Archive for December, 2016

You can’t control much with innovation, but you can control how you allocate resources.

In business, the only direct lever to pull is resource allocation. The people are already on the books, just change what they work on. But pulling that off is difficult.

No need to wait for new hires, just move resources from one project to another.  Stop project A and start project B.  Simple, right? Not so much. Emotional attachment causes project A to defend their resources and project B to complain the resources haven’t moved. Resources will be slow to flow.

No need to take the time to develop new capability, just reassign capable resources from business 1 to business 2 and watch progress unfold. No problem, right? Wrong. There’s immense organizational drama from prioritizing one business over another. Again, the pace of resource flow will be glacial.

And with innovation, the drama is doubled. It’s threatening when resources flow from mainstream projects with tangible (but small) returns to more speculative projects with highly uncertain returns.  But that’s what must happen.

If there’s a mismatch between the words and resource allocation, believe resource allocation.

If the innovation banners are plastered on all the walls and everyone has the tee shirt, yet the resources don’t flow to the innovation work, it’s an innovation farce. Run away.  Here’s what the four HOWs of innovation look like through the lens of resource allocation.

How To Start. Define the yearly funding level for innovation resources that is independent of the yearly planning process.  In short, create an innovation tax at a fixed percentage of revenue.  This gets funded before anything else.  It’s the pay-yourself-first approach to innovation. And when the money is allocated and the resources flow, there’s no need for banners and tee shirts.  Alignment comes with the money.

Next, choose a leader to put in place standing processes to continuously funnel project ideas into a common hopper.  One pile for all ideas – university research, mergers and acquisitions, voice of the technology, voice of the customer (direct observation and listening), patents and YouTube videos of purposeful misuse of your product.

How To Choose. Define funding levels across the various flavors of projects in the portfolio and set up a standing meeting for senior leaders to choose the best projects. This selection process is light on analysis and heavy on judgment, so allocate leaders who are not afraid to use good judgement. And set up a standing meeting with the CEO to pace the selection work (make sure senior leaders allocate their time.)

How To Execute. Internal, external, or partner, the work defines the right way to allocate resources.  Based on the work, choose the right organization and the best leader and fully staff the project before considering a second project.  The most popular failure mode is running too many projects in parallel and getting none done.  The second popular failure mode forgetting to fund the support resources needed for innovation.  Allocate money for tools, time, training and a teacher. Establish a standing meeting where senior leaders review the projects.  This must be outside the review process normal projects.

How To Improve. No one ever allocates time to do this.  To get the work done, trick the system and include the work as a standing agenda item in the How To Execute review meetings.  Find a problem, fix a problem. Improve as you go.

Allocate the best resources to the best projects and make sure senior leaders allocate time to the innovation work. The best predictors of successful innovation are the character of the fully-staffed, fully-funded projects and the character of people that run them.

Image credit – conorwithonen

Understanding the trajectory of the competitive landscape

Bullseye!If you want to gain ground on your competition you’ve first got to know where things stand.  Where are their advantages? Where are your advantages?  Where is there parity? To quickly understand the situations there are three tricks: stay at a high level, represent the situation in a clear way and, where possible, use public information from their website.

A side-by-side comparison of the two companies’ products is the way to start.  Create a common set of axes with price running south to north and performance (or output) running west to east.  Make two copies and position them side-by-side on the page – yours on the left and theirs directly opposite on the right.  Go to their website (and yours) and make a list of every product, its price and its output. (For prices of their products you may have to engage your sales team and your customers.) For each of your products place a symbol (the company logo) on your performance-price landscape and do the same for their products on their landscape.  It’s now clear who has the most products, where their portfolio outflanks yours and where you outflank them.  The clarity and simplicity will help everyone see things as they are – there may be angst but there will be no confusion and no disagreement. The picture is clear.  But it’s static.

The areal differences define the gaps to close and the advantages to exploit.  Now it’s time to define the momentum and trajectories of the portfolios to add a dynamic element. For your most recent product launch add a one next to its logo, for the second most recent add a two and for the third add three. These three regions of your portfolio are your most recent focus areas. This is your trajectory and this is where you have momentum.  Extend and arrow in the direction of your trajectory.  If you stay the course, this is where your portfolio will add mass. Do the same for your competitor and compare arrows.  You know have a glimpse into the future. Are your arrows pointing in the same directions as theirs? Are they located in the same regions? How would feel if both companies continued on their trajectories? With this addition you have glimpse into the stay-the-course future.  But will they stay the course? For that you need to look at the patent landscape.

