Shipulski On Design

Posts Tagged ‘Creativity’

Innovation is a journey, and it starts from where you are.  With a systematic approach, the right information systems are in place and are continuously observed, decision makers use the information to continually orient their thinking to make better and faster decisions, actions are well executed, and outcomes of those actions are fed back into the observation system for the next round of  orientation.  With this method, the organization continually learns as it executes – its thinking is continually informed by its environment and the results of its actions.

To put one of these innovation systems in place, the first step is to define the group that will make the decisions. Let’s call them the Decision Group, or DG for short. (By the way, this is the same group that regularly orients itself with the information steams.) And the theme of the decisions is how to deploy the organization’s resources.  The decision group (DG) should be diverse so it can see things from multiple perspectives.

The DG uses the company’s mission and growth objectives as their guiding principles to set growth goals for the innovation work, and those goals are clearly placed within the context of the company’s mission.

The first action is to orient the DG in the past.  Resources are allocated to analyze the product launches over the past ten years and determine the lines of ideality (themes of goodness, from the customers’ perspective).  These lines define the traditional ideality (traditional themes of goodness provided by your products) are then correlated with historical profitability by sales region to evaluate their importance. If new technology projects provide value along these traditional lines, the projects are continuous improvement projects and the objective is market share gain. If they provide extreme value along traditional lines, the projects are of the dis-continuous improvement flavor and their objective is to grow the market.  If the technology projects provide value along different lines and will be sold to a different customer base, the projects could be disruptive and could create new markets.

The next step is to put in place externally focused information streams which are used for continuous observation and continual orientation.  An example list includes: global and regional economic factors, mergers/acquisitions/partnerships, legal changes, regulatory changes, geopolitical issues, competitors’ stock price and quarterly updates, and their new products and patents.  It’s important to format the output for easy visualization and to make collection automatic.

Then, internally focused information streams are put in place that capture results from the actions of the project team and deliver them, as inputs, for observation and orientation.  Here’s an example list: experimental results (technology and market-centric), analytical results (technical and market), social media experiments, new concepts from ideation sessions (IBEs), invention disclosures, patent filings, acquisition results, product commercialization results and resulting profits.  These information streams indicate the level of progress of the technology projects and are used with the external information streams to ground the DG’s orientation in the achievements of the projects.

All this infrastructure, process, and analysis is put in place to help the DG make good (and fast) decisions about how to allocate resources. To make good decisions, the group continually observes the information streams and continually orients themselves in the reality of the environment and status of the projects.  At this high level, the group decides not how the project work is done, rather what projects are done.  Because all projects share the same resource pool, new and existing projects are evaluated against each other.  For ongoing work the DG’s choice is – stop, continue, or modify (more or less resources); and for new work it’s – start, wait, or never again talk about the project.

Once the resource decision is made and communicated to the project teams, the project teams (who have their own decision groups) are judged on how well the work is executed (defined by the observed results) and how quickly the work is done (defined by the time to deliver results to the observation center.)

This innovation system is different because it is a double learning loop.  The first one is easy to see – results of the actions (e.g., experimental results) are fed back into the observation center so the DG can learn.  The second loop is a bit more subtle and complex.  Because the group continuously re-orients itself, it always observes information from a different perspective and always sees things differently.  In that way, the same data, if observed at different times, would be analyzed and synthesized differently and the DG would make different decisions with the same data. That’s wild.

The pace of this double learning loop defines the pace of learning which governs the pace of innovation.   When new information from the streams (internal and external) arrive automatically and without delay (and in a format that can be internalized quickly), the DG doesn’t have to request information and wait for it. When the DG makes the resource-project decisions it’s always oriented within the context of latest information, and they don’t have to wait to analyze and synthesize with each other.  And when they’re all on the same page all the time, decisions don’t have to wait for consensus because it already has.  And when the group has authority to allocate resources and chooses among well-defined projects with clear linkage to company profitability, decisions and actions happen quickly.  All this leads to faster and better innovation.

