Monthly Archives: January 2013

Innovation Management vs. Project Management

innovation PicProject management skills are in great demand today.  We all know the consequences of being weak at this important skill.  I can think of a number of projects where my teams came in over budget AND failed to meet expected performance requirements.   I can recall projects we completed where the end-user was largely unimpressed by the outcomes which did not meet user expectations.  I can also speak to a natural tendency in my R&D and engineering functions to over-design products, making them better in subtle ways important to our engineers – but not necessarily to any of our customers.  All these things need to be managed with some reasonable level of discipline.

OK. So we need to be more efficient, and more disciplined.  We get it.  But more and more people are recognizing the need to be more innovative as well.  As we get good at the art of project management, we also create barriers to innovation.  While it is an extreme case – just watch this NASA project management training video to see what I mean.

The idea of innovation and project management, to some seems an oxymoron.    This may be especially so if your idea of innovation is something that should be disruptive, game changing, or breakthrough in nature.  We do live in a world where we need cost cutting, efficiency, speed and focus as much as at any previous time.   We hear the rallying cries at the office: “Define the requirements precisely!”; “We need to guard against ‘scope-creep!’”; “Don’t over design this!”; “We must hit our milestone dates!”; “The user defines how much quality they are willing to pay for.”; “Time is money!” and so forth.

So how on earth are we supposed to innovate in that environment?  Innovation requires exploration, insight, divergent thinking, occasional blind alleys, and sometimes trial-and-error.  These seem incompatible with conventional Project Management thinking and training.

If one of the first steps in the project management process is to “define the requirements”, one key problem is that customers do not always know how to describe what they want.  I discussed this briefly in my article on Apple’s amazing market success with the iPOD.  The Apple device’s predecessor was the MP3 player.  At the time, these were expensive and lacked memory.   But Apple’s focus was much broader than designing a better, cheaper MP3 player.  They recognized that loading music content into MP3’s was awkward.  They saw that without an applications store (iTunes had not yet been invented – but was about to be), the MP3 movement would never win over mainstream users.   If you asked users what they wanted in their playback device, they may not have described iTunes as a need.  Why would they, they had no prior experience with such a marketplace.   We are all limited by our own life experiences and knowledge to what is possible when we set out trying to imagine anything new.   Defining requirements with an Innovation mind-set requires a different perspective.

In his intriguing article (see below), Jeff Belding argues that managing innovation projects does require a whole different approach – which is pretty similar to the Creative Problem Solving and Design Thinking methodologies taught by the Sarasota Center for Innovation.   In the table below, here are differences between what Belding calls INNOVATION MANAGEMENT as compared to traditional PROJECT MANAGEMENT:

Five Key Factors of Successful Project Execution

Key PM Factors

This innovation management approach is a fundamentally different way of thinking.  The main difference is in the SEARCHING and EXPLORING phases (essentially the problem definition – and requirements definition work) is considerably longer and more expansive that we traditionally consider.  Innovation management requires looking for new perspectives, divergent thinking, and multiple levels of problem defining.

While this may seem more energy-consuming (more costly), I think I would argue that a quick mediocre solution is less advantageous to a slower one that delivers much better outcomes.

I suppose it is possible to conclude that not all projects require innovative solutions, and perhaps more traditional project management methods may work just fine.  But if your project “problems” have to do with developing products, services, improving customer experiences or creating new business models – then the Innovation Management approach may be very useful.

Two other project management thinkers, from Delft University in The Netherlands also suggest that “radical innovation” is fundamentally different and must be managed differently.   In the table below, Sergey Filippov and Herman Mooi argue that a percentage of your projects call for breakthrough R&D, even if they involve more uncertainty and broad/vague project goals. 

Innovation Strategy

The implications of their paper (to me at least) suggests that if we have a wide array of projects on our to-do list, some portion of these call for an Innovation Management approach.  This is sort of the same conclusion reached by Professor Vijay Govindarajan, from Dartmouth’s Tuck School (read more in:  Three-Box System: Balancing Break-through Innovation with the Short-term).  He argues that organizations need three distinctly different sets of projects – hence the three boxes.   Projects in box 1 are about improving what we already do today.  The 2nd box, perhaps the most difficult, is about pruning away (killing) the projects products or even business segments that are chronic under performers.  (At Apple, one of Steve Jobs favorite sayings was “you have to be willing to ‘knife the baby’”.  And Apple repeatedly demonstrates a willingness to drop or cannibalize its own products that don’t live up to expectations, choosing instead to try introducing something else they hope will be better.)   The 3rd box is about creating the future and calls for bold innovation.

The Leadership factor

In addition to using an Innovation Management process, one more thing has to be in place.   We need a suitable leadership culture.

