Archive for the ‘Innovation’ Category

Certainty or novelty – it’s your choice.

When you follow the best practice, by definition your work is not new. New work is never done the same way twice.  That’s why it’s called new.

Best practices are for old work. Usually, it’s work that was successful last time.  But just as you can never step into the same stream twice, when you repeat a successful recipe it’s not the same recipe. Almost everything is different from last time.  The economy is different, the competitors are different, the customers are in a different phase of their lives, the political climate is different, interest rates are different, laws are different, tariffs are different, the technology is different, and the people doing the work are different. Just because work was successful last time doesn’t mean that the old work done in a new context will be successful next time.  The most important property of old work is the certainty that it will run out of gas.

When someone asks you to follow the best practice, they prioritize certainty over novelty.  And because the context is different, that certainty is misplaced.

We have a funny relationship with certainty.  At every turn, we try to increase certainty by doing what we did last time.  But the only thing certain with that strategy is that it will run out of gas.  Yet, frantically waving the flag of certainty, we continue to double down on what we did last time.  When we demand certainty, we demand old work.  As a company, you can have too much “certainty.”

When you flog the teams because they have too much uncertainty, you flog out all the novelty.

What if you start the design review with the question “What’s novel about this project?” And when the team says there’s nothing novel, what if you say “Well, go back to the drawing board and come back with some novelty.”?  If you seek out novelty instead of squelching it, you’ll get more novelty.  That’s a rule, though not limited to novelty.

A bias toward best practices is a bias toward old work.  And the belief underpinning those biases is the belief that the Universe is static.  And the one thing the Universe doesn’t like to be called is static.  The Universe prides itself on its dynamic character and unpredictable nature.  And the Universe isn’t above using karma to punish those who call it names.

“Stonecold certainty” by philwirks is licensed under CC BY-ND 2.0

Continuous Improvement Is Dead

Continuous Improvement – Do what you did last time, just three percent better, so none of your people can try new things.

Discontinuous Improvement – Make a radical step-change in performance at the expense of continuously improving it.

 

Continuous Improvement – Do what you did last time so you can say “no” to projects that are magical.

No-To-Yes – Make the product do something it cannot.  That way you can sell a new value proposition to new customers and new markets.  And you can threaten those that are clinging to your tired value proposition.

 

Continuous Improvement – Do what you did last time so no one will be threatened by meaningful change.

Less With Far Less – Reduce the goodness of today’s offering to free up design space and create an entirely new offering that provides 80% of the goodness at 20% of the price. That way, you can sell a whole new family of offerings to customers that cannot buy today’s offering.

 

Continuous Improvement – Do what you did last time so we can rest on our laurels.

Obsolete Your Best Work – Design and commercialize new offerings that purposefully make obsolete your most profitable offering.  This requires level 5 courage.

 

And how do you do all this? Mobilize the Trust Network.

 

“fear — may 9 (day 9)” by theogeo is licensed under CC BY 2.0

What should we do next?

Anonymous: What do you think we should do next?

Me: It depends.  How did you get here?

Anonymous: Well, we’ve had great success improving on what we did last time.

Me: Well, then you’ll likely do that again.

Anonymous: Do you think we’ll be successful this time?

Me: It depends.  If the performance/goodness has been flat over your last offerings, then no.  When performance has been constant over the last several offerings it means your technology is mature and it’s time for a new one.  Has performance been flat over the years?

Anon: Yes, but we’ve been successful with our tried-and-true recipe and the idea of creating a new technology is risky.

Me: All things have a half-life, including successful business models and long-in-the-tooth technologies, and your success has blinded you to the fact that yours are on life support.  Developing a new technology isn’t risky. What’s risk is grasping tightly to a business model that’s out of gas.

Anon: That’s harsh.

Me: I prefer “truthful.”

Anon: So, we should start from scratch and create something altogether new?