There’s a hierarchical set of these double learning loops, and I’ve described only the one at the highest level.  Each project is a double learning loop with its own group of deciders, information streams, observation centers, orientation work and actions.  These lower level loops are guided by the mission of the company, goals of the innovation work, and the scope of their projects.  And below project loops are lower-level loops that handle more specific work.  The loops are fastest at the lowest levels and slowest at the highest, but they feed each other with information both up the hierarchy and down.

The beauty of this loop-based innovation system is its flexibility and adaptability.  The external environment is always changing and so are the projects and the people running them.  Innovation systems that employ tight command and control don’t work because they can’t keep up with the pace of change, both internally and externally.  This system of double loops provides guidance for the teams and sufficient latitude and discretion so they can get the work done in the best way.

The most powerful element, however, is the almost “living” quality of the system.  Over its life, through the work itself, the system learns and improves.  There’s an organic, survival of the fittest feel to the system, an evolutionary pulse, that would make even Darwin proud.

But, really, it’s Colonel  John Boyd who should be proud because he invented all this.  And he called it the OODA loop. Here’s his story – Boyd: The Fighter Pilot Who Changed the Art of War.

Where possible, I have used Boyd’s words directly, and give him all the credit. Here is a list of his words: observe, orient, decide, act, analyze-synthesize, double loop, speed, organic, survival of the fittest, evolution.

Image attribution – U.S. Government [public domain]. by wikimedia commons.

A body in motion tends to stay in motion, unless it’s perturbed by an external force.  And, it’s the same with people – we keep doing what we’re doing until there’s a reason we cannot.  If it worked, there’s no external force to create changes, so we do more of what worked.  If it didn’t work, while that should result in an external force strong enough to create change, often it doesn’t and we try more of what didn’t work, but try it harder.  Though the scenarios are different, in both the external force is insufficient to create new behavior.

In order to know which camp you’re in, it’s important to know how we decide between what worked and what didn’t (or between working and not working).  To decide, we compare outcomes to expectations, and if outcomes are more favorable than our expectations, it worked; if less favorable, it didn’t.  It’s strange, but true – what we expect delineates what worked from what didn’t and what’s good enough from what isn’t.  In that way, it’s our choice.

Whether our business model is working, isn’t working, or hasn’t worked, what we think and do about it is our choice.  What that means is, regardless of the magnitude of the external force, we decide if it’s large enough to do our work differently or do different work.  And because innovation starts with different, what that means is innovation is a choice – our choice.

Really, though, external forces don’t create new behavior, internal forces do.  We watch the culture around us and sense the external forces it creates on us, then we look inside and choose to apply the real force behind innovation – our intrinsic motivation.  If we’re motivated by holding on to what we have, we’ll spend little of our life force on innovation.  If we’re motivated by a healthy dissatisfaction with the status quo, we’ll empty our tank in the name of innovation.

Who is tasked with innovation at your company is an important choice, because while the tools and methods of innovation can be taught, a person’s intrinsic motivation, a fundamental forcing function of innovation, cannot.

Image credit – Ed Yourdon

Everyone says they want innovation, but they don’t – they want the results of innovation.

Innovation is about bringing to life things that are novel, useful and successful. Novel and useful are nice, but successful pays the bills.  Novel means new, and new means fear; useful means customers must find value in the newness we create, and that’s scary. No one likes fear, and, if possible, we’d skip novel and useful altogether, but we cannot.  Success isn’t a thing in itself, success is a result of something, and that something is novelty and usefulness.

Companies want success and they want it with as little work and risk as possible, and they do that with a focus on efficiency – do more with less and stock price increases.  With efficiency it’s all about getting more out of what you have – don’t buy new machines or tools, get more out of what you have.  And to reduce risk it’s all about reducing newness – do more of what you did, and do it more efficiently.  We’ve unnaturally mapped success with the same old tricks done in the same old way to do more of the same. And that’s a problem because, eventually, sameness runs out of gas.

Innovation starts with different, but past tense success locks us into future tense sameness.  And that’s the rub with success – success breeds sameness and sameness blocks innovation.  It’s a strange duality – success is the carrot for innovation and also its deterrent. To manage this strange duality, don’t limit success; limit how much it limits you.

