and master.  So I have to tread the razor's edge here when I say increasingly corporate innovation looks a lot like Super Bowl advertising.  Too much focus on the sizzle and not nearly enough on the steak.  Alex Osterwalder has taken to calling this "innovation theater", where the players do their bit, act out innovation roles but in the end we are left with nothing but an empty set.


Let me be clear:  innovation processes, defined workflows, fully understood tools and methods, are vital to doing good innovation, but increasingly what we see is Potemkin Village innovation (if you'll excuse the introduction of another analogy), a false front dressed up to look great, but with very little going on behind the scenes, and no results.


Many innovation teams are going through elaborate motions, adopting many techniques on the surface but not fully understanding them, or doing the exploration and deep thinking and discovery necessary to develop breakthrough ideas and products.  There's a lot of activity, reference to interesting tools and methods, some templates are completed and with a lot of fanfare, ice breaking and sometimes yoga.  But in the end, there aren't any interesting or valuable ideas.


What's missing


What's missing from this elaborate kabuki theater is actual commitment to investigate needs, understand future trends and draw conclusions about emerging markets and needs.  What's missing is the desire to put in the work to change the existing business model, disrupt existing revenue streams and products.  Innovation will often spin off into elaborate motions when people realize just how much and how radical the change is that's needed.  Once the realization happens, it's easier to go through the motions, to call on Peter Dinklage and Morgan Freeman to rap battle, than it is to say exactly why Doritos or Mountain Dew is so much better, or tastier, or healthier, or less expensive, than other alternatives.


 And yes I get the fact that Dinklage being on fire means the new Doritos are spicy or that everything Freeman touches turns to ice means that the Mountain Dew flavor he was advocating (which one was it?) is cooler or more refreshing.  And this is where the analogy breaks down.  When you are marketing, subtle signals may reinforce value propositions for the potential customer.  Other than discovering customer needs, there's nothing subtle about innovation.  It's not called "creative destruction" for nothing.  You can't wink wink nudge nudge innovation.  It requires commitment, willingness to change and to overturn existing markets, customers and revenue streams.


I love the Super Bowl ads, don't get me wrong, but I think you could easily insert the logo of a different company into many of the ads and the ads would achieve about the same effect.  They are too subtle, too full of themselves to do any good except for the advertising agencies that create them.  Likewise, a lot of innovation is too subtle, and too resistant to change, to do any good.  It becomes innovation theater, and we need to go back to the basics to create really compelling products.
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posted by Jeffrey Phillips at 5:11 AM 0 comments

Tuesday, January 30, 2018

Expecting or Reacting to innovation

I'm a bit mystified this morning, mystified by the fact that so many people I interact with are constantly talking about innovation, and how often they are surprised by it or overtaken by events.  The word innovation seems to be on everyone's lips, is constantly in the news, but somehow the concepts behind these words never go beyond the surface.  Why is it that smart people who are constantly speaking about innovation and hearing about innovation are so often overtaken by innovation?


I'm of the opinion that many people in the business world have sacrificed a significant portion of the proactive selves in order to operate in as efficient a manner as possible.  Years, no decades of work on right-sizing, outsourcing, Lean, Six Sigma and a host of other solutions has made modern business exceptionally efficient, and exceptionally reactive.  We no longer seem to possess the entrepreneurial spirit, risking even a little bit to gain even more.  Instead many people seem content to file an exception report when things go wrong, and take corrective action to remediate any issue.


It's time to get proactive


In the recent past, when you might have had a chance to respond quickly to a competitor's new offering, being reactive to innovation made some sense.  You could wait for someone else to prove a technology or market, establish price points and channels, and then swoop in after the market was proven.  Let someone else take the risk was the mantra.  Those days are over.


In those days you had a handful of well-known competitors and a much more slowly evolving market.  Today, you have dozens of competitors, popping up and disappearing all the time, in all regions, and the pace of change and customer expectations have both accelerated.  You cannot win by waiting.  You must shift your innovation perspective from reacting to innovation to expecting to lead.


Expectations


Setting and living out expectations is vital in any human endeavor.  Understanding the level, intensity and scope of work helps people gear up for the work to come.  When we allow passive, reactive expectations to creep into our thinking, we sacrifice a lot of opportunity.  As noted, in the past that may not have been a problem, but now it is. 