Me: Heavens no. That would be a disaster. Figure out which elements are blocking new functionality and reinvent those. Hint: look for the system elements that haven’t changed in a dog’s age and that are shared by all your competitors.

Anon: So, I only have to reinvent several elements?

Me: Yes, but probably fewer than several.  Probably just one.

Anon: What if we don’t do that?

Me: Over the next five years, you’ll be successful.  And then in year six, the wheels will fall off.

Anon: Are you sure?

Me: No, they could fall off sooner.

Anon: How do you know it will go down like that?

Me: I’ve studied systems and technologies for more than three decades and I’ve made a lot of mistakes.  Have you heard of The Voice of Technology?

Anon: No.

Me: Well, take a bite of this – The Voice of Technology. Kevin Kelly has talked about this stuff at great length.  Have you read him?

Anon: No.

Me: Here’s a beauty from Kevin – What Technology Wants. How about S-curves?

Anon: Nope.

Me: Here’s a little primer – Beyond Dead Reckoning. How about Technology Forecasting?

Anon: Hmm.  I don’t think so.

Me: Here’s something from Victor Fey, my teacher. He worked with Altshuller, the creator of TRIZ – Guided Technology Evolution.  I’ve used this method to predict several industry-changing technologies.

Anon: Yikes! There’s a lot here. I’m overwhelmed.

Me: That’s good!  Overwhelmed is a sign you realize there’s a lot you don’t know.  You could be ready to become a student of the game.

Anon: But where do I start?

Me: I’d start Wardley Maps for situation analysis and LEANSTACK to figure out if customers will pay for your new offering.

Anon: With those two I’m good to go?

Me: Hell no!

Anon: What do you mean?

Me: There’s a whole body of work to learn about. Then you’ve got to build the organization, create the right mindset, select the right projects, train on the right tools, and run the projects.

Anon: That sounds like a lot of work.

Me: Well, you can always do what you did last time. END.

“he went that way matey” by jim.gifford is licensed under CC BY-SA 2.0

The Dark Underbelly of Success

Best practice – a tired recipe you recycle because you think the world is static.
Emergent practice – a new way to work created from whole cloth because the context is new.

Worst practice – a best practice applied to a world that has changed around you.
Novel practice– work that recognizes the world is a different place but is dismissed out-of-hand because everyone wants to live in the comfortable past.

Continuous improvement – when you try to put a shine on a tired, old process that worked ten years ago.
Discontinuous improvement – work that is disrespectful to the Status Quo and hurts people’s feelings.

Grow the core – when you do what you did in 2010 because you don’t know what else to do.
Obsolete your best work – when you do work that makes it clear to your customers that they should not have purchased your most successful product.

Reduce operating expense – what you do when you don’t know how to grow the top line and want to eliminate the flexibility to respond to an uncertain future.
Grow the top line – when you launch a new product that causes your customers to happily throw away the product they just bought from you.

A PowerPoint slide deck that defines your strategic plan – an electronic work product that distracts you from the reality of an ever-changing future.
A new product that is radically better than your last one – what you should create instead of a PowerPoint slide deck that defines your strategic plan.

MBA – a university degree that gives you a pedigree so companies hire you.
Ph.D. – a university degree that teaches you to learn, but takes too long.

Return On Investment (ROI) – a calculation that scuttles new work that would reinvent your business.
Imagination – thinking that will help you navigate an uncertain future, but is knee-capped by the ROI calculation.

Standard work – a process you used last time and will use next time because, again, you think the world is static.
Judgment – thinking that creates a whole new business trajectory to address an uncertain future but can get you fired if you use it.

A sustainable competitive advantage – a relic of a slow-moving world.
Continual change – the only way to deal with an ever-accelerating future.

Success – profits from work done by people who retired from your company some time ago.
Success – the thing that blocks you from working on the unproven.

Success – what pays the bills.
Success – what jeopardizes your ability to pay the bills in five years.