The key to busting out of the shackles of your success is doing more things that are different, and the best way to do that is with no-to-yes.

If your product can’t do something then you change it so it can, that’s no-to-yes.  By definition, no-to-yes creates novelty, creates new design space and provides the means to enter (or create) new markets.  Here’s how to do it.

Scan all the products in your industry and identify the product that can operate with the smallest inputs.  (For example, the cell phone that can run on the smallest battery.)  Below this input level there are no products that can function – you’ve identified green field design space which you can have all to yourself.   Now, use the industry-low input to create a design constraint.  To do this, divide the input by two – this is the no-to-yes threshold.  Before you do you the work, your product cannot operate with this small input (no), but after your hard work, it can (yes).  By definition the new product will be novel.

Do the same thing for outputs.  Scan all the products in your industry to find the smallest output. (For example, the automobile with the smallest engine.)  Divide the output by two and this is your no-to-yes threshold.  Before you design the new car it does not have an engine smaller than the threshold (no), and after the hard work, it does (yes). By definition, the new car will be novel.

A strange thing happens when inputs and outputs are reduced – it becomes clear existing technologies don’t cut it, and new, smaller, lower cost technologies become viable.  The no-to-yes threshold (the constraint) breaks the shackles of success and guides thinking in a new directions.

Once the prototypes are built, the work shifts to finding a market the novel concept can satisfy.  The good news is you’re armed with prototypes that do things nothing else can do, and the bad news is your existing customers won’t like the prototypes so you’ll have to seek out new customers. (And, really, that’s not so bad because those new customers are the early adopters of the new market you just created.)

No-to-yes thinking is powerful, and though I described how it’s used with products, it’s equally powerful for services, business models and systems.

If you want innovation (and its results), use no-to-yes thinking to find the limits and work outside them.

Innovation is about new; innovation is about different; innovation is about “never been done before”; and innovation is about preparation.

Though preparation seems to contradict the free-thinking nature of innovation, it doesn’t.  In fact, where brainstorming diverts attention, the right innovation preparation focuses it; where brainstorming seeks more ideas, preparation seeks fewer and more creative ones; where brainstorming does not constrain, effective innovation preparation does exactly that.

Ideas are the sexy part of innovation; commercialization is the profitable part; and preparation is the most important part.  Before developing creative, novel ideas, there must be a customer of those ideas, someone that, once created, will run with them.  The tell-tale sign of the true customer is they have a problem if the innovation (commercialization) doesn’t happen. Usually, their problem is they won’t make their growth goals or won’t get their bonus without the innovation work.  From a preparation standpoint, the first step is to define the customer of the yet-to-be created disruptive concepts.

The most effective way I know to create novel concepts is the IBE (Innovation Burst Event), where a small team gets together for a day to solve some focused design challenges and create novel design concepts.  But before that can happen, the innovation preparation work must happen.  This work is done in the Focus phase. The questions and discussion below defines the preparation work for a successful IBE.

1. Why is it so important to do this innovation work?

What defines the need for the innovation work?  The answer tells the IBE team why they’re in the room and why their work is important. Usually, the “why” is a growth goal at the business unit level or projects in the strategic plan that are missing the necessary sizzle. If you can’t come up with a slide or two with growth goals or new projects, the need for innovation is only emotional.  If you have the slides, these will be used to kick off the IBE.

2. Who is the customer of the novel concepts?

Who will choose which concepts will be converted into working prototypes? Who will convert the prototypes into new products? Who will launch the new products? Who has the authority to allocate the necessary resources? These questions define the customers of the new concepts.  Once defined, the customers become part of the IBE team.  The customers kick off the IBE and explain why the innovation work is important and what they’ll do with the concepts once created.  The customers must attend the IBE report-out and decide which concepts they’ll convert to working prototypes and patents.

Now, so the IBE will generate the right concepts, the more detailed preparation work can begin.  This work is led by marketing.  Here are the questions to scope and guide the IBE.