Executives and managers need to set the tone.  We need to create new expectations about our business models and how we'll compete.  We need to be far more proactive, exploring new opportunities, discovering new technologies and taking new risks.  There are far more companies doing this far more regularly than you expect.


Introducing a mind shift


What we are talking about here is a mind shift, shifting from a more passive and reactive model of thinking about innovation (which is what allows smart people who hear about innovation to be constantly surprised by it) to a much more proactive, risk-taking model of thinking about innovation, constantly asking what innovation is next and how do we win.  This means, and you know this, a lot of innovation success is tied to corporate and organizational thinking, communications, goal setting and culture.  The culture that embraces movement, change, uncertainty, exploration and proactive innovation is the one that is going to survive.  Those companies where the cultures resist these concepts are in a bad way.


If we queried your teams, what would they say is their state of readiness and expectation?  Would they say they are capable of reacting to innovation when they see it, or would they say they are taking the steps to proactively introduce innovation?  This simple question may tell you all you need to know about the future success of your organization.
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posted by Jeffrey Phillips at 5:30 AM 0 comments

Tuesday, January 23, 2018

Why we should expect more disruptive innovations

I've used the example of Tower Records before - a behemoth astride the recording industry - brought low very quickly by a sudden shift in music distribution. The shift from physical media to digital media, and the shift from albums to songs as the distribution format made Tower suddenly obsolete. Similarly, Blockbuster experienced almost the exact same disruption. Using a business model based on real estate and limited selection of the top hits, Blockbuster was wiped out by a company with few tangible assets, no retail presence and an exceptionally broad catalog - Netflix.


What these two examples have in common is a rapid, sudden change brought about by innovation. In one case the innovation was in media, and in the other case the innovation was in business models and channels. What we ought to be paying attention to, however, is the amount of rapid change that's occurring everywhere - in every industry, in every function and every geography. The fact of the matter is, Schumpeter's 'creative destruction' will occur more rapidly and more frequently, and we need to be anticipating disruptive innovation, if not simply welcoming it and accepting it.


Drivers of Disruptive Innovation


What are the emerging drivers of more and more disruptive innovation? I think there are at least three key drivers:
  1. Ubiquitous information:  in the past, a new technology or solution took time to gain traction in a specific market.  Now, a compelling new technology or solution can be available to broad swathes of the world's population almost immediately.  Information travels very quickly, and people recognize a compelling solution to an existing problem and can adopt it relatively quickly
  2. Technology platforms:  They can adopt new technologies quickly because increasingly we have the platforms that new ideas are built on.  It took over 50 years for the telephone to reach widespread usage in the US, mostly because the cost of distribution in large, empty geographies.  But once those lines exist, voice, data and internet adoption were much more rapid because they were built on existing platforms. 
  3. International monetary flows:  There are fewer and fewer barriers to acquiring goods and services in almost any country.  We can quickly start a business and start competing in other geographies thanks to the internet and the global banking system. 
There are probably more drivers - in fact I'm sure there are - but you get the point.  Emerging societal, governmental, economic and technology trends are creating more and more opportunity for radical disruption of products, companies and industries.



In short, people can become aware of new ideas more quickly, adopt them more readily because of their existing infrastructure (and their increasing knowledge and experience of technology) and because global distribution and payment programs have progressed so quickly.


What does this mean for innovators?


What this means is that we should expect to see companies like Blockbuster, Tower Records and Kodak (as past examples) and their key solutions and technologies get disrupted by new entrants more frequently and more consistently.  New solutions will emerge - some will be valuable and will more quickly disrupt the status quo, while others will simply create incremental solutions and other introductions will fail.  That's the natural order of things.  But the number and frequency of "disruptions" will only go up, and perhaps exponentially due to the factors identified above and other ones.


This means as innovators we need to be constantly surveying the marketplace, identifying emerging trends and unmet needs, identifying who is creating really compelling new solutions and what may happen if those solutions scale quickly and become disruptive.  We need to find these opportunities for ourselves, and become much more adept at innovating faster and faster.  The days of long product lifecycles and safe markets are over. 