In my article Looking for Breakthrough Innovation I tell the story of one project, led by an inexperienced summer intern.  His internal customer was our operations department which was looking for a new process for achieving rapid die changes (as was being introduced with awesome results by the Japanese).   The intern, however, saw that by changing our manufacturing process design approach he could completely eliminate the need for die changes at all!  This was an innovative idea that ultimately produced substantial increases in productivity.   The problem was, his client didn’t want any part of it (at first).  They felt engineering wouldn’t support it, customers would not approve, and so on.   But the intern persisted and wrote his own set of requirements over the objections of his sponsor.

When to controversy was brewing – and our operations leader was expressing doubts about burning precious time and resources exploring a solution that would not be viable.  I weighed in and encouraged the innovation experiment.   Now, as CEO, my vote counted more than everyone else’s but without providing my support for the experimentation of this intern, we would never have achieved the innovation results.  True, it might have failed, and in that case my vote of support for this approach absolved everyone else of the responsibility for a failure or budget overrun.  Without this, I do not believe the innovation would have occurred.

Sometimes we as leaders need to set an expectation that we need to occasionally be bold, try the untested, and see what happens.   We as leaders need to create the cultural environment where innovation can thrive.

Other Resources

Change Must Be Pulled from the Top, Pushed from Below, by Len Brzozowski

Looking for Breakthrough Innovation, by Len Brzozowski

The Project Manager’s Approach to Innovation, by Paul R. Williams

Innovation Project Management: A Research Agenda, By Sergey Filippov and Herman Mooi, Delft University of Technology, Department Of Innovation Systems (The Netherlands)

Project Management and Innovation, by Jeff Belding 

Barriers to Innovation in Project Management, from PM


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Bodymetrics—Innovation in Strategy and Business

BodymetricsI love to find interesting examples of new businesses or business models that are unique or reflect a subtle understanding of emerging trends.  I have found a good one, I think, in the company Bodymetrics, a British firm that started from a university research project. 

More and more of us choose to buy our products (including shoes and clothing) from on-line merchants.   But until now, finding out if they fit couldn’t be done until the product arrived and you found you couldn’t zip your new jeans, or perhaps found them to be undesirably baggy.

Bodymetric’s technology creates 3D body maps. Unlike the controversial systems used by TSA which take X-ray-like images, the Bodymetrics version only measures the outside dimensions of your body, converting them into a virtual 3D image.  They moved from the laboratory into British retailer Selfridges installing a pod that a customer could walk into and have their measurements taken.  It would then recommend which sizes and styles of clothes would be a perfect fit.

Here is a clip of one of these in-store pods.

The in-store pods, while expensive, were a big hit in London and in Palo Alto.   But the high price would not support a widespread expansion of the system.   The next generation is an in-home version selling for about $150 that uses Microsoft Kinect technology (the same motion sensing system used for video gaming on products like the Wii).  Now, at home in your work-out clothes, you can shop for, virtually try on, and add clothes to your shopping cart and make a purchase.   Check out this video featuring the in-home version.

What this story illustrates is that their business success is based on tuning into important shopping trends and emotional motivations, and responding to them in a creative manner.  Bodymetrics seems to recognize:

1)      that shopping can be a frustrating and overly time-consuming activity.

2)     that many people prefer to shop on-line, even though buying clothes in that way can be very “hit-or-miss”.  Yet many of us still would prefer the convenience of shopping from home.

3)     that we want and appreciate a customized shopping experience (similar to what Amazon does by feeding us suggested items based on our past browsing history).  We want to be communicated with as if the seller of services is speaking to and interacting with us on a personal level.  (As social media guru Seth Godin says, we don’t want to receive e-mail anymore.  What we want is “ME-mail”).

4)     the trends in mass-customization and democratization of fashion (putting consumers more in a position to influence shopping experiences and trends.)  Note the company Polyvore whose web site allows visitors to create mix-and-match outfits, publish them and then see what styles are “trending” based on consumer submissions rather than the opinions of elite fashion designers.

The entire notion that we want to take greater control over our lives accessing and using information and technology to better serve us is at the core consumer motivation.  We live in a world where we have more choices and less time.   This means we ignore most of the traditional marketing messages aimed at us as we seek out situations that speak to us on a personal level – and put US in control.

Who knows, the term Kinect Shopping might someday soon become part of our lexicon. 

Two Approaches to Innovative Strategy Development

We spend a lot of time in business school teaching strategy as a process of understanding the competitive landscape, assessing the strengths and weaknesses of competitors and trying to figure out how to beat them.   That is one approach, and it is sometimes inevitable.

The other approach is to forget about competitors, and focus instead on the consumer.  What if we could understand their emotional drivers more deeply than anyone else?  What if we could see things that elude our main competitors?  This can be possible because we worked harder too empathetically understand customer needs.  Such is a path to leadership in your industry or segment.  In fact, we might even find ourselves on the forefront in shaping a whole new segment, product or service.  Isn’t that the magic of Steve Jobs and Apple?

It comes from exercising our powers of observation BEFORE engaging our powers of imagination.   We need to observe the world around us, sense which way the winds are blowing, and then ask how we might take advantage of key trends and serve unmet needs. 