3. How will the innovative new product be used?

How will the innovative product be used in new way? This question is best answered with a hand sketch of the customer using the new product in a new way, but a short written description (30 words, or so) will do in a pinch. The answer gives the IBE team a good understanding, from a customer perspective, what new things the product must do.

What are the new elements of the design that enable the new functionality or performance? The answer focuses the IBE on the new design elements needed to make real the new product function in the new way.

What are the valuable customer outcomes (VCOs) enabled by the innovative new product? The answer grounds the IBE team in the fundamental reason why the customer will buy the new product.  Again, this is answered from the customer perspective.

4. How will the new innovative new product be marketed and sold?

What is the tag line for the new product? The answer defines, at the highest level, what the new product is all about. This shapes the mindset of the IBE team and points them in the right direction.

What is the major benefit of the new product? The answer to this question defines what your marketing says in their marketing/sales literature.  When the IBE team knows this, you can be sure the new concepts support the marketing language.

5. By whom will the innovative new product be used?

In which geography does the end user live? There’s a big difference between developed markets and developing markets.  The answer to the question sets the context for the new concepts, specifically around infrastructure constraints.

What is their ability to pay? Pocketbooks are different across the globe, and the customer’s ability to pay guides the IBE team toward concepts that fit the right pocket book.

What is the literacy level of the end customer?  If the customer can read, the IBE team creates concepts that take advantage of that ability.  If the customer cannot read, the IBE team creates concepts that are far different.

6. How will the innovative new product change the competitive landscape?

Who will be angry when the new product hits the market? The answer defines the competition.  It gives broad context for the IBE team and builds emotional energy around displacing adversaries.

Why will they be angry? With the answer to this one, the IBE team has good perspective on the flavor of pain and displeasure created by the concepts.  Again, it shapes the perspective of the IBE team.  And, it educates the marketing/sales work needed to address competitors’ countermeasures.

Who will benefit when the new product hits the market? This defines new partners and supporters that can be part of the new solutions or participants in a new business model or sales process.

What will customer throw away, reuse, or recycle? This question defines the level of disruption.  If the new products cause your existing customers to throw away the products of your existing customers, it’s a pure market share play.  The level of disruption is low and the level of disruption of the concepts should also be low.  On the other end of the spectrum, if the new products are  sold to new customers who won’t throw anything away, you creating a whole new market, which is the ultimate disruption, and the concepts must be highly disruptive.  Either way, the IBE team’s perspective is aligned with the level appropriate level of disruption, and so are the new concepts.

Answering all these questions before the creative works seems like a lot of front-loaded preparation work, and it is. But, it’s also the most important thing you can do to make sure the concept work, technology work, patent work, and commercialization work gives your customers what they need and delivers on your company’s growth objectives.

Image credit — ccdoh1.

The most difficult part of innovation is starting, and the best way to start is the Innovation Burst Event, or IBE. The IBE is a short, focused event with three objectives: to learn innovation methods, to provide hands-on experience, and to generate actual results. In short, the IBE is a great way to get started.

There are a couple flavors of IBEs, but the most common is a single day even where a small, diverse group gets together to investigate some bounded design space and to create novel concepts. At the start, a respected company leader explains to the working group the importance of the day’s work, how it fits with company objectives, and sets expectations there will be a report out at the end of the day to review the results. During the event, the working group is given several design challenges, and using innovation tools/methods, creates new concepts and builds “thinking prototypes.” The IBE ends with a report out to company leaders, where the working group identifies patentable concepts and concepts worthy of follow-on work. Company leaders listen to the group’s recommendations and shape the go-forward actions.

The key to success is preparation. To prepare, interesting design space is identified using multiple inputs: company growth objectives, new market development, the state of the technology, competitive landscape and important projects that could benefit from new technology. And once the design space is identified, the right working group is selected. It’s best to keep the group small yet diverse, with several important business functions represented. In order to change the thinking, the IBE is held at location different than where the day-to-day work is done – at an off-site location. And good food is provided to help the working group feel the IBE is a bit special.

