Innovaro / Strategos - Strategic Insights about Innovation

Great storytelling, a vital ingredient for your innovation success

How often have you heard people talk about their ideas and immediately thought it was the greatest thing ever? When was the last time you went to a conference to listen to your fellow innovation practitioners and be amazed by the way they told the story about innovation in their company?

Storytelling is a vital ingredient for innovation success. Without it your idea might be great but if it doesn’t move people emotionally you fail to make a connection. Especially if you are trying to convince people about something that doesn’t yet exist, a new opportunity that addresses a recently discovered unmet customer need for example. Stories bring your ideas to life, creates a mental picture for people to relate to and visualize how it might work.

Innovation = Admiration

For the fifth year in a row Apple has been named the World’s Most Admired Company by Fortune Magazine – as well as the most innovative. Whilst it is not unusual to see Apple top the innovation charts, on this occasion beating Google into 2nd place, it is a testament to their enormous success and the impact their products have on our daily lives that this has translated consistently into general admiration.

However on many levels this is not surprising. What do people usually admire? Success for sure, super-cool designs for sure, people and organisations that ‘think differently’ for sure, and iconic individuals also help … so it is not surprising that Apple retains its ranking even though it has recently been associated with issues in its supplier companies in China. So what does this say in general about innovation and innovative companies. Well clearly if you want to be ‘admired’ it helps to be an innovation leader – Google in no.2 position needs no explanation, Amazon.com at no.3 has pioneered innovative business models for over 10 years as has Fedex at no.6. Starbucks at no.8 pioneered a new form of retail experience and business model and at no.10 Southwest Airlines re-invented airline travel. I could continue down the list with BMW at no.14 sharing some of Apple”s attributes of design and operational excellence.

In summary it is gratifying that those companies that push boundaries and lead innovation efforts in their industries and markets are being universally recognised …. And at a personal level it is great to see some of our clients in the list.

 

Game Changers and Rule Breakers

Yesterday I attended a performance by famous Dutch drummer Cesar Zuiderwijk from a band called the Golden Earring, known for its international hits Radar Love (1973) and Twilight Zone (1982). Since it was organized by Rhythm Impact, a local drum school, the performance was preceded by a drum clinic where people (many of them kids between 8-15) could ask Cesar questions. In the age of youtube all the kids had closely observed Cesar’s playing style and were able to ask very probing questions why he played some things differently than they had been taught in drumschool. In his entertaining stories Cesar drew many parallels with other disciplines such as sports and quoted the famous example of the Fosbury flop (Dave Fosbury radically changed the way athletes performed the high jump in 1968) to demonstrate it can pay off to question common beliefs (breaking the rules). A result of Cesar's challenging nature is his ambidextrous drumstyle (whatever he can do with his left hand/foot he can do with his right and vice versa) which is not commonly taught at drum schools. This ability enables him to play different rhythm styles with greater ease and allows for more experimentation in his musical adventures. There’s more detail to it (he also mentioned a different more energy efficient way of drumming by changing the way you play) but the point is he continuously questions common belief to develop his playing style which is a way of thinking that can pay great dividends if you are attuned to it. 

What lessons can we learn from this example:

• Questioning common beliefs can lead to making changes or doing things differently that provide much better results
• Identifying analogies from other disciplines (industries) can stimulate thinking that leads to different approaches

At the front end of the innovation process most businesses nowadays include trend analysis and synthesise consumer/customer behaviours into insights that drive their idea generation. Applying the lessons from the example above can lead to developing additional different perspectives on how we do business as a company or as an industry, how we view our markets, customers etc. The good news is that you can train people how to do this systematically. The process can be simply described (although we do use special tools to make it even easier).