This is not necessarily the domain of large corporations

Some of us think of Apple, with all their financial and human resources and think innovation is the domain of big companies.  Not so, as discussed in the article on Creative Disruption by Waldeck and Hopkins-Callahan (see below).   Small businesses are equally capable.

Consider the case of the owner of a small pool company who offered pool and water quality services for municipal, commercial and residential customers.   He charged per service call.  He also sold heaters, pumps, and other related pool care equipment as well.   In the case of their municipal customers, water quality monitoring was a big deal, but the systems to provide it were more expensive than most commercial and residential consumers were willing to pay.  Smaller pool owners wanted good water quality, but it had to be reasonably priced.  When the pool company owner attended a trade show, he saw some moderately priced new technology.   So he purchased a few systems himself, and offered the monitoring service to his smaller clients with a modest monthly monitoring fee.

In a sense, he saw the opportunity to exploit the new technology by changing his business model, getting into the equipment leasing business.  This was an innovative solution (I think) that was enabled by a new technology, and required flexibility on his part to change.

This is not unlike the Bodymetrics story – In their case the enabling technology was the Microsoft Kinect technology, which opened the door to a low-priced in-home solution rather than the expensive walk-in pods they had sold to Selfridges and Bloomingdales.

In both cases (pool and body-mapping) there was a common thread – the understanding of consumer desires, needs, and preferences.   They also were open to the possibility of changing their service offering and delivery method.

Too often we turn our attention internally, to our own R&D departments where our own very smart people think they know best what our products should look like.  Or, we turn to our marketing departments to the word out better.   Looking outside is much more likely to produce a sustainable competitive advantage, products that WOW users, and breakthrough innovations.  

Other Resources

How Bodymetrics and Razorfish are out to Change Retail, by Shareen Pathak

Creative Disruption: Innovation Lessons From Small Business, by Andrew Waldeck and Renee Hopkins Callahan 

Mass customization is trending so hard right now, by treehouselogic

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Converting Empathetic Observations Into Solutions

IPODSIn my last article, Driving Innovative Strategy through Empathetic Observation, I introduced the Empathy Map as a technique to aid your team in conducting insight generating field immersion research.  It is intended to supplement the hard research you collect as a part of any planning process, and should promote a deeper understanding of your industry, business product, service or customer.

The goal of conducting Empathetic Observations is to enable you to go deeper into the motivations that drive customer behavior.  This helps you to ask better questions to identify the more important problems to solve.  This is the path to achieving breakthrough ideas.

Imagine Apple, a strictly computer company in 2000.  How did they transition from making Mac and Apple computers to the revolutionary iPOD?    At that time we mostly listened to our music on CD’s.   A number of companies–including Creative Labs, and Sony-had been selling MP3 players for a few years but none of them had been big hits.   So, in this case, Apple didn’t invent the concept, but it was about to revolutionize it, by understanding consumer attitudes and desires better than all the competitors at that time.

The Apple Team was somehow able to sense the possibility of the congruence of computers, the internet, and a lightweight (MP3-like) portable and personal device that could really change the game.  They did their own assessment of the market and consumer needs.   They recognized that the slow adoption of MP3 devices was partly due to price, partly due to its features, and partly due to the lack of an enabling infrastructure.

The 1999 Creative Labs Nomad had 32 MB of memory.  That’s enough for about 1 or 2 CDs and cost US$429.   In 2000, the digital music market was still pretty young and people were being pursued in court over the violation of copyright laws when they downloaded or copied “illegal” music.   There was no organized “store” from which you could download music.  Using MP3’s was cumbersome and risky. Yet Jobs and his team saw the possibility of delivering mass customized music on demand – listeners could hear what they wanted, anywhere, and at any time.

Apple spoke with consumers and thought about the problem holistically.   Their solution:

1)      Increased memory – the first iPOD could store about 1,000 songs

2)      Simpler operator interface  –  not buttons or hard to read dials, but a circular touch-sensitive element you could direct with the light touch of a finger

3)      Lower cost  –  the first iPOD cost $250 – about half of the Creative Labs version

4)      A convenient and legal platform for easily transferring music content to the device –  Apple’s APP store was created to offer this and it ultimately morphed into iTunes

5)      Easy integration to your PC  –  by downloading iTunes on your PC, you had now one simple way to organize, categorize and manage  your music collection, create customized playlists and to easily plug-in and download to your iPod

So now a holistic solution was present, and the iPOD took off, selling a quarter billion units in 7 or 8 years, leaving the competition in the dust.  It totally transformed how we all think about media.  WE are in control.  It led to the creation of “podcasting”, and is behind the trend of streaming video, TV programs, and books.

My hypothesis is that Apple’s competitors chose to see themselves as device makers – good at mass production.  They expected the retail sector to suck their products out the end of their supply chain as they had in the past.  The Apple team (under Steve Job’s direction) came to understand it needed to integrate all the above elements to satisfy consumers.