The most difficult and most important part of preparation is choosing the right design space. Since the selection process starts with your business objectives, the design space will be in line with company priorities, but it requires dialing in. The first step is to define the operational mechanism for the growth objective. Do you want a new product or process? A new market or business model? The next step is to choose if you want to radically improve what you have (discontinuous improvement) or obsolete your best work (disruption). Next, the current state is defined (knowing the starting point is more important than the destination) – Is the technology mature? What is the completion up to? What is the economy like in the region of interest? Then, with all that information, several important lines of evolution are chosen. From there, design challenges are created to exercise the design space. Now it’s time for the IBE.

The foundation of the IBE is the build-to-think approach and its building blocks are the design challenges. The working group is given a short presentation on an innovation tool, and then they immediately use the tool on a design challenge. The group is given a short description of the design challenge (which is specifically constructed to force the group from familiar thinking), and the group is given an unreasonably short time, maybe 15-20 minutes, to create solutions and build thinking prototypes. (The severe time limit is one of the methods to generate bursts of creativity.) The thinking prototype can be a story board, or a crude representation constructed with materials on hand – e.g., masking tape, paper, cardboard. The group then describes the idea behind the prototype and the problem it solves. A mobile phone is used to capture the thinking and the video is used at the report out session. The process is repeated one or two times, based on time constraints and nature of the design challenges.

About an hour before the report out, the working group organizes and rationalizes the new concepts and ranks them against impact and effort. They then recommend one or two concepts worthy of follow on work and pull together high level thoughts on next steps. And, they choose one or two concept that may be patentable. The selected concepts, the group’s recommendations, and their high level plans are presented at the report out.

At the report out, company leaders listen to the working group’s thoughts and give feedback. Their response to the group’s work is crucial. With right speech, the report out is an effective mechanism for leaders to create a healthy innovation culture. When new behaviors and new thinking are praised, the culture of innovation moves toward the praise. In that way, the desired culture can be built IBE by IBE and new behaviors become everyday behaviors.

Innovation is a lot more than Innovation Burst Events, but they’re certainly a central element. After the report out, the IBE’s output (novel concepts) must be funneled into follow on projects which must be planned, staffed, and executed. And then, as the new concepts converge on commercialization, and the intellectual comes on line, the focus of the work migrates to the factory and the sales force.

The IBE is designed to break through the three most common innovation blockers – no time to do innovation; lack of knowledge of how do innovation (though that one’s often unsaid); and pie-in-the-sky, brainstorming innovation is a waste of time. To address the time issue, the IBE is short – just one day. To address the knowledge gap, the training is part of the event. And to address the pie-in-the-sky – at the end of the day there is tangible output, and that output is directly in line with the company’s growth objectives.

It’s emotionally challenging to do work that destroys your business model and obsoletes your best products, but that’s how it is with innovation. But for motivation, think about this – if your business model is going away, it’s best if you make it go away, rather than your competition.  But your competition does end up changing the game and taking your business, I know how they’ll do it – with Innovation Burst Events.

Image credit – Pascal Bovet

If you want to run a brainstorming session to generate a long list of ideas, I’m out. Brainstorming takes the edge off, rounds off the interesting corners and rubs off any texture. If you want me to go away for a while and come back with an idea that can dismantle our business model, I’m in.

If you can use words to explain it, don’t bother – anything worth its salt can’t be explained with PowerPoint. If you need to make a prototype so others can understand, you’ve got my attention.

If you have to ask my permission before you test out an idea that could really make a difference, I don’t want you on my team. If you show me a pile of rubble that was your experiment and explain how, if it actually worked, it could change the game, I’ll run air cover, break the rules, and jump in front of the bullets so you can run your next experiments, whatever they are.

If you load me up to with so many projects I can’t do several I want, you’ll get fewer of yours. If you give me some discretion and a little slack to use it, you’ll get magic.

If, before the first iteration is even drawn up, you ask me how much it will cost, I will tell you what you want to hear. If, after it’s running in the lab and we agree you’ll launch it if I build it, I won’t stop working until it meets your cost target.