1. explore how we do business today, what our assumptions are about our customers etc.
2. question why we do it in certain ways, these are your orthodoxies or underlying beliefs
3. explore which of those orthodoxies are valid, i.e. help the business perform and which do not hold true anymore and could prevent you to evolve
4. think about what you would do differently if certain beliefs could be ignored

Questioning beliefs is a way to think about how you can challenge the way an industry operates. Industries operate on many “unwritten” rules that have evolved over time to help them perform more efficiently. Once the rules are commonly accepted the industry “forgets” they are there even though at some point new developments in technology and consumer behaviour indicate the rules have reached their sell by date. The first company to recognise this and develop new value propositions for their customers,  new ways to serve them, new ways to compete can be the rule breaker, the company that will be recognised as “having changed the game forever” and reap the rewards.

The starting point is about developing rich insights by applying different tools and approaches and using these to stimulate idea generation at the front end of your innovation process. We would argue that broadening the front end to include orthodoxies (questioning common belief) and analogies (what can we learn from examples that originate in other disciplines or industries) would lead to even richer idea generation and ultimately better results.

How do you organize teams for innovation?

Today organisations are leaner than ever. The recent downturn has left organisations with no spare capacity and they struggle to make resources available for innovation initiatives. It is often a challenge to complete the day job! Of course it may be that innovation IS the day job, and that is great, but we find that most organisations need to formally take people out of their current roles and focus them on specific innovation challenges.

So, one question that we are always asked and one that often has the most significance for innovation projects is this; 'how do we organise and resource our project team?' This is particularly important where there is no central innovation group and we are at the start of an innovation journey. This is also crucially important where the proposed project members have full-time roles that can not adequately be covered in their absence.  But often these people are simply the right people for the project and some compromise has to be reached.

Given the above constraints, that virtually all organisations face, we find that the following actions can have a huge impact;

1. Use of a systemic approach to innovation works best since there is a structure around which support for the teams can be built.  Such an approach, e.g. our 3-Diamond approach, focuses the project teams around key activities and key deliverables.  Pressure points can be identified in advance and support organised accordingly whether it be via comprehensive training materials or one-on-one coaching.

2. We work with a small core team, that is usually but not always full-time, and we 'borrow' expert resources at appropriate times to contribute their expertise to the project, whether it be for an ideation session, to build out first concepts, or to plan market launch. Using such an approach also has a secondary benefit in that it 'spreads the gospel' of innovation far and wide within the organisation, thus building greater awareness and developing capability in more people.

3. Use of an innovation platform that facilitates capture of knowledge and progresses project deliverables improves the effectiveness of teams.  Such platforms, e.g. our Launchpad Application, can allow project team members to work virtually thus extending the reach of the project and also allows for global project teams to contribute in such a way that the ball can be picked up by a team member when they arrive at work the next day.  Increasingly organisations are looking to use leading edge software solutions to drive greater effectiveness with teams.

Of course as well as the organisation of the project there are critical issues around selection of project members and the complementary skills and competencies that drive innovation success .. but we'll leave that for another blog post :-)

No innovation without aspiration

Which companies do you think have a clear aspiration? Why do companies exist, what is their purpose apart from servicing their customers and making a profit? Gary Hamel, co-founder of Strategos talks in his recently published book “What matters now” about how management’s  goal to maximize shareholder wealth is not enough.  “groundbreaking ideas are born in the gap between aspirations and resources” is often heard when Gary presents about innovation and this holds true for individuals as well as organizations.

Too often there doesn’t seem to be a “north star” to guide innovation initiatives and the focus is primarily on filling a pipeline with good quality ideas. When there is no “north star” to guide people they will naturally focus on the current business operations. Ideas will then largely be about improving what’s already out there.

There are a few organizations that do make it clear why they exist and what their ambition is.

Innovation Update: Technology Trajectories for the Next Decade

By Chris Carbone from Innovaro's Insights & Intelligence. To read more visit their trend and foresight blog.

In a world that is changing ever more quickly, being able to look ahead and understand which aspects of that world will be changing, and to what extent, is a valuable tool for any innovator.