Success – why people think old practices are best practices.
Success – why new work is so difficult to do.

Success – why continuous improvement carries the day.
Success – why discontinuous improvement threatens.

Success – the mother of complacency.

“dark underbelly” by JoeBenjamin is licensed under CC BY-NC 2.0

The Innovation Mantra

We have an immense distaste for uncertainty. And, as a result, we create for ourselves a radical and unskillful overestimation of our ability to control things. Our distaste of uncertainty is really a manifestation of our fear of death. When we experience and acknowledge uncertainty, it’s an oblique reminder that we will die. And that’s why talk ourselves into the belief we can control thing we really cannot.  It’s a defense mechanism that creates distance between ourselves and from feeling our fear of death.  And it’s the obliquity that makes it easier to overestimate our ability to control our environment.  Without the obliquity, it’s clear we can’t control our environment, the very thing we wake up to every morning, and it’s clear we can’t control much. And if we can’t control much, we can’t control our aging and our ultimate end.  And this is why we reject uncertainty at all costs.

Predictable, controllable, repeatable, measurable – overt rejections of uncertainty. Six Sigma – Measure, Analyze, Improve, Control – overt rejection of uncertainty.  Standard work – rejection of uncertainty. Don’t change the business model – a rejection of uncertainty. A rejection of novelty is a rejection of uncertainty. And that’s why we don’t like novelty. It scares us deeply. And it scares us because it reminds us that everything changes, including our skin, joints, and hairline. And that’s why it’s so challenging to do innovation.

Innovation reminds us of our death and that’s why it’s difficult?  Really? Yes.

Six Sigma is comforting because its programmatic illusion of control lets us forget about our death? Yes.

The aging business model reminds us of our death and that’s why we won’t let it go? Yes.

That’s crazy! Yes, but at the deepest level, I think it’s true.

I understand if you disagree with my rationale. And I understand if you think my thinking is morbid. If that’s the case, I suggest you write down why you think it’s so incredibly difficult to create a new business model, to do novel work, or to obsolete your best work. I’ll stop for a minute to give you time to grab a pen and paper. Okay, now put your pen to paper and write down why doing innovation (doing novel work) is so difficult. Now, ask yourself why that is. And do that three more times. Where did you end up? What’s the fundamental reason why doing new work (and the uncertainty that comes with it) is so difficult to do?

To be clear, I’m not advocating that you tell everyone that innovation is difficult because it reminds them that they’ll die. I explained my rationale to give you an idea of the magnitude of the level of fear around uncertainty so that, when someone is scared to death of novelty, you might help them navigate their fear.

Trying something new doesn’t invalidate what you did over the last decade to grow your business, nor will it replace it immediately, if it all.  Maybe the new work will add to what you’ve done over the last decade. Maybe the new work will amplify what’s made you successful. Maybe the new work will slowly and effectively migrate your business to greener pastures. And maybe it won’t work at all. Or, maybe your customers will make it work and bury you and your business.

With innovation, start small.  That way the threat is smaller.  Run small experiments and share the results, especially the bad results.  That way you demonstrate that unanticipated results don’t kill you and, when you share them, you demonstrate that you’re not afraid of uncertainty. Try many things in parallel to demonstrate that it’s okay that everything doesn’t turn out well and you’re okay with it.  And when someone asks what you’ll do next, tell them “I don’t know because it depends on how the next experiment turns out.”

When you’re asked when you’ll be done with an innovation project, tell them “I don’t know because the work has never been done before.” And if they say you must give them a completion date, tell them “If you must have a completion date, you do the project.”

When you’re running multiple experiments in parallel and you’re asked what you’ll do next, tell them you’ll do “more of what works and less of what doesn’t.” And if they say “that’s not acceptable”, then tell them “Well, then you run the project.”

We don’t have nearly as much control as our minds want to us believe, but that’s okay as long as we behave like we know it’s true. Uncertainty is uncomfortable, but that’s not a bad thing. In fact, I think it’s a good thing.

