Hooray for Failure – Episode 6 – Jake Johnson

HFF_EpisodeIn this episode of Hooray for Failure we chat with Seattle-based, Jake Johnson, the Director of Brand Experience at Phinney Bischoff who wrote an amazing blog post at Medium about his son’s response to failure. We explore fear of failure, the failure associated with learning as a child, and the way in which society at large demonizes failure. It was a true pleasure to spend time with him (twice!! thanks to the less-than wonderful wonders of modern technology). We also share that paragon of entrepreneurial spirit, Richard Branson’s perspective on failure, too.

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What the US jobs picture says about the need for innovation here—and abroad

Periodically, we revisit the aftereffects of the “Great Unpleasantness” and how they are playing out in the global economy. One of the challenges in drawing conclusions based on macro-economic data is that it hides profound local consequences in the shifting of percentage points. In most first-world nations, the current game is watching the unemployment rate. A tick up a few tenths of a percentage point, and the hand-wringing and gnashing of teeth commences. A few ticks down, and a corresponding sigh of relief—if not mild euphoria—in the media is exhibited. Unfortunately, the focus on this sole metric is of little value, as it provides little insight into deeper fundamental challenges at play.

The recent unrest in Egypt resulting in the reluctant relinquishing of power by the former-President-for-Life Muhammad Hosni Sayyid Mubarak is in large part due to rising unemployment and economic disenfranchisement among the educated youth. Strangely, the reported Egyptian unemployment rate of 9.4 percent was a near-perfect match for the USA’s at this time, yet there is no protest marching in Washington, D.C., or any other US city for that matter.

A possible reason for that difference is that in the US, there still exists a hope that job growth will come, that the current economic downturn will end, and that people still retain the freedom to reinvent themselves in order to better their present circumstances. This positivity may be the result of the wide range of people affected by unemployment stretching across demographics and therefore not finding commonality among local peers, or the usual buoyant “can-do” US attitude. The current long-term economic outlook would tend to contradict positivity.

It’s a recession when your neighbor loses his job; it’s a depression when you lose yours.
Harry S. Truman

This is partly due to the depressing news presented to us by those we know and love struggling to come to terms with long-term unemployment, especially among the approximately 7 million people who have joined the 99 Club in the USA: people who have termed out of the available unemployment benefits. They represent slightly less than half of all unemployed…

Source: Bureau of Labor Statistics

The unemployment figures don’t take into account a larger swathe of people. The current figure under-represents the chronically underemployed (those working multiple part-time jobs) or those who are contingent (both seasonal workers and contract workers to whom unemployment benefits are unavailable). While the reported unemployment figure of 9.4 percent converts to 14.5 million people, the true picture is closer to 26 million, when the 2.6 million people marginally attached to the workforce are added along with the number of persons employed part-time for economic reasons (sometimes referred to as involuntary part-time workers), which was at 8.9 million as recently as December 2010.

The hole we must innovate our way out of is a lot deeper than most people recognize. Except, perhaps, for the people at the bottom of it looking up. Where does this leave us?

Dig and ship versus design and build
We must start with the reality that corporations cannot guarantee anyone a lifetime job any more than corporations have a guarantee of immortality.
John Snow

Jobs have gone. It’s not that they have been left unfilled, simply awaiting an economic turnaround. The jobs have gone, never to return. Whether replaced by technology-created efficiencies or exported to lower-cost economies, old mainline manufacturing jobs and data processing jobs have disappeared. The auto industry in the US is probably most emblematic of the shift in the US economy. Take the rapid bankruptcy or near-bankruptcy induced reduction in the number of vehicle models in production. This reduction had a cascade of effects up and down each auto manufacturer’s supply chain, from design and raw materials sourcing through to delivery, sales, and distribution—the number of people required to bring products to market has been significantly reduced. Those jobs are not coming back.