Past responses aren't good enough


In the past, to block disruptive innovation many companies would build walls, or barriers, or attempt to create customer 'lock-in'.  Rather than compete with new ideas and solutions they'd create barriers to resist change or slow customer adoption.  These defensive approaches simply aren't good enough.  For one reason, they don't create new ideas.  For another, they embed a defensive mindset rather than a creative, offensive and proactive mindset that is required to win in the emerging environment.


Whether you set out to disrupt a market or industry when you innovate is almost beside the point.  Customers and their adoption of your ideas will determine how influential or disruptive your products and services will be.  But you must enter this market expecting more and more disruption - not just of products but of companies and perhaps industries.  Doing that will create the urgency you need to not just sustain business but to thrive.
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posted by Jeffrey Phillips at 6:24 AM 0 comments

Friday, January 19, 2018

Why you should work with an innovation consultant

OK, here comes the pitch.  I'm an innovation consultant.  I've been working in the innovation space for over 12 years.  I have a somewhat (cough) vested interest in writing a blog post about why you should work with an innovation consultant.  Of course if you happen to select this particular consultant you'll be exceptionally successful, but there are some other perfectly acceptable consultants out there.  But I digress.


The real purpose of this blog is to answer the question:  why should I work with an innovation consultant?  There are more answers than I'll have time for in this post, but rest assured I'm always happy to discuss if you have questions.


Your team needs new tools and skills
If your team has been tasked with creating new, innovative products or services, take a few days and introduce or build new skills and tools.  Trying to innovate with the existing tools and processes will only result in incremental change at best and a really frustrating experience.  Working with consultants who can identify your team's strengths and needs and provide training and recommend appropriate tools will help you do more innovation more effectively.  History and evidence prove that you cannot do good innovation work with existing tools and methods, and probably won't be successful trying to find and implement the thinking and tools yourself.


Your team needs new ideas or perspectives
Even if you are experts at innovation tools and processes, you may be mired in groupthink.  Or your team simply has a difficult time thinking beyond its existing products and services.  Something that any consultant can bring is a vital outside perspective.  Ideally consultants bring experiences that transfer clients and industries.  They see and interpret patterns that may be unfamiliar to your team.


Your team doesn't have good insight into client needs or future states
Far too many teams don't have access to actual customers, or worse do have access but don't know how to provoke good conversations and harvest important unmet needs.  Worse, few companies do a good job of understanding the emerging expectations and needs of customers they don't serve or spotting trends that will upend their industries.  In many organizations this isn't someone's job so it doesn't get done.  Good innovation depends on understanding unmet needs and emerging trends.


Your team has insights but cannot generate ideas
You were probably expecting this one earlier.  This is where many innovation consultants get called in, and most can provide this function - helping generate more and better ideas.  But without good insights, good tools and new perspectives, even an expert idea generation team can't get good ideas if the inputs aren't good.  Yes, this is a role where innovation consultants can offer value, but you'll get more value if they are involved in the earlier activities.


You want to build skills
Some innovation consultants will also double as trainers - teaching you methods and skills.  Ideally you'll define an innovation process and link innovation tools to the process, rather than simply get educated on a number of interesting but unconnected innovation skills and tools. 


You need help finding ideas, technologies, research or products
Sometimes you've got a good handle on the customer needs but lack visibility and capability when it comes to finding the IP, research, technologies or products you need to address the need you've identified.  Some consultants do a great job with "open innovation", that is, helping you identify, find, vet and acquire good technologies, research or intellectual property.  Of course this can work in the reverse as well if you have IP or research and you'd like to find other companies to acquire them.


You'd like to rethink or refocus your corporate culture
In the end your corporate culture, how it thinks about innovation, how it compensates and rewards people, what it emphasizes and what it ignores, will dictate the vast majority of the success or failure of any innovation activity.  Innovation consultants can help you rethink vital components of your corporate culture and begin the work to shift it toward embracing more innovation.


I could go on, but I think you get the point.  I don't do my own plumbing because I'm not good at it.  Likewise with carpentry and auto repair.  While I could take a reasonable stab at those things, in the end I need each of them to look good and work well.  In the same way, you and your team can attempt to do some innovation without the tools, insights or training necessary, but you'll rarely be happy with the results. 
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posted by Jeffrey Phillips at 6:50 AM 0 comments