If people aren’t afraid, there can be no uncertainty. And if there’s no uncertainty, there can be no novelty. And if there’s no novelty, there can be no innovation. If people aren’t afraid, you’re doing it wrong.

As a leader, tell them you’re afraid but you’re going to do it anyway.

As a leader, tell your team that it’s natural to be afraid and their fear is a leading indicator of innovation.

As a leader, tell them there’s one thing you’re certain about – that innovation is uncertain.

And when things get difficult, repeat the Innovation Mantra: Be afraid and do it anyway.

“Mantra” by j / f / photos is licensed under CC BY-ND 2.0

When is it innovation theater?

When you go to the cinema or the playhouse you go you see a show. The show may be funny, it may be sad, it may be thought-provoking, it may be beautiful, and it may take your mind off your problems for a couple of hours; but it’s not real.  Sure, the storyline is good, but it came from someone’s imagination.  And because it’s a story, it doesn’t have to bound by reality. Sure, the choreography is catchy, but it’s designed for effect. Yes, the cinematography paints a good picture, but it’s contrived. And, yes, the actors are good, but they’re actors. What you see isn’t real. What you see is theater.

If you are asked to focus on the innovation process, that’s theater.  Innovation doesn’t care about process; it cares about delivering novel customer value. The process isn’t most important, the output is. When there’s an extreme focus on the process that usually means an extreme focus on the output of the process would be embarrassing.

If you are tasked to calculate the net present value of the project hopper, that’s theater. With innovation, there’s no partial credit for projects you’re not working on. None. The value of the projects in the hopper is zero. The song about the value of the project hopper is nothing more than a catchy melody performed to make sure the audience doesn’t ask about the feeble collection of projects you are working on. And, assigning a value to the stagnant project hopper is a creative storyline crafted to hide the fact you have too many projects you’re not working on.

If you are asked to create high-level metrics and fancy pie charts, that’s innovation theater.  Process metrics and pie charts don’t pay the bills. Here’s innovation’s script for paying the bills: complete amazing projects, launch amazing products, and sell a boatload.  Full stop.  If your innovation script is different than that, ball it up and throw it away along with its producer.

If the lame projects aren’t stopped so better ones can start, if people aren’t moved off stale projects onto amazing ones, if the same old teams are charged with the innovation mandate, if new leaders aren’t added, if the teams are measured just like last year, that’s innovation theater. How many mundane projects have you stopped? How many amazing projects have you started? How many new leaders have you added? How many new teams have you formed? How will you measure your teams differently? How do you feel about all that?

If a return on investment (ROI) calculation is the gating criterion before starting an amazing project, that’s innovation theater.  Projects that could create a new product family with a fundamentally different value proposition for a whole new customer segment cannot be assigned an ROI because no one has experience in this new domain. Any ROI will be a guess and that’s why innovation is governed by judgment and not ROI.  Innovation is unpredictable which makes an ROI is impossible to predict. And if your innovation process squeezes judgment out of the storyline, that’s a tell-tale sign of innovation theater.

If the specifications are fixed, the resources are fixed, and the completion date is fixed, that’s innovation theater.  Since it can be innovation only when there’s novelty, and since novelty comes with uncertainty, without flexibility in specs, resources, or time, it’s innovation theater.

If the work doesn’t require trust, it’s innovation theater. If trust is not required it’s because the work has been done before, and if that’s the case, it’s not innovation.

If you know it will work, it’s innovation theater.  Innovation and certainty cannot coexist.

If a steering team is involved, it’s innovation theater.  Consensus cannot spawn innovation.

If more than one person in charge, it’s innovation theater.  With innovation, there’s no place for compromise.

And what to do when you realize you’re playing a part in your company’s innovation theater? Well, I’ll save that for another time.