One reason is that local economic factors are tied to global economies now more than ever. Chrysler’s part ownership by Fiat means that cars that would have originally been designed in-house are now shared as platforms across the entire Fiat/Chrysler network. Similarly, General Motors has availed itself of the cover of bankruptcy to increase its investment in global partnerships, perhaps best represented by the success of GM in China. This is represented by the Chinese-designed Buick Lacrosse in the Chinese auto market, where it’s considered a direct competitor to BMW and Mercedes Benz as a luxury vehicle. It’s also seen in the manufacturing joint venture SAIC-GM-Wuling Automobile, which successfully sells minivans under the Wuling badge.

The offshore manufacturing of US brands is also symptomatic of a greater shift. Brands may reflect national origins, but their point of manufacture may be many thousands of miles from their “home.” The only jobs that seem to be staying put are those that cannot be moved: resource extraction (minerals, metals, and ores), domestic food production, and direct support services (such as trucking, healthcare, hospitality services). The US economy is sliding into a mode in which it provides raw materials to other resource-hungry nations, exporting low value-added ingredients for what will eventually become consumer goods that it will turn around and import. Either that or we’re becoming the Vanna Whites of the global economy.

It’s not the most intellectual job in the world, but I do have to know the letters.
Vanna White

Recapturing and fostering the spirit of design and build is a necessity if the massive unemployment is to be addressed in any full measure. Which is the whole point: this is a spirit not to be created, but reinvented and restored to the heart of the US economic engine.

Exporting hope
The best way to appreciate your job is to imagine yourself without one.
Oscar Wilde

One of the other factors influencing the US jobs situation is the very same “can-do” attitude that kept it ticking over for so long. The problem is that now, given the US’s wholesale exporting of its culture via consumer products, TV, film, and the Internet, that “can-do” attitude has been exported, too. Most recently this has been reflected in a book by Anand Giridharadas, India Calling. Based on his own search to discover his roots as a US-born child of both Northern and Southern Indian parents, Giridharadas recounts the way in which a brain drain of talent is gaining momentum, where Indians are returning to India as they see greater opportunities there than are available in the US. In essence, the US has begun exporting hope.

Previously, the United States was seen by the entrepreneurial as a promised land. For those with the ingenuity and the willingness to apply themselves, the sky was he limit. The best and the brightest came from around the world to attend its universities, and many stayed, helping to build some of the biggest and most high-performing companies in the world. In recent years, however, the desire of university graduates to stick around has diminished. Yale University professor and immigration researcher Vivek Wadhwa has discovered that many foreign-born workers in high-tech industries are returning home or contemplating such a return. The reasons for this are many, including better economic prospects or job opportunities. That the US, and other developed nations, have seen only recent anemic economic growth compared with developing nations like China or India is not lost on young entrepreneurs or individuals in the early stages of their careers.

The US is no longer seen as the only place to forge a future for oneself, because it has done such a phenomenal job of exporting its value system to the world. Not necessarily the values of consumerism and voyeurism, although they have been exported too, but primarily the values of hard work, self-reinvention, and yes, innovation. Which leads us to the US response.

Sputnik moments
Job security is gone. The driving force of a career must come from the individual.
Homa Bahrami

In his most recent State of the Union address, President Obama noted that this is the time for another “Sputnik Moment” for the US, a time during which there must be sharp realization that complacency and half measures simply will not have the desired effect:

…The only way to move to full employment is to lay a new foundation for long-term economic growth, and finally address the problems that America’s families have confronted for years. We cannot afford another so-called economic “expansion” like the one from last decade—what some call the “lost decade”—where jobs grew more slowly than during any prior expansion; where the income of the average American household declined while the cost of health care and tuition reached record highs; where prosperity was built on a housing bubble and financial speculation…

… You see, Washington has been telling us to wait for decades, even as the problems have grown worse. Meanwhile, China’s not waiting to revamp its economy. Germany’s not waiting. India’s not waiting. These nations aren’t standing still. These nations aren’t playing for second place. They’re putting more emphasis on math and science. They’re rebuilding their infrastructure. They are making serious investments in clean energy because they want those jobs.