If there’s total agreement it’s a great idea, it’s not a great idea, and I’m out. If the idea is squashed because it threatens our largest, most profitable business, I’m in going to make it happen before our competitors do.

If twice you tell me no, yet don’t give me a good reason, I’ll try twice as hard to make a functional prototype and show your boss.

To do innovation, real no-kidding innovation, requires a different mindset both to do the in-the-trenches work and to lead it. Innovation isn’t about following the process and fitting in, it’s about following your instincts and letting it hang out. It’s about connecting the un-connectable using the most divergent thinking.  And contrary to belief, it’s not in-the-head work, it’s a full body adventure.

Innovation isn’t about the mainstream, it’s about the fringes. And it’s the same for the people that do the work.  But to be clear, it’s not what it may look like at the surface. It’s not divergence for divergence’s sake and it’s not wasting time by investigating the unjustified and the unreasonable. It’s about unique people generating value in unique ways. And at the core it’s all guided by their deep intention to build a resilient, lasting business.

image credit: Chris Martin.

Innovation is about selling different products and services to different customers. Different means growth because you’re not yet selling the different products and you’re not yet selling to the different customers.

If you can learn to see your customers differently, you’ll create new products that are different; and if you can learn to see your products and services differently, you’ll create new customers that are different.

Innovation is all about connecting the unconnected, and that’s what’s behind the push for diversity within innovation teams. A diverse group brings more things to connect and more perspectives to see connections.

And it’s best to innovate where there’s little to no competition. If you’re the only one developing new products for those new customers or your the only one creating a whole new community of customers, you’ll be more successful – your products have only to compete with products that don’t exist.

In almost every industry and market there’s a huge community of new customers just waiting for products and services that fit them – women. Women have ever more say over family finances, ever more buying power and, thankfully, ever more influence over our society. If you want to sell new and different products, you should learn how to innovate for women.

I’m not talking about the 1950’s-like worldview where men innovate and sell new dish detergent and vacuum cleaners to women. I’m talking about all products and all markets. What does a cordless drill look like when it’s designed for women? I don’t know because I’m a man. (The only thing I do know is it’s not the same old drill wrapped in pink. That’s just patronizing.

Plain and simple, women know best how to innovate for women.

The most important way to increase the diversity of your innovation teams is to add more women. Women can see unmet needs to which I, as a man, am blind. Women can connect things that I cannot. Women have an unique worldview that, as a man, I cannot fully appreciate.

If you really want a competitive advantage, replace some of your innovation leaders with women. And if you want to accelerate the transformation, your Chief Innovation Officer should be a woman.

There’s been a strong effort to teach STEAM/STEM to our girls and young women, and that’s good. But it’s time to create the climate where our girls and young women see themselves as the innovators of our future.

Image credit – Judepics.

If you’re serious about innovation, you must learn, as second nature, to convert your ideas into prototypes.

Funny thing about ideas is they’re never fully formed – they morph and twist as you talk about them, and as long as you keep talking they keep changing. Evolution of your ideas is good, but in the conversation domain they never get defined well enough (down to the nuts-and-bolts level) for others (and you) to know what you’re really talking about. Converting your ideas into prototypes puts an end to all the nonsense.

Job 1 of the prototype is to help you flesh out your idea – to help you understand what it’s all about. Using whatever you have on hand, create a physical embodiment of your idea. The idea is to build until you can’t, to build until you identify a question you can’t answer. Then, with learning objective in hand, go figure out what you need to know, and then resume building. If you get to a place where your prototype fully captures the essence of your idea, it’s time to move to Job 2. To be clear, the prototype’s job is to communicate the idea – it’s symbolic of your idea – and it’s definitely not a fully functional prototype.