“Large clay theatrical mask, Romisch-Germanisches Museum, Cologne” by Following Hadrian is licensed under CC BY-SA 2.0

How to Know if Your Idea is Novel

When your idea is novel, no one will steal it. No NDA required.

If your idea is truly novel, no one will value it. And that’s how you’ll know it’s novel.

When your idea is novel, no one will adopt it. This isn’t much of a stretch as, due to not-invented-here (NIH), no one will adopt anyone else’s idea – novel or not.

When your idea is novel, it will be misunderstood, even by you.

When your idea is novel, it will evolve into something else and then something else. And then it might be ready for Prime Time.

Novel ideas are like orchids – they need love beyond the worth of their blossom.

If your idea hasn’t failed three times, it’s not worth a damn.

The gestation period for novel ideas is long; if it comes together quickly, it’s not novel.

The best way to understand your novel idea is to make a prototype. And then another one.

Your first novel idea won’t work, but it will inform the next iteration. And that one won’t work either, and the cycle continues. But that’s how it goes with novel ideas.

If everyone likes your novel idea, it isn’t novel.

If no one likes your novel idea, you may be on to something.

If you’re not misunderstood, you’re doing it wrong.

If your dog likes your idea, you can’t say much because he loves you unconditionally and will always tell you what you want to hear.

If you think your novel idea will create a whole new product line in two years, your timeline is off by a factor of three, or five.

If your most successful business unit tries to squash your novel idea it’s because it threatens them. Stomp on the accelerator.

When you are known to give air cover to novel ideas, the best people want to work for you.

 

“it seemed like a good idea at the time” by woodleywonderworks is licensed under CC BY 2.0

Technical Risk, Market Risk, and Emotional Risk

Technical risk – Will it work?

Market risk – Will they buy it?

Emotional risk – Will people laugh at your crazy idea?

 

Technical risk – Test it in the lab.

Market risk – Test it with the customer.

Emotional risk – Try it with a friend.

 

Technical risk – Define the right test.

Market risk – Define the right customer.

Emotional risk – Define the right friend.

 

Technical risk – Define the minimum acceptable performance criteria.

Market risk – Define the minimum acceptable response from the customer.

Emotional risk – Define the minimum acceptable criticism from your friend.

 

Technical risk – Can you manufacture it?

Market risk – Can you sell it?

Emotional risk – Can you act on your crazy idea?

 

Technical risk – How sure are you that you can manufacture it?

Market risk – How sure are you that you can sell it?

Emotional risk – How sure are you that you can act on your crazy idea?

 

Technical risk – When the VP says it can’t be manufactured, what do you do?

Market risk – When the VP says it can’t be sold, what do you do?

Emotional risk – When the VP says your idea is too crazy, what do you do?

 

Technical risk – When you knew the technical risk was too high, what did you do?

Market risk – When you knew the market risk was too high, what did you do?

Emotional risk – When you knew someone’s emotional risk was going to be too high, what did you do?

 

Technical risk – Can you teach others to reduce technical risk? How about increasing it?

Market risk – Can you teach others to reduce technical risk? How about increasing it?

Emotional risk – Can you teach others to reduce emotional risk? How about increasing it?

 

Technical risk – What does it look like when technical risk is too low? And the consequences?

Market risk – What does it look like when technical risk is too low? And the consequences?

Emotional risk – What does it look like when emotional risk is too low? And the consequences?

 

We are most aware of technical risk and spend most of our time trying to reduce it.  We have the mindset and toolset to reduce it.  We know how to do it.  But we were not taught to recognize when technical risk is too low.  And if we do recognize it’s too low, we don’t know how to articulate the negative consequences. With all this said, market risk is far more dangerous.

We’re unfamiliar with the toolset and mindset to reduce market risk. Where we can change the design, run the test, and reduce technical risk, market risk is not like that.  It’s difficult to understand what drives the customers’ buying decision and it’s difficult to directly (and quickly) change their buying decision. In short, it’s difficult to know what to change so they make a different buying decision.  And if they don’t buy, you don’t sell. And that’s a big problem.  With that said, emotional risk is far more debilitating.