For over a decade, Innovaro's Global Lifestyles and Technology Foresight projects have fueled clients' innovation engines by providing them with a steady stream of insights about the future of consumer life and technology. In January 2012, Innovaro brought this accumulated knowledge and experience together to produce the Technology Trajectories research series. It explored the following questions:

• What technologies will move from the niche to the mainstream in the next decade and make up the consumer toolkit of 2020?

• How will these technologies work in concert to change daily life and the consumer experience?

• How will important areas of consumer life - how people shop, work, socialize, and entertain themselves - be changed by this next wave of innovation?

In this issue of Innovation Update, we provide a top-line review of the Technology Trajectories research.

Experimentation: learn a lot, invest a little

 

So you have had a team look at trends and consumer needs, generated lots of ideas and developed a few draft business models around them. Since the ideas are slightly outside of your comfort zone, beyond what the company is currently providing to its customers, you are making lots of assumptions about who the customer is, whether they would value your offering and how you are able to make a profit. Many businesses struggle in taking the next step. If they take any action it will usually include asking the team to do more market research, develop a solid business case so the management team can take a view and decide whether it is worth the investment needed to launch the idea. The business case cannot be made and management turns the idea down thinking it is too risky. Recognise this scenario?

This is why experimentation matters. In its true form it can help a business take the necessary next steps without feeling they are making a very risky bet. Big uncertainties mean more perceived risk and a lower likelihood of progressing the idea to a stage where company leaders can make an informed and sensible decision to launch it into the market.

Learn a lot, invest a little is the principle that teams should follow here. Question is whether you can design a systematic approach to do this? The answer is yes and there have been many examples where running simple experiments show teams whether their assumptions hold true (or not).

Innovating by leveraging your core competence

 

We all have one (or more) installed in our home and it isn't a product that we think too much about. A thermostat controls the temperature and these days most of them can be programmed. It's nice to get out of bed in the morning to find a warm and comfortable home so you won’t shiver when you sit down and have your cup of coffee. But during the day and evening most people often override the program to set the temperature manually only to forget to switch the program back on later.

Recognise this story? It probably isn't because the devices cannot accommodate our needs, all of them have a wide range of functions and programmable features. But paging through a manual to find out how to use it is not very appealing and so nobody makes the effort to learn. And when you have to buy one they all seem the same, ugly boring beige boxes.

So how do you innovate something as common as a thermostat? A startup company in the US is showing how this can be done. Nest was co-founded by Tony Fadell, the man who led the team that gave us the iPod and now turns his attention to a completely different device. But there is a rationale behind his decision to focus on thermostats which comes down to answering 3 key questions:

1. Is there a need (for a different device)?
2. Can we offer something that is different and better from what is available?
3. Is it an attractive business to get into?

You do not need a detailed business case to address these 3 questions, something many companies require their employees to develop once they have an idea. People who recognise that business cases in this stage are usually innacurate or create false expectations focus more on the story behind the idea and how convincing it addresses the above questions. Is it a compelling story? Do you see how you could experiment to learn about the opportunity and reduce risk?

Mr. Fadell story (see the video below) addresses these questions in a simple, sensible way. People like to have nice things in their home that are simple to use, this device controls 50% of your home energy consumption so it is important and there are over 250 million devices installed in the US with an annual consumption of 10 million so it could be worthwhile as a business. Furthermore there is not a lot of differentiation in existing products and with Mr. Fadell’s experience he feels confident that he can create something different that appeals to the consumer rather than contractors.

The Nest thermostat that the team created learns your behavior as you control the temperature manually for a few days, there is no need to programme it yourself. It is equipped with various types types of sensors so it knows when to turn down the heating if you’re not at home and when to turn it back up if you are.

The final design of the Nest shows the team that created it has a deep empathy for the consumer by understanding their behaviors and were able to translate common needs into a thermostat design that feels more like the experience people have with an iPhone. Looking at this in a more systematic way it means that core competence can stretch innovation into new territories, in this case from iPods to thermostats. Makes you think what could be next on the Nest team radar?