Job 2 of the prototype is to help others understand your idea. There’s a simple constraint in this phase – you cannot use words – you cannot speak – to describe your prototype. It must speak for itself. You can respond to questions, but that’s it. So with your rough and tumble prototype in hand, set up a meeting and simply plop the prototype in front of your critics (coworkers) and watch and listen. With your hand over your mouth, watch for how they interact with the prototype and listen to their questions. They won’t interact with it the way you expect, so learn from that. And, write down their questions and answer them if you can. Their questions help you see your idea from different perspectives, to see it more completely. And for the questions you cannot answer, they the next set of learning objectives. Go away, learn and modify your prototype accordingly (or build a different one altogether). Repeat the learning loop until the group has a common understanding of the idea and a list of questions that only a customer can answer.

Job 3 is to help customers understand your idea. At this stage it’s best if the prototype is at least partially functional, but it’s okay if it “represents” the idea in clear way. The requirement is prototype is complete enough for the customer can form an opinion. Job 3 is a lot like Job 2, except replace coworker with customer. Same constraint – no verbal explanation of the prototype, but you can certainly answer their direction questions (usually best answered with a clarifying question of your own such as “Why do you ask?”) Capture how they interact with the prototype and their questions (video is the best here). Take the data back to headquarters, and decide if you want to build 100 more prototypes to get a broader set of opinions; build 1000 more and do a small regional launch; or scrap it.

Building a prototype is the fastest, most effective way to communicate an idea. And it’s the best way to learn. The act of building forces you to make dozens of small decisions to questions you didn’t know you had to answer and the physical nature the prototype gives a three dimensional expression of the idea. There may be disagreement on the value of the idea the prototype stands for, but there will be no ambiguity about the idea.

If you’re not building prototypes early and often, you’re not doing innovation. It’s that simple.

There are three types of innovation: innovation that creates jobs, innovation that’s job neutral, and innovation that reduces jobs.

Innovation that reduces jobs is by far the most common. This innovation improves the efficiency of things that already exist – the mantra: do the same, but with less. No increase in sales, just fewer people employed.

Innovation that’s job neutral is less common. This innovation improves what you sell today so the customer will buy the new one instead of the old one. It’s a trade – instead of buying the old one they buy the new one. No increase in sales, same number of people employed.

Innovation that creates jobs is uncommon. This innovation radically changes what you sell today and moves it from expensive and complicated to affordable and accessible. Sell more, employ more.

Clay Christensen calls it Disruptive Innovation; Vijay Govindarajan calls it Reverse Innovation; and I call it Less-With-Far-Less.

The idea is the product that is sold to a relatively small customer base (due to its cost) is transformed into something new with far broader applicability (due to its hyper-low cost). Clay says to “look down” to see the new technologies that do less but have a super low cost structure which reduces the barrier to entry. And because more people can afford it, more people buy it. And these aren’t the folks that buy your existing products. They’re new customers.

Vijay says growth over the next decades will come from the developing world who today cannot afford the developed world’s product. But, when the price comes down (down by a factor of 10 then down by a factor of 100), you sell many more. And these folks, too, are new customers.

I say the design and marketing communities must get over their unnatural fascination with “more” thinking. To sell to new customers the best strategy is increase the number of people who can afford your product. And the best way to do that is to radically reduce the cost signature at the expense of features and function. If you can give ground a bit on the thing that makes your product successful, there is huge opportunity to reduce cost – think 80% less cost and 20% less function. Again, you sell new product to new customers.

Here’s a thought experiment to help put you in the right mental context: Create a plan to form a new business unit that cannot sell to your existing customers, must sell a product that does less (20%) and costs far less (80%), and must sell it in the developing world. Now, create a list of small projects to test new technologies with radically lower cost structures, likely from other industries. The constraint on the projects – you must be able to squeeze them into your existing workload and get them done with your existing budget and people. It doesn’t matter how long the projects take, but the investment must be below the radar.

The funny thing is, if you actually run a couple small projects (or even just one) to identify those new technologies, for short money you’ve started your journey to selling new products to new customers.

There are many flavors of innovation – incremental, disruptive, and seven flavors in between. And there is lots of argument about the level of innovation – mine’s radical and yours isn’t; that’s just improving what we already have; that’s too new – no one will ever buy it. We want to label the work in order to put it in the right bucket, to judge if we’re doing the right work. But the labels get in the way – they’re loaded with judgments, both purrs and snarls.