Do a patent search on their patents and applications over the previous year and represent each with its most descriptive figure. Write a short thematic description for each, group like themes and draw a circle around them.  Mark the circle with a one to denote last year’s patents.  Repeat the process for two years ago and three years ago and mark each circle accordingly.  Now you have objective evidence of the future.  You know where they have been working and you know where they want to go. You have more than a glimpse into the future.  You know their preferred trajectories.  Reconcile their preferred trajectories with their price-performance landscapes and arrows 1, 2 and 3.  If their preferred trajectories line up with their product momentum, it’s business as usual for them.  If they contradict, they are playing a different game.  And because it takes several years for patent applications to publish, they’ve been playing a new game for a while now.

Repeat the process for your patent landscape and flop it onto your performance-price landscape.  I’m not sure what you’ll see, but you’ll know it when you see it.  Then, compare yours with theirs and you’ll know what the competitive landscape will look like in three years. You may like what you see, or not.  But, the picture will be clear. There may be discomfort, but there can be no arguments.

This process can also be used in the acquisition process to get a clear picture a company’s future state.  In that way you can get a calibrated view three years into the future and use your crystal ball to adjust your offer price accordingly.

Image credit – Rob Ellis

Learning at the expense of predicting.

john_william_waterhouse_-_the_crystal_ballWhen doing new things there is no predictability. There’s speculation, extrapolation and frustration, but no prediction. And the labels don’t matter.  Whether it’s called creativity, innovation, discontinuous improvement or disruption there’s no prediction.

The trick in the domain complexity is to make progress without prediction.

The first step is to try to define the learning objective.  The learning objective is what you want to learn. And its format is – We want to learn that [fill in the learning objective here].  It’s fastest to tackle one learning objective at a time because small learning objectives are achieved quickly with small experiments.  But, it will be a struggle to figure out what to learn.  There will be too many learning objectives and none will be defined narrowly.  At this stage the fastest thing to do is stop and take a step back.

There’s nothing worse than learning about the wrong thing.  And it’s slow. (The fastest learning experiments are the ones that don’t have to be run.) Before learning for the sake of learning, take the necessary time to figure out what to learn. Ask some questions: If it worked could it reinvent your industry? Could it obsolete your best product? Could it cause competitors to throw in the towel?  If the answer is no, stop the project and choose one where the answer is yes. Choose a meaningful project, or don’t bother.

First learning objective – We want to learn that, when customers love the new concept, the company will assign appropriate resources to commercialize it.  If there’s no committment up front, stop.  If you get committment, keep going. (Without upfront buy-in the project relies on speculation, the wicked couple of prediction and wishful thinking.)

Second learning objective – We want to learn that customers love the new concept.  This is not “I think customers will love it.” or “Customers may love it.” In the standard learning objective format – We want to learn that [customers love the new concept].  Next comes the learning plan.

What will you build for customers to help them understand the useful novelty of the revolutionary concept?  For speed’s sake, build a non-functional prototype that stands for the concept.  It’s a thin skin wrapped around an empty box that conveys the essence of the novelty.  No skeleton, just skin.  And for speed’s sake, show it to fewer customers than you think reasonable.  And define the criteria to decide they love it.  There’s no trick here. Ask “Do they love it?” and use your best judgement.  At this early stage, the answer will be no.  But they’ll tell you why they don’t love it, and that’s just the learning you’re looking for.

Use customer input to reformulate the learning objective and build a new prototype and repeat.  The key here is to build fast, test fast, learn fast and repeat fast.  The art becomes defining the simplest learning objectives, building the simplest prototypes and making decisions with data from the fewest customers.

With complexity and newness prediction isn’t possible. But learning is.

And learning doesn’t have to take a lot of time.

Image credit — John William Waterhouse

Why not start?

startIt doesn’t matter where the journey ends, as long as it starts.

After starting, don’t fixate on the destination, focus on how you get there.

A long project doesn’t get shorter until you start. Neither does a short one.

Start under the radar.

When a project is too big to start, tear off a bite-sized chunk, chew it and swallow.

Sometimes slower is faster, but who cares. You’ve started.

If you can’t start, help some else start. You’ll both be better for it.

Fear blocks starting. But if you’re going to be afraid, you might as well start.

The only way to guarantee failure is to fail to start.

After you start, tell your best friend.

When starting, be clear on your location and less clear on the destination.

You either start or you don’t. With starting, there’s no partial credit.

Don’t start unless you’re going to finish.

Starting is scary, right up until you start.

The best way to free up time to start a good project is to stop a bad one.

Sometimes it’s best to stop starting and start finishing.

You don’t need permission to start. You just need to start.

Start small. If that doesn’t work, start smaller.

In the end, starting starts with starting.

And if you don’t start you can’t finish.

 

Image credit — jakeandlindsay

Mike Shipulski Mike Shipulski
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