Using Your Empathy Map

The Empathy Maps your teams create are what lead to these insights – to more problems to solve that can bring about revolutionary change.  The “problem” for the tech industry was NOT how to make a better MP3 player.   Above I listed five major problems that ALL needed to be solved, and integrated together (price, memory, user interface, access to content, and integration.)   All five needed solutions for the revolution to take place.   While I’m not sure, it is plausible that the engineers at Creative Labs looked at the problem one dimensionally, like we need to lower cost, or we need bigger memory.  (Check out the link below suggesting that by as late as 2007, Creative’s designers still didn’t get the whole picture.)

So how do you go from the empathy maps to these innovative solutions?  Here are the steps.

1)      Have your teams share with the whole group their empathy maps and their main conclusions – 3-4 bullet points from each section of the Empathy Map

2)      Invite the assembled group to begin defining as many “problems” as possible by reading each of the bullet points and allowing your mind to run free.  Remember the Linus Pauling quote when he was asked how do you come up with a good idea?   “It helps”, he replied, “to begin with a lot of them!”    Write down these problems in the form of a “how might we” statement, such as “How Might We: make it easier for customers to transfer music to their device? Write each of these How Might We statements down on individual post it notes, and transfer them to a large board or wall.  Get as many ideas down as possible.

3)      Then group the ideas according to which ones seem to be related and put a heading on each grouping.   I am imagining in the iPOD case at least five main categories as outlined above:  price, memory, user interface, access to content, and integration.    Can you picture it?   5 labels with multiple post it notes grouped nearby.

4)      Assign teams to work within each problem area to generate ideas to solve these problems.

Some of you might argue that a process such as I am advocating may be too time consuming and requires too many resources pulled away from their day jobs.   If that is your impression, I would ask only “what is the cost of failing to do the kind of thorough analysis that leads to the holistic solution?”   Apple’s market share in the iPOD business was over 75% by 2007.   It enjoyed a zero share in 2000.  Those share points came from someone.

Other Resources:

How Apple Transformed Music and Our Lives, by Sam Costello,

Creative Labs NOMAD MuVo² 4 GB MP3 Player–A Failed Attempt to Rival the IPod Mini, from Yahoo Tech

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Driving Innovative Strategy through Empathetic Observation

ObservingDeveloping great strategy that produces a sustainable competitive advantage comes from one of two methods.  One – you can study your competitors closely, try to figure out what their game plan is, and then decide how to beat them. Or, two – you can understand your customers better than anyone else; looking for insights about unmet needs and then satisfy them more fully than anyone else.

When we discuss the second approach the obvious question is “how do we come to understand our customers?”   For those of us who were students of engineering, the sciences, and possibly business, the first idea seems to be to collect data.  Yes, we love data.   We think about doing surveys that produce data which we can analyze, parse, cross reference, and review – with statistical precision.

Data Doesn’t Always Do It.

I am an engineer by training and I love numbers more than most but often times, the data does not yield insights that enable breakthrough innovation.  Surveys themselves are helpful only when you are insightful enough to ask the right questions.   In addition, how each is worded can also impact the responses. The ability to craft meaningful surveys when you yourself do not have a deep understanding of the consumer behavior of interest is rare.

Numerical data is one-dimensional and sterile.   It can reveal information about preferences, but without insight about what consumer motivations lie beneath.  It is often the subtext that triggers insights that produce game-changing new product ideas.

A third problem with data is that it comes from looking backwards in time.   While data on what has been happening can be interesting, there is no guarantee that the future can be divined by merely extrapolating past trends.  In a dynamic world, the past is not always a good predictor of what’s next.

A fourth problem is that data does not reveal root cause.   You could study various data sets and find a positive correlation between housing starts and bicycle sales, for example.   The fact that these two sets of data move together does not mean that one causes the other.  Understanding causality is pretty important.

Focus Groups Don’t Always Do It.

Many of the scientific and engineering people I know are cynical about wasting time to ask customers what they would like.   “They don’t really know themselves”, an R&D executive once told me.    This is true.   If you asked people 15 years ago how they would like to access and share information, it is unlikely they would describe a smart phone as it exists today. Their ability to describe new products and services is related to their life experiences, knowledge of what is possible, and their ability to imagine the unknown.  Now, if you showed them a prototype, they could probably give you some useful feedback on likes and dislikes, but if your goal is breakthrough innovation, this avenue does not seem productive either.

Don’t get me wrong, I am all for data, and data collection and review should be a PART of your research strategy.  But we need more.

The Art of Empathetic Observation.

The idea of observing consumers (up close) as they shop for, buy, and use your product or service can yield new understanding that can complete the picture data alone cannot paint.   Observations can yield information that cannot be obtained by other means.   When the makers of Cheerios observed moms they saw that many were using the cereal in unintended ways – packed in baggies and doled out one at a time when an infant needed a snack or distraction.

A maker of a leading cooking spray found some consumers using their product to coat the underside of their lawnmowers to reduce the buildup of wet grass (another completely new market for them).