Truth is, innovation work falls on a continuum of newness and grouping them makes little sense. And, it’s not just newness that matters – it’s how the newness fits (or doesn’t) within the context of how things happen today and how customers think they should happen tomorrow. So what to do?

Customers notice the most meaningful innovations, and they notice the most meaningful ones before the less meaningful. Evaluate the time it takes a customer to notice the innovation and there may be hope to evaluate the importance of the innovation.

The technology reduces cost, and at the end of the month when the numbers are rolled up the accountants can see the improvement. This is real improvement, but there’s a significant lag and the people doing the work don’t see it as meaningful. This one’s a tough sell – buy this new thing, train on it, use it for three months, and if you keep good records and do some nifty statistics you’ll see an improvement.

The technology reduces scrap, and at the end of the week the scrap bin will be half full instead of fully full. Scrap is waste and waste reduction is real improvement. This is an easier sell – buy it and train on it and at the end of the week you’ll notice a reduction in scrap. This is important but only to those who are measured on scrap. And today the scrap is emptied every week, now we can empty it every other week. The time to notice is reduced, but the impact may not be there.

The technology increases throughput, and at the end of the shift the bins will be fuller than full. Here – try it for a shift and see what you think. If you like it, you can buy it. I’ll be back tomorrow with a quote. This is noticeable within eight hours. And at the end of eight hours there are more things that can be sold. That’s real money, and real money gets noticed.

The technology makes the product last two hours instead of one. Here – try it for a couple hours. I’ll go get a coffee and come back and see what you think. You won’t have to stop the machine nearly as often and you’ll put more parts into finished goods inventory. The technology gets noticed within two hours and the purchase order is signed in three.

Where the old technology was load, this is quiet. Don’t bother with ear protection, just give it a go. Pretty cool, isn’t it. Go get your boss and I’ll sell you a couple units right now. This one shows its benefits the end user right away – first try.

The most meaningful innovations get noticed instantly. Stop trying to label the innovation and simply measure how long it takes your customer to notice.

From the outside it’s unclear how things happen; but from the inside it’s clear as day. No, it’s not your bulletproof processes; it’s not your top down strategy; and it’s not your operating plans. It’s your people.

At some level everything happens like this:

An idea comes to you that makes little sense, so you drop it. But it comes again, and then again. It visits regularly over the months and each time reveals a bit of its true self. But still, it’s incomplete. So you walk around with it and it eats at you; like a parasite, it gets stronger at your expense. Then, it matures and grows its voice – and it talks to you. It talks all the time; it won’t let you sleep; it pollutes you; it gets in the way; it colors you; and finally you become the human embodiment of the idea.

And then it tips you. With one last push, it creates enough discomfort to roll over the fear of acknowledging its existence, and you set up the meeting.

You call the band and let them know it’s time again to tour. You’ve been through it before and you all know deal. You know your instruments and you know how to harmonize. You know what they can do (because they’ve done it before) and you trust them. You sing them the song of your idea and they listen. Then you ask them to improvise and sing it back, and you listen. The mutual listening moves the idea forward, and you agree to take a run at it.

You ask how it should go. The lead vocalist tells you how it should be sung; the lead guitar works out the fingering; the drummer beats out the rhythm; and the keyboardist grins and says this will be fun. You all know the sheet music and you head back to your silos to make it happen.
In record time, the work gets done and you get back together to review the results. As a group you decide if the track is good enough play in public. If it is, you set up the meeting with a broader audience to let them hear your new music. If it’s not, you head back to the recording studio to amplify what worked and dampen what didn’t. You keep re-recording until your symphony is ready for the critics.

Things happen because artists who want to make a difference band together and make a difference. With no complicated Gantt chart, no master plan, no request for approval, and no additional resources, they make beautiful music where there had been none. As if from thin air, they create something from nothing. But it’s not from thin air; it’s from passion, dedication, trust, and mutual respect.

The business books over-complicate it. Things happen because people make them happen – it’s that simple.