Archive for November, 2014

How It Goes With Innovation

A view of the whole thingInnovation starts with recognition of a big, meaningful problem. It can come from the strategic planning process; from an ongoing technology project that isn’t going well; an ongoing product development project that’s stuck in the trenches; or a competitor’s unforeseen action. But where it comes from isn’t the point. What matters is it’s recognized by someone important enough to allocate resources to make the problem go away. (If it’s recognized by someone who can’t muster the resources, it creates frustration, not progress.)

Once recognized, the importance of the problem is communicated to the organization. Usually, a problem is important because it blocks growth, e.g., a missing element of the new business model, technology that falls short of the distinctive value proposition (DVP), or products that can’t deliver on your promises. But whether something’s in the way or missing, the problem’s importance is best linked to a growth objective.

Company leaders then communicate to the organization, using one page. Here’s an example:

WHY – we have a problem. The company’s stock price cannot grow without meeting the growth goals, and currently we cannot meet them. Here’s what’s needed.
WHAT – grow sales by 30%.
WHERE – in emerging markets.
WHEN – in two years.
HOW – develop a new line of products for the developing world.

Along with recognition of importance, there must be recognition that old ways won’t cut it and new thinking is required. That way the company knows it’s okay to try new things.

Company leaders pull together a small group and charters them to spend a bit of time to develop concepts for the new product line and come back and report their go-forward reccommendations. But before any of the work is done, resources are set aside to work on the best ones, otherwise no one will work on them and everyone will know the company is not serious about innovation.

To create new concepts, the small group plans an Innovation Burst Event (IBE). On one page they define the DVP for the new product line, which describes how the new customers will use the new products in new ways. They use the one page DVP to select the right team for the IBE and to define fertile design space to investigate. To force new thinking, the planning group creates creative constraints and design challenges to guide divergence toward new design space.

The off-site location is selected; the good food is ordered; the IBE is scheduled; and the team is invited. The company leader who recognized the problem kicks off the IBE with a short description of the problem and its importance, and tells the team she can’t wait to hear their recoomendations at the report-out at the end of the day.

With too little time, the IBE team steps through the design challenges, creates new concepts, and builds thinking prototypes. The prototypes are the center of attention at the report-out.

At the report-out, company leaders allocate IP resources to file patents on the best concepts and commission a team of marketers, technologists, and IP staff to learn if viable technologies are possible, if they’re patentable, and if the DVP is viable.(Will it work, can we patent it, and will they buy it.)

The marketer-technologist-IP team builds prototypes and tests them in the market. The prototypes are barely functional, if at all, and their job is to learn if the DVP resonates. (Think minimum viable prototype.) It’s all about build-test-learn, and the learning loops are fast and furious at the expese of statistical significance. (Judgement carries the day in this phase.)

With viable technology, patentable ideas, and DVP in hand, the tri-lobed team reports out to company leaders who sanctioned their work. And, like with the IBE, the leaders allocate more IP resources to file more patents and commission the commercialization team.

The commercialization team is the tried-and-true group that launches products. Design engineering makes it reliable; manufacturing makes it repeatable; marketing makes it irresistible; sales makes it successful. At the design reviews more patents are filed and at manufacturing readiness reviews it’s all about process capability and throughput.

Because the work is driven by problems that limit growth, the result of the innovation work is exactly what’s needed to fuel growth – in this case a successful product line for the developing world. Start with the right problem and end up with the right solution. (Always a good idea.)

With innovation programs, all the talk is about tools and methods, but the two things that really make the difference are lightning fast learning loops and resources to do the innovation work. And there’s an important philosophical chasm to cross – because patents are usually left out of the innovation equation – like an afterthought chasing a quota – innovation should become the umbrella over patents and technology. But because IP reports into finance and technology into engineering, it will be a tough chasm to bridge.

It’s clear fast learning loops are important for fast learning, but they’re also important for building culture. At the end of a cycle, the teams report back to leadership, and each report-out is an opportunity to shape the innovation culture. Praise the good stuff and ignore the rest, and the innovation culture moves toward the praise.

There’s a natural progression of the work. Start – do one project; spread – use the learning to do the next ones; systematize – embed the new behaviors into existing business processes; sustain – praise the best performers and promote them.