Sometimes we can learn things in more empathetic ways.  We can listen to the tone of voice, look at body language and  notice facial expressions that allow us to “read between the lines” when speaking with customers.  In this manner we can often infer subtle things about their motivations and buying behaviors.

As described in my recent article Innovating a Mature Product – the Sealy Case, these people saw things by talking with and observing people shopping for mattresses that surprised them.  How the product looked and felt in the showroom really mattered (which was counterintuitive to them because their product was neither seen nor felt when in use).   They saw that there was a certain category of buyers for whom a mattress was a major investment in their health, productivity, and well-being.  They recognized that the mattress was, in a sense, a reflection of their personality. So the Sealy people concluded they needed to give their product a suitable personality to match.  This, they did, actually raising product costs by 25% and the selling price by 40% resulting in two consecutive quarters of record sales!

The graphic below, called an Empathy Map, is a tool you can use in your own field research efforts.

Empathy MapStart by designing your field immersion learning experience.  Think about whether to do an interview, observation, field trip, etc. and create a field interview/observation guide.    (You can contact the writer for examples).  Select your research team (eclectic and diverse is best).   Send them out into the field and tell them that the end product of their effort is the creation of an empathy map (using the template above.)

It has several sections – as outlined below.

1. See

What issues and problems surround them? What are market and environmental factors that seem to be most influential?

2. Think and Feel

What are their guiding thoughts and beliefs?  (Things they never overtly expressed, but you inferred using your empathetic observation skills)  Whose opinions might be influencing them, too? What emotions might have the greatest impact? View Plutchik’s Wheel of Emotions.

3. Say and Do

Who do they say when they are in public? What are their attitudes and actions?  What are they saying to others?

4. Hear

What are they hearing from other people? The most prevalent thoughts and opinions surrounding them by friends, co-workers, family, and the communications channels (like social media, broadcast, etc.) that are they plugged into?  (The things they hear that are most likely influencing what they are thinking)

5. Pain

What are their frustrations, dislikes or concerns?  What compels them to action, or what stops them from taking action?  What problems do they have that you might help solve?

6. Gain (Wants and Needs)

What are their aspirations and motivations? What benefits do they gain if you can better serve their needs and solve their problems?) What do they really want to achieve?

When this field work is completed, then your researchers can bring these Empathy Maps back stimulate discussion and ideation.    I will offer more about this topic in future articles.  In the meantime, try this tool (or play the Innovation Game referenced below).   See what you might learn.

Other Resources:

Spark Innovation Through Empathic Design, by Dorothy Leonard and Jeffrey F. Rayport, Harvard Business Review

Challenges of Doing Empathic Design: Experiences from Industry, by Carolien E. Postma, Elly Zwartkruis-Pelgrim, Elke Daemen, and Jia Du, International Journal of Design. (Note particularly the “Baby Care Project” case example)

Empathy Map – Goal: Understand What Your Stakeholders Want from Your Business, from Innovation Games


Using Empathy Maps, by Bryann Alexandros, from



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Building Innovative Project Teams: Question of Selection or Process?

Problem Solving LoopI was asked recently if I would consider delivering a speech at an upcoming Project Management Conference.

The question I was asked to consider is this (from an email communication), “The main challenge before organizations is identifying innovative members to serve on project teams. When the project manager builds a human resources plan, they need to establish a framework enabling team members to be flexible in their use of resources yet focused on the outcome to be achieved.”

To me, this problem statement suggests the problem is about how to identify certain categories of “innovative members” to be recruited onto a team.  The logic flows that if we recruit selected innovative people, they will likely come up with more innovative solutions.   Seems reasonable, doesn’t it?

I’m not so sure. Team member selection is important.  In my view, if your goal is an innovative outcome you need a diverse and eclectic team across as many dimensions as possible.

  • We want people with the right technical skills and knowledge based on the problem we are solving.  This is of course, true, but too often, it is the MAIN criteria. While having technical “experts” can be helpful, it is often an impediment to breakthrough thinking. Experts are often self-limiting because their deep knowledge leads them to conventional solutions based on their experiences, when innovative solutions often are found on the fringes.

Experts are often closed-minded to new perspectives (which often lead to new insights and new approaches).  Let’s assume you are leading a product design project team for a company that makes DVR’s.   One might use a customer interaction to expose these technical experts to ask users about things like how much memory it should have, what buttons should be on the front, what the user interface should look like, and so forth.   Engineers will ask questions about the kinds of things they know how to fix.   It stands to reason.

But what if you asked users WHY they have a DVR?  Is it because they want to record programs, or because they want “a little more control over their already too hectic lives”?  This latter insight might lead us to consider what OTHER things in their lives they might want more control over that our firm might have the ability to provide.   This is a very different thought path than in the preceding paragraph.  This one might lead to the creation of a new electronic device that is not even a DVR.  In the previous case all we will ever end up with is a better DVR.