And the result? Mr. Fadell’s team has taken thermostats from being a boring beige box on your wall to something you’d buy because it looks cool and beautiful, is easy to use and saves energy. The only thing they underestimated was its appeal as it is currently sold out!

 

 

 

Can companies innovate too much?

Well, companies can certainly innovate too little, and sometimes that is intentional, but can companies really innovate too much?  The recently appointed CEO of Research In Motion (RIM), who make Blackberry, made the interesting statement this week .. ‘We are a great innovative company, but sometimes we innovate too much while we’re building a product’.

Now, in a market where its competitors have succeeded through product, service & business model innovation, such a statement could be seen to be contrary to the prevailing wisdom in the sector, and a recipe for disaster. RIM, as we know, is a company in trouble .. by the end of last year its share price was less than 10% of its maximum in mid 2008 and so a further loss of competitiveness against the likes of Google and Apple could be very problematic.

However perhaps this is exactly what RIM need … less ‘innovation’ in the commonly mis-understood sense of a higher specified device and more focus on ‘core competency’ and what their users really need.

Many pundits have expressed opinions about what they should do next, from moving towards an app driven device to looking to sell the business to one of its bigger rivals.  However few have actually make the bold statement that RIM should focus on what it does best, which is make very good business machines that provide a reliable email and calendar application with a sturdy interface that has enough battery life for a long business day.

The new CEO has said that RIM has ‘innovation at its core’ and by following the approach above I believe that RIM is actually continuing to be innovative as we define innovation here at Innovaro/Strategos.  It would be clearly and unambiguously using its core competencies by applying them to a set of insights about its present and future consumers whilst looking to overturn the industry orthodoxy that everything must look and perform like an iPhone. So, a clear view of competitive positioning based upon competencies;  a clear view of the future both in terms of technology and lifestyles; real insight into what their target consumer segments need; and a willingness to over-turn and challenge current paradigms.  Perhaps this would not ultimately bring success but let’s be clear that this is absolutely innovation at work and in a very fundamental way.

Perhaps in the long term fruit wars the Apple will squash the Blackberry, but perhaps a truly innovative approach will help RIM regain a stronger position in the market.

Apple's continued success

On a recent blog post we discussed ’How to create a culture of innovation’ and within that article we mentioned Apple and how it had been able to maintain a constant focus of innovation mainly through the inspirational leadership of Steve Jobs. We made the point that not every company is lucky enough to have a Steve Jobs at the helm and hence they need to build a culture of systemic innovation that taps into the capabilities of a broad range of staff.

 

Sadly Steve Jobs is no longer with us but his legacy lives on.  Many commentators predicted that the continuous success of Apple would falter without Steve Jobs at the helm (the implicit criticism being that it was all about him!), but the astonishing results announced yesterday start to demonstrate that Apple has been able to build a culture of systemic innovation and that the often predicted downturn post-Jobs is not going to materialise any time soon.

What does this tell us?  Three main things emerge.

1. Inspirational leadership does not succeed within a vacuum of talented and committed people and of course Apple has had this in abundance for many years – from Sir Jonathan Ive to Tim Cook. The ’great man’ theory that was applied to Apple and Jobs was true to a large extent but it was backed up by talented people and processes behind the scenes i.e. a true culture of innovation.
2. Innovation Leaders work to long term platform development plans (or migration maps) that seek to map out future product and service progression but also extract maximum value from existing products – a great example being the huge success of the iPhone 4S which contributed massively to the recent financial growth.  And of course we can expect an iPhone5, iPad3 etc in 2012.
3. Innovation Leaders don’t rest on their laurels!  They are constantly looking to the future. Predicting new Apple products or platforms is an industry in itself and we have the much hypothesised launch of a new TV to potentially look forward to in 2012.  And there will undoubtedly be others because Apple has constantly shown itself to be able to look ahead and make the right choices at the right time regarding new launches.

Many predicted that Apple’s astonishing success could not continue, especially without Jobs,  and maybe it won’t, but who would bet against a $500 share price this time next year. Not me!