When innovation starts with business objectives, the objectives are met; when innovation starts with company leadership, resources are allocated and the work gets done; and when the work shapes the culture, the work accelerates. Anything less isn’t innovation.

Image credit – Jaybird

Don’t boost innovation, burst it.

Burst you balloonThe 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

Your value proposition is dying.

old man and childYour value proposition is aging and will soon die. No matter your value proposition, this is truth – no value proposition has ever made it out alive.

Your value proposition – what you deliver, the goodness you provide – is what has made you what you are, and that’s why you center your existence on its principles and that’s why it’s sticky. And that’s also why it’s too sticky. Your successful value proposition makes you feel good so you cling to it all costs. And when it’s on life support, when it can no longer breathe on its own, you grasp more desperately for its long past goodness. And when it’s flat-lined you hysterically grab for the paddles to shock it back to life. This is unskillful, but it’s how it goes.

Value propositions are impermanent – they’re born, they grown, they die. It’s best to recognize this truth and work within the impermanence. When a successful value proposition is almost through adolescence and is thinking of heading off to college, that’s the time to bring another one to life. You may be looking forward to being an empty nester, but that works with kids, not with value propositions.

Value propositions have a long gestation period, and you never really know how they’ll turn out until they mature, or they don’t. You may think you have a good idea how they’ll turn out when they get to kindergarten, but life is uncertain, and you don’t really know how things will go. You can’t predict; you can only decide to try, or not. But there’s hope.

There are several important lenses to squint through to improve your odds, but, before that there’s one rule to live by – all infant value propositions must be disruptive. If you’re going to invest all that time and energy, the payoff must be worth the effort – think diapers of disruption.

The lens of cost of entry. To distrupt, look to radically reduce the cost of entry. If you make capital equipment, come up with a way to provide value without the capital purchase. It could be financing terms, renting, leasing, power by the hour. It could be smaller, lower cost machines that do the job, but lets the customer buy smaller chunks of capacity. It could be new technology that radically reduces cost. Or, it could be my favorite – eliminating functionality and features so the product does less and costs a whole lot less. Or, figure out some non-traditional yet powerful blockers of entry and make them go away.

The lens of user decisions. This is a big one. Eliminate all the adjustments on your so you can sell your product to people who, today, don’t have the technical savvy to run them. Eliminate all words from your product, which will let you sell them to folks that cannot read your language. Design your product with a green light and a red light, and when the red light is on, your product emails someone letting them know the failure mode and also automatically reorders the replacement parts. Add sensors to your product so it reconfigures itself so the user gets more value.

The lean lens. If you make big machines that create batching, right-size them. Look at your customer’s value stream and try to change your product to eliminate their processes with the longest cycle time. (These processes should be unfamiliar to you and should drive unfamiliar technology work.) Or, offer a new service to help them eliminate a problem supplier. Or provide them process data or information that helps them be more productive. Or, change how you make the product or how you stock/ship it to help your customer reduce inventory and respond faster.

Constrain the inputs. Reduce by 90% the required inputs to your product and reinvent it. The best example is electrical power. Give your engineers a radically lower power budget and tell them to provide as much goodness as possible. The result will be less goodness and a whole lot less power consumption. This could allow you to sell products to people with poor utilities (developing world) or help companies reduce their carbon footprint. (Isn’t that a nice value proposition these days.)

Make it more portable. If your product weighs tons, think pounds; if it weighs pounds, think ounces. If its size is measured in meters, think millimeters; if millimeters, think micrometers. The key here is to strip out functions and goodness so you can make it portable. Give ground on the crusty value proposition to sprout a new one.

These are just a few of the lenses, and you should use your deep knowledge and context to come up with the right ones for you. Here’s a neat exercise – ask your sales people how they’d sell your product without using your existing value proposition, then reimagine the product so they can sell it that way.

Your existing value proposition isn’t bad – it pays the bills and it’s what got you here, and, it’s what pays for creating the next generation of value propositions. What’s unskillful is thinking it will last forever.

Now is the only time you can shape your future. It’s time to disrupt yourself.

What’s your innovation intention?

behind the maskIf 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.

Mike Shipulski Mike Shipulski
Subscribe via Email

Enter your email address:

Delivered by FeedBurner