  • People who are not experts often bring the freshest insights.   When a firm like IDEO creates a project team, they routinely have engineers, scientists and computer programmers together with anthropologists, musicians, artists, and psychologists.   They build teams that bring both left and right brain power to bear.  Sometimes the person with the least “expertise” can bring the insight that really changes the direction of the team.  They are not encumbered with the knowledge that the engineers and scientists have, and are better divergent thinkers.  So at IDEO, they want people who are diverse not only technically, but by age, gender, race, job function, and so forth.  This brings a much deeper level of life experience to bear on the problem.

This approach works, because the PROCESS used by firms like IDEO is what produces the success. It can be learned, and with effective facilitation, most people can make a very positive contribution.   This process, however, requires certain set of team member skills.

–       Listening empathetically to the voice of the user (customer)

–       Building off the ideas of others

–       Never criticizing someone’s else’s contribution (take it and improve upon it) (see Pixar’s Plussing: creating a culture of dissent, by Len Brzozowski)

–       Suspending belief about your assumptions (at least for a time).

–       Being bold in your ideas

–       Speaking openly and honestly

This also requires project leaders to assume a very different role, that of unleashing the creative energies of the eclectic team, rather than trying to manage or control them.   They can do this by encouraging people to do the things listed above.   Underlying it all is a belief that the collective creativity of an engaged team will outperform the effort of the brilliant “lone wolf” every time.

Team Diversity by Problem Solving Skill Set

CPS Process 2We are all different in how we think and approach problems (shown on the graphic at the right).  Some of us are by nature love to gain knowledge by doing, while for others, it is more of an intellectual process – they are more the thinkers.  Some of us are brilliant creators of ideas (divergent thinkers) while others of us are better at listing the 15 reasons why an idea won’t work (convergent thinkers).

In the graphic at the left, the Creative Problem Solving Framework and Problem Solving Skills grid are overlaid upon each other.   It reminds us that we need people on our teams who are skillful in all four quadrants of the process.   The action oriented among us may be frustrated during the problem formulation phase of Creative Problem Solving while the big picture thinkers may be challenged when it comes time of execution planning.  The main point is that effective teams need both sets of skills.

You Needn’t Screen for Innovation 

So, select your teams based on knowledge, yes, but tempered with the right diversity of views and experiences.  Trust the process and facilitation to produce the innovation.  I have never seen a creative problem solving team that wasn’t collectively capable of developing powerful “game changing” ideas.  With a motivated diverse team, effective facilitation, a viable process template, an environment where people feel free to reveal their ideas, and with an environment where management is willing to tolerate a prudent level of risk taking, you may surprise yourself with how innovative you can really be.

Other Resources:

How to Design Breakthrough Innovations, interview with David Kelly, 60 minutes

Successful Strategies for Teams: Team Member Handbook, by Dr. Frances A. Kennedy, and Dr. Linda  B. Nilson, Ph.D., Clemson University

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Three-Box System: Balancing Break-through Innovation with the Short-term

3 boxes

One of my favorite strategic innovation thinkers is Professor Vijay Govindarajan, from Dartmouth’s Tuck School.  He proposes an interesting idea that helps bring the idea of innovation squarely into the space of strategic planning.

One of the hardest things for executives to balance is the dichotomy between short and long-term thinking.  We all WANT to be strategic, don’t we?  We all WANT our organizations to be capable of break-through innovation, don’t we?  But we must also meet the financial metrics for this quarter or month.   Both are important.  If we are too far forward-thinking and fall out of covenant with our lenders, this can be a serious problem.   But living our entire lives dealing with quarterly financial goals and tactical matters leads to eventual problems also.  So we need to strike a reasonable balance between the short and long-term view.  My personal sense is that for most of us, our bias is too far in favor of the short-term – since these problems are likely to be more immediate.

This tension between short and long-term is perhaps the biggest impediment to strategy execution I can think of.    We have no problem thinking “big” thoughts when we engage in strategic planning.  But when the plan is created, it is hard to pull ourselves away from the pressures of meeting daily performance goals.

Senior Leader Mindset

Senior leaders need to fight this tendency, and it helps if they develop a mindset that accepts that:

  1. The world is rapidly changing.   Technology, demographics, social attitudes, economic trends and so forth are in a continual state of flux.
  2. To think you can simply keep reengineering your business around what you do today is a dangerous mistake that can lead to disaster.   Every business needs the ability to leap to the next wave at the right time.

When we think about some of the greatest innovation stories of the recent past,   Dell Computer,, Netflix, Zappos, etc. we marvel at how these people managed to imagine game-changing ways of creating new business value.  What interests me is the question “why did it take outsiders to develop these innovations?  Why didn’t IBM come up with Dell?  Why didn’t Sears or K-Mart develop Amazon?  Why didn’t Blockbuster create Netflix?  It is interesting that we are willing to face bankruptcy, or exit a business rather than develop new business models that are different from our primary way of operating.

Govindarajan invites us to consider that our strategic planning process should explicitly include planning around three very different sets of initiatives.   He calls his concept the Three Box System.

Here is the exercise he suggests you try when you sit down with your team to consider the next round of strategic planning.   Make a list on post-it notes of all of the major initiatives your organization is pursuing and committing major resources of money and people.  On each post-it, also write down the approximate level of resource allocation each initiative carries.   Now on a board, draw three large boxes, and place each post-it into the proper one.

The boxes should be labeled thusly:

1)      Managing the Present – driving improvement in your current operations – lowering cost, increasing quality, improving service, etc.

2)      Selectively Pruning Away the Past – making room for the future.  This is about strategically identifying things you should be planning to “kill” – like underperforming businesses, products, or segments that are consuming resources without producing desired returns.  Strategically, means we are looking at the changing environment and recognizing when the key trends are not aligning in a positive way.

3)      Creating the Future – investing in new markets, products, services, or businesses that are taking advantage of the key trend drivers in your world.  Again, this is a strategic action considering the key industry drivers and a deeper understanding of unmet consumer needs.

After you have completed the exercise, the hard part is to have a discussion about whether your resource allocation is reasonable.   My strong sense is that most of us have far too much in the first box and almost nothing in the second.

I asked earlier why Blockbuster or perhaps Barnes and Noble did not invent Amazon or Netflix.   My belief is that most of us cannot imagine creating something that would cannibalize an existing piece of business.   This may be because of ego (not wanting to admit we are not succeeding),  fear of incurring losses in a current business segment before the new one finally takes off, or possibly because we didn’t want to face the step of laying off employees.  Whatever the reason, the resulting outcome is to allow our under-performing units to die a slow and painful death – consuming even more resources on the way down.   In the end we still kill them, but we could have done so much earlier and redeployed valuable resources in more productive ways.

Deciding on the right resource allocation for your business is cannot be scientifically determined.  In general the faster and more dynamic the change environment is in your industry, the more initiatives you want in box number 3.

In my company, Robotron Corporation, box 3 was a big arena.  One of our strategic metrics was the amount of sales we had from products or services that didn’t exist three years earlier.  We tried to be at 20% or higher.  To achieve this, we spent over 7% of our sales revenue on new product development.   If anything, we may have been too biased in this area – sometimes finding ourselves on what I call “the bleeding edge of technology”.   (Robotron’s story is profiled in the book The Next Level, Essential Strategies for Achieving Breakthrough Growth, by Jim Wood.)

The main point here is that you should be thinking about making moves in all three boxes.  Strategy requires that we be deliberate in the choices we make about what products or services we will offer, to whom we will offer them, and how we will strive to achieve a sustainable competitive advantage.   As executives this means we have to bet our precious and limited chips carefully on the initiatives that can yield the greatest benefit.

Watch this 7 minute video featuring Vijay discussing the need to create new executive mindsets.

Other Resources

Transforming your Organization with the Three Box Approach, by Vijay Govindarajan and Brian Goldner

The CEO’s Role in Business Model Reinvention, by Vijay Govindarajan and Chris Trimble


Filed under Innovation, Strategy


spitfireNecessity is the mother of all invention – or so they say.   I can remember being in Castle Bromwich (outside of Birmingham, England) visiting Jaguar Motors.  The site that Jaguar sits on today was once the location of a factory that was converted from building cars to producing high performance Spitfire fighters when Britain declared war on Germany at the outset of World War II.   The Spitfire was the most widely produced and arguably most important single-seat fighter built during that war and was the backbone of the RAF during the dark days of the Battle of Britain in 1940-41.

But in 1938 that factory was owned by the Morris Motorcar Company. It wasn’t until late in that year that the British Government ordered the first 1,000 Spitfires.  That plant had to be disassembled and completely redesigned from top to bottom in order to accommodate the Spitfires which were still being designed.    By the time war was declared on September 3, 1939, the factory had 2,815 employees and was producing its first aircraft.   By early in 1943, employment at Castle Bromwich swelled to over 15,000 people working 24/7 to produce not only the crucial fighter, but the legendary Lancaster bomber of “dam buster” fame.

Having spent most of my professional career in the auto industry, this is a staggering accomplishment to me.  In just 12 months – to disassemble, re-design, retool and rebuild a facility like that is remarkable when you consider that  today, it takes 24-30 months to launch a new car line even with all of the technological advancements, software tools, and productivity aids the auto industry developed over the years.   Virtually none of that was available in 1939.  But these people improvised, cut corners, mapped things out on napkins, and used lots of common sense and hard work to pull off this amazing feat.  What drove them was the fear of an impending war, intense time pressure and the knowledge that failure was not an option.

The lesson here is that when there are constraints, pressures and limited resources we are capable of improvising and innovating in ways that are not common under most other ”normal” circumstances.

A new book Jugaad Innovation, by Navi Radjou, Jaideep Prabhu, & Simone Ahuja suggests ways you can challenge your R&D team.   Jugaad, comes from a Hindi word meaning “an improvised solution born from ingenuity”.  At the core is the idea of frugality.