The US economy, for so much of the last century the bulwark of the global economy, needs revitalization. In thousands of businesses large and small, the path to success lies in creating space for the millions of underemployed and unemployed, so that these disenfranchised can add their intellectual weight to the economic transformation that must take place. How can we grow, smartly, wisely, and in such a way that we don’t need to strip jobs out of our enterprise every time there is a hiccup in global trade? We must find a way to make innovation not an addition to our enterprises, but the engine at the heart of what makes us successful. We have done it before. Others have learnt from that success.

We must remember what we have forgotten and get busy.

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Co-creating innovation—a better participation experience

To further the appreciation of culture among all the people, to increase respect for the creative individual, to widen participation by all the processes and fulfillments of art—this is one of the fascinating challenges of these days.
John F. Kennedy

Innovation, certainly open innovation, is an invitation to participate in a shared experience of co-creation. It asks everyone involved to come to the table ready to fully engage and give of themselves to the best of their ability. This doesn’t happen of its own accord unless there are some basic elements in place to create an environment in which trust can be generated over time. One of the ways to create the conditions for trust is to orient the environment toward the participants, to make it as accessible and engaging as possible.

The process of creating an engaging environment may begin with relative simplicity, but as anyone who specializes in environmental psychology will tell you, it can become quite complex over time. This interdisciplinary field of psychology focuses on the interplay between humans and their surroundings. In the need for the acceleration of creating an innovation space that supports the formation of trusting working relationships, the primary focus is on one attribute in particular: prospection. As defined by Daniel Gilbert in his book Stumbling on Happiness, this is “the act of looking forward in time or considering the future.”

Anticipating is (almost) everything
Prospection is driven most explicitly by our ability to imagine—a critical ingredient in forming innovations—and an environment that invites this positive behavior is one in which innovation may not only take root, but thrive. Like its root word, prospecting, prospection is concerned with anticipation of some type of benefit. In the case of innovation, that benefit is, a novel solution to a compelling need that generates value.

To generate the kind of positive outcomes we seek in our organizations, this process of anticipation needs to be jointly experienced. As a driver of behavior, anticipation increases enthusiasm, often with a corresponding ability to delay gratification that can move like a contagion across a group. Factors that contribute to bias toward anticipation are making thinking visible—the actual in-process outputs of the innovation experience—as well as creating a way to stage the development of ideas over time. Seeing and feeling the results of ethnographic research in terms of videoed interviews, or the volume of Post-It notes concepts generated via brainstorming, or the material outputs from a prototyping exercise can all contribute to the physical reinforcement of a positive outcome.

This kind of anticipation, the focus on prospection, can be self-fulfilling. It generates a momentum that is difficult to create or sustain without the benefit of physical cues in the environment. With them, the pace of innovation may be accelerated.

How else might we better support broader participation in innovation?

Collaborative toolkits
Such happiness as life is capable of comes from the full participation of all our powers in the endeavor to wrest from each changing situation of experience its own full and unique meaning.
John Dewey

For some organizations, creating comfortable, relatively quiet locations where participants can always meet, with food and beverages available to share and materials to support creative output, yields positive outputs. Why? By establishing differentiated spaces for innovation activities, the behavior that occurred in those spaces is also differentiated. Some organizations pride themselves on the diversity of their physical spaces. Advertising agencies have been known to create unique, client-centric spaces, in which they will focus on the products and services of those clients. Product development consultancies also create divergent work environments as mental and emotional triggers to support the creativity desired for innovation. One such firm in Pittsburgh, Pennsylvania, Inventionland, has created a workspace filled with pirate ships, raceways, and tree houses. This may seem quite trite until you learn that Inventionland is the inspiration for 2,000 to 2,400 brand-new inventions each year licensed and secured by businesses.