When a culture creates high emotional risk, people keep their best ideas to themselves. They don’t want to be laughed at or ridiculed, so their best ideas don’t see the light of day. The result is a collection of wonderful ideas known only to the underground Trust Network. A culture that creates high emotional risk has insufficient technical and market risk because everyone is afraid of the consequences of doing something new and different.  The result – the company with high emotional risk follows the same old script and does what it did last time.  And this works well, right up until it doesn’t.

Here’s a three-pronged approach that may help.

  1. Continue to reduce technical risk.
  2. Learn to reduce market risk early in a project.
  3. And behave in a way that reduces emotional risk so you’ll have the opportunity to reduce technical and market risk.

Image credit — Shan Sheehan

If you’re not creating derision, why bother?

When you see good work, say so.

When you see exceptional work, say so in public.

When you’ve had good teachers, be thankful.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

When your work makes waves, that’s nice.

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

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

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

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

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

Image credit — Herry Lawford

Say no to say yes.

If the project could obsolete your best work, do it.  Otherwise, do something else.

But first, makes sure there’s solid execution on the turn-the-crank projects that pay the bills.

If you always say yes to projects, you never have the bandwidth to do the magical work no one is asking for.

When was the last time you used your discretion to work on a project of your choosing? How do you feel about that?

If you’re told to stop the project by the most successful business unit, stomp on the accelerator.

The best projects aren’t the ones with the best ROI. The best projects are the ones that threaten success.

If you’re certain of a project’s ROI, there is no novelty.

If the project has novelty, you can’t predict the ROI. All you can do is decide if it’s worth doing.

There’s a big difference between calculating an ROI and predicting the commercial success of a project.

If your company demands certainty, you can be certain the new projects will be just like the old ones.

If the success of a project hinges on work hasn’t been done before, you may have a winner.

Say yes to predictability and you say no to novelty.

Say no to novelty and you say no to innovation.

Say no to innovation and you say no to growth.

Say no to growth and the game is over.

Say no to good projects so you can say yes to the magical ones.

Say no to ROI so you work on projects that could reinvent the industry.

If the project doesn’t excite, just say no.

Image credit – Lucie Provincher

What You Don’t Have

If you have more features, I will beat you with fewer.

If you have a broad product line, I will beat you with my singular product.

If your solution is big, mine will beat you with small.

If you sell across the globe, I will sell only in the most important market and beat you.

If you sell to many customers, I will provide a better service to your best customer and beat you.

If your new projects must generate $10 million per year, I will beat you with $1 million projects.

If you are slow, I will beat you with fast.

If you use short term thinking, I will beat you with long term thinking.

If you think in the long term, I will think in the short term and beat you.

If you sell a standardized product, I will beat you with customization.

If you are successful, I will beat you with my hunger.

If you try to do less, I will beat you with far less.

If you do what you did last time, I will beat you with novelty.

If you want to be big, I will be a small company and beat you.

I will beat you with what you don’t have.

Then, I will obsolete my best work with what I don’t have.

Your success creates inertia. Your competitors know what you’re good at and know you’ll do everything you can to maintain your trajectory.  No changes, just more of what worked.  And they will use your inertia. They will start small and sell to the lowest end of the market. Then they’ll grow that segment and go up-scale. You will think they are silly and dismiss them. And then they will take your best customers and beat you.

If you want to know how your competitors will beat you, think of your strength as a weakness.  Here’s a thought experiment to explain.  If your success is based on fast, turn speed into weakness and constrain out the speed. Declare that your new product must be slow. Then, create a growth plan based on slow.  That growth plan is how your competitors will beat you.

Your growth won’t come from what you have, it will come from what you don’t have.

It’s time to create your anti-product.

Mike Shipulski Mike Shipulski
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