The authors argue that many Western companies, after the Second World War, were fixated on the ideas behind mass production and economies of scale which were paramount during the difficult war years when so many nations were fighting for survival.  The response to this was to develop complex, rigid, bureaucratic and “siloed” R&D structures and processes.   While these may support a mass production system, they also create an inflexible and long development cycle that is less useful in a complex and rapidly changing world.   The authors further suggest we need to think more like those innovators in the British midlands – more entrepreneurial, frugal, flexible, practical, and common-sensical.

Want another example of frugal, practical innovation?   Consider Mansukh Prajapati, a potter by trade who had a working knowledge of clay.

He tried to solve the problem of creating a refrigerator in a part of India that had no electricity, no manufacturing, no technology infrastructure and no nearby research university.

MiticoolWhat he invented was a terra-cotta box with an upper chamber which was filled with water.  As the water seeps through to the lower chamber a cooling effect is created by evaporation. The result is a refrigeration product that is completely green, biodegradable, consumes zero energy, and produces no waste during its entire lifetime.  True it won’t keep your popsicles frozen, but it is an ingenious and life changing innovation for Mansukh’s region and for a large part of the developing world.

He was driven by constraints (no electricity, no money, no infrastructure) to solve an important problem in a new way.  This is a key innovation point: you can drive creativity by forcing people to look at conventional problems in different ways.

So what are the key principles behind Jugaad Innovation?

  •  Seek opportunity in adversity.  Think of adversity as your friend.  As in the Spitfire example, it can provide a strong motivation and make your team think out of the box – because they must. In my business, we once completely redesigned a major product line to be 30% less costly in three days when faced with the prospect of losing a major contract.  We turned our anger and frustration into the creative energy we needed to develop a new solution that for us was not possible without the existence of the crises.
  •  Do more with less.  Thinking minimally is not natural in many Western societies where abundance has been a normal part of the culture.  We need to break the paradigm connected to this abundance and get people to design solutions that are right for a situation, rather than intended to show off our technical expertise.   (One analysis by Microsoft suggests that 90% of the features they build into their products are seldom or never used.   So why can’t there be a $50 version of Microsoft OfficeTM that would be more than fine for the vast majority of us?)
  •  Think and act flexibly. In a dynamic and unpredictable world, flexibility and speed are vitally important.  Google has designed its innovation model around small, flexible and empowered teams who are free to react to the new situations they observe and encounter.  According to Google’s Eric Schmidt:  “we don’t have a 2 year plan [for much of our innovation], we have a ‘Next Day’ plan.”
  •  Keep it simple. Simple almost always leads to faster and cheaper. When a company like GM launches a new car line, maybe 70-80% of the parts are completely new. Each must be redesigned, validated, integrated, and tested.  What if only 20-30% of the parts were new?  Wouldn’t shortening the new car introduction cycle make them a more nimble, more cost-effective producer?   That is the direction they are now heading – too bad it took going bankrupt for them to consider this strategy.
  •  Include the margin.  Our Western mass production mind-set causes us to design products we think will appeal to the largest group of consumers.   But there are always segments on the fringes who perhaps can’t afford the price or don’t need the most common features.   Sometimes thinking about these fringe markets can be helpful.  Procter and Gamble is a company that is rediscovering this.  As they have gone global they came to see that many of their products were just too expensive for the developing world.   A colleague of mine worked in P&G’s Baby Care group (which makes Pampers).  He told me how Procter was learning how to adapt their product designs and manufacturing processes to meet the much lower price expectations of many foreign markets.  Almost as an afterthought they came to realize that there were a growing number of people in their home market (the US) who were also facing economic issues.  So product innovations developed for overseas are now being brought to serve consumers who were not previously on their radar.
  •  Follow your heart.Innovation is as much about instinct as it is data.   We need to learn to trust out gut reactions more.  We have all had the epiphany that “I knew I should have done that”.  Harnessing our intuition is a powerful skill that we need to master.  In the innovation business, we can’t know everything about what will or will not work – sometimes you just have to follow your instincts and go from there.

Try your own Jugaad Innovation Challenge!

So put these principles to the test in your own organization.   First, pick some “wicked problem” of your own choosing.  Then invite your employees to create Jugaad teams.   Give them some constraints (based on time, or money, or both), and invite them to develop the best solution they can, in competition with each other.  Tell them they are not bound by any of the rules that normally govern your new program or product development process.  Celebrate the best solutions – and the creative efforts put forward by ALL those who participated.  Learn from the experience.  Implement the best ideas. You just might surprise yourself.

Other Resources:

Spitfires To Jaguars At Castle Bromwich

Jugaad Innovation: Think Frugal, Be Flexible, Generate Breakthrough Growth, excerpt from the book.

Jugaad: A Frugal, Flexible Approach to Innovation, from Knowledge@Wharton

Jugaad innovation, Q&A with Authors, from the Jugaad Innovation website.

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Filed under Innovation