The provision of work spaces that support innovation participation is not relegated to the physical world only. Consider the impact that online collaboration tools may have on people who are not geographically co-located. Most social networking sites have support capabilities for group or project organizers—SharePoint has long been used for this purpose, Google Aps like Google Docs is used to do this, too. Even tools like WebEx or Adobe Connect offer ways to use virtual whiteboards. Sometimes it may be as simple as a series of emails to support team members that can make all the difference in fostering participation. The key is to choose those structures and tools that will be most meaningful given the organization culture in place in your enterprise.

With the appropriate environmental conditions in place, fostering innovation participation becomes an easier prospect. Be clear about goals and the tools required to meet them. Be clear about the skills necessary to achieve your goals and the people who can provide them. Create a space to act as a crucible to bring them together and get out of the way. With the stage set, and managed, co-creating innovation will be something to look forward to and the opportunity to delight will present itself.

What environmental conditions and tools do you recommend for fostering innovation participation in your enterprise?

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Is it hot in here? A review of Stoking Your Innovation Bonfire by Braden Kelley

For those of you who don’t know Braden Kelley, he is one of several thought-leader, whirling dervishes in the innovation space. Braden is the founder and executive editor of the innovation hub, Blogging Innovation, and most recently is the author of Stoking Your Innovation Bonfire: A Roadmap to a Sustainable Culture of Ingenuity and Purpose. This readily accessible offering is focused on getting the fundamentals of innovation right. It directly addressed key obstacles that cripple innovation in organizations, regardless of their initial innovation successes.

It should be noted that I know Braden and admire his work in innovation. That said, I purchased the book myself (Kindle edition) and have every intention of offering a clear perspective. When I make recommendations I fully understand that my reputation is on the line, too. So, I am pleased to be able to offer a strong endorsement for this book. For anyone interested in innovation in their organization, the ideas presented matter.

One of my favorite features in this obviously well-researched effort is the devotion to case studies. Braden uses the case studies to both highlight best practices and shortcomings in innovation and the wide range makes his thinking relevant to people across all industries and levels in organizations. Interestingly, while many authors have positioned Apple’s journey as one of a paragon of innovation virtue, Braden takes the time to truly unpack and review Apple’s overnight innovation success. His attention to detail means that we begin to understand how hard innovation can be, even for the best, and what we can do to address the blockages to success head on.

Now, for those hoping to find a silver bullet for innovation success, this book is not for you. Stoking Your Innovation Bonfire is focused on providing the reader with practical, incremental steps that can be taken to build innovation effectiveness over time. There are no quick fixes. There are no simple solutions. On offer is solid advice, clearly presented. It is not ground breaking, but to perfectly clear, that’s not what is needed. People need to understand that for innovation to matter in an enterprise and to be sustained over time the basic tenets that Braden identifies and clearly explains need to be in place. Without them the opportunity to fail will present itself quite readily.

The book’s natural progression from vision and strategy through to organization psychology and innovating under crisis conditions makes this a useful guide to keep at hand as you continue on your innovation journey. Braden notes, and I wholeheartedly agree, that there are fundamentals without which you will not be successful. He clearly describes the challenges and offers sensible solutions for addressing them. His approach is to create the culture and systems and processes that will support innovation for the long-term.

Perhaps one of my favorite sections is titled “Saying No in the Right Way.” So many times I have seen the passion of innovators in organizations run aground on the negativity attendant with the strategic (and sometimes, not-so-strategic) decision-making surrounding which opportunities to pursue and which to abandon. Braden addresses the ego inherent in people sharing and evaluating their ideas in a public domain. He also notes that sometimes the smartest people in the room have the least capability to explain or develop their ideas in order to make their invention an innovation reality. The approach he recommends is to foster trust by understanding the skills that people bring to the table before you go down the innovation road as well as set clear expectations for the process of selection. All of which requires preparation.

Ultimately, the investments you make in creating clear communications around your idea evaluation policies and processes, and in maintaining their transparency, will be repaid tenfold. Innovation ideas will continue to flow only as long as there is trust and faith in the healthy operation of the process.

Which is the heart of the matter. If you want to innovate you cannot simply jump in and expect the best outcomes. You need to think and prepare. That does not mean you must prepare to perfection. But you do need to have the elements in place, the basic framework that will support your collaborative efforts, to keep your innovation efforts heading in the right direction. Like a bonfire, innovation burns best and brightest when it has a stable structure to which you can keep adding fuel. If your organization is struggling to get its innovation efforts off the ground, or if you feel it has lost its way, then you should take a look at Stoking Your Innovation Bonfire, it will help your business rebuild its hidden or lost innovation capabilities.

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Recognition as a force to foster innovation

Sometimes, the wide range of things that must be accomplished to improve an organization’s innovation culture can be overwhelming. The sheer range of available actions along with the anticipated complexity of their implementation can cause one to feel like a small woodland creature caught in the headlights of a large truck. Or, worse yet, may simply cause you to want to sit in a corner and quietly cry yourself to sleep. Sorry, was that out loud?

Nevertheless, there are some simple steps that, when repeated, can create an engine that will drive innovation practices across your enterprise.

Company cultures are like country cultures. Never try to change one. Try, instead, to work with what you’ve got.
Peter Drucker

Recognition is the key ingredient to get things moving.

Recognition is not the ability to identify something, although that helps. What we’ll focus on here is the systematic observation and public witnessing of the right kinds of behaviors in the organization. It means “catching people doing the right thing,” and believe me, as a practitioner, it is much more fun for the giver and receiver than any performance management system focused on finding fault and making corrections. The power of recognition is that it can be simple, readily applied, and the knock-on effects can have enduring positive impacts that may carry on repeatedly.

Measure for measure
Count what is countable, measure what is measurable. What is not measurable, make measurable.
Various attributions (the more common variant meme: “If you cannot measure it, you cannot manage it.”)

Measurement is an important factor in the recognition of innovation-supporting actions. The challenge with measurement is in selecting the appropriate measures of performance to assess the progress toward a desired set of outcomes. If we choose metrics less than wisely, we can find that our actual performance and our desired performance slowly drift apart. The same can be said of recognition. As an acknowledgment of performance against expectations, choosing where and how recognition should be applied must also be considered just as wisely as what we measure.

When we decide to recognize performance, we come up hard against the realities of measurement in our organization. We soon discover that we are actually required to manage what we cannot measure. Innovation is an especially difficult area in which to define absolute measures. When we attempt to do so, we realize that not everything that can be measured should be managed, and that not everything that must be managed can be measured. Innovation recognition requires us to focus on movement toward desired actions rather than any hard and fast outcomes. It may also mean some missteps as we become clearer about what we need to recognize in order to move our unique culture in the appropriate direction.

One of the greatest management principles is that the things that get recognized get done again. If you’re looking to create innovation momentum, look for the behaviors you want to recognize, and explicitly tell the organization what you’re looking for, whether it’s deeper customer observations, more ideation, or faster prototyping. Be clear and be repetitive. You get more of the behavior you recognize, but you certainly will not get what you merely hope for, wish for, or beg for. Better yet, when you do see the behavior you were looking for, don’t wait a moment–make the recognition immediate, visible, and shareable.

From a performance management perspective, the closer you can tie individual (or group) performance and action to it being recognized, the stronger the tie will be in the eyes of the receivers and any observers. Any time separating their performance and its recognition, means the opportunity to foster the needed behavior diminishes rapidly.

Remember, recognition systems are much more than just bonus plans and stock options. While it is certainly possible to include both of these incentives, they can also include awards and other rewards, such as promotions, reassignment, non-monetary bonuses (e.g., vacations), or a simple thank-you. Above all, make recognition a production.

Recognition is all about seeing
Sawubona – “I see you” (traditional isiZulu greeting)

In their most recent book, Switch, Chip and Dan Heath discuss how to create change when change is hard. Fostering an innovation-capable culture is hard work. One of the earliest concepts in their work is the notion of being able to “find the bright spot.” This concept is firmly tied to the work on appreciative inquiry of David Cooperrider, a professor at Case Western Reserve University. Finding the bright spot means looking diligently for and highlighting that which is going right. It means making the success, no matter how small-seeming, a visible and desirous outcome. They are “successful efforts worth emulating.”

Recognition is about identifying and promoting the desired innovation-focus behavior. The reason to focus on recognition rather than reward systems is because recognition elicits a psychological benefit, whereas reward indicates a financial or physical benefit. Although many elements of designing, managing, and sustaining reward and recognition systems are similar, it is useful to keep this difference in mind, especially for small business owners interested in motivating staffs while keeping costs low. Additionally, recognition is great for early stage and in-process outcomes essential for behavior change, while rewards are generally end-stage and conclusive-results focused.

Being prepared to recognize is key. Some simple guidelines include:
• Create goals and action plans for innovation-supporting behavior recognition,
• Maintain fairness, clarity, and consistency in recognition, and,
• Set guidelines so all leaders acknowledge equivalent and similar contributions.

In order to develop an effective recognition program, leaders must be sure to separate it from the company’s reward program. This ensures a focus on recognizing the efforts of organization members. Effective recognition should be sincere; applied consistently and fairly; noise-free (not combined with other reporting activities); timely and frequent (especially when fostering early behavior changes so that no one’s efforts are overlooked); flexible; appropriate; and specific (specific in terms of what it recognizes and specific in terms of how it recognizes the desired behavior). See people do the right thing, early and often.

It is important that every action that supports a company’s innovation goals be recognized, whether through informal feedback or formal company-wide recognition. All members should have the same opportunity to receive recognition for their work, too. Finally, a common understanding of the behaviors or actions to be recognized should be shared. One way you can ensure this is by visibly and explicitly describing what actions will be recognized, and then reinforcing this by communicating exactly what someone did to be recognized.

How are you recognizing your bright spots and capitalizing on them?

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Owning What’s Next: Building a culture of innovation accountability

It is not only what we do, but also what we do not do, for which we are accountable.

With the rising tide of concern regarding the overuse of the word innovation, there’s a tendency to write off the term as yet another business fad. As if the overuse of the term and its application as a general panacea to every business issue requires that right-thinking people should abandon it in favor of more measured, less over-exposed, terms. How wrong that would be?

What’s required is not an abandonment of innovation but a re-commitment.

In dismissing the term innovation, we would be abandoning an intellectual investment in language and discourse that has only recently begun to transform organizations on a large scale. Just because the term may be misapplied or misused does not mean that the act of innovation has become irrelevant. If we veer away from the ongoing innovation discourse and search for other terms to apply to the practice of systematic renewal, invention, and implementation, we risk becoming caught up in semantic brinksmanship. The degree of urgency could not be much greater.

Tom Kelley, founder and former CEO of the design firm IDEO, recently said in a meeting with the senior executives of a major global player in the fashion industry, “Companies not only have to innovate, that’s simply the price of admission to today’s markets, they need to out-innovate the competition.” His direction was that we must hold ourselves to account for innovation, just as we hold ourselves to account for any other business result.

It’s time to stop messing around with language and start focusing on outcomes. We must drive the conversation toward the value of innovation, which demands accountability for innovation as a practice in our enterprises—something for which everyone should be accountable.

Stop messing around with language and get busy
Avoidance – the creation of space into which commitments disappear.

When present circumstances suggest that just surviving the day is a form of victory, it’s easy to let the future take care of itself. Any seasoned business leader would tell you that if she does that, the future will not necessarily be kind and take care of her company. Most business leaders know that they should do something to face the rising challenges within their market, to uncover and fulfill the unmet needs of their customers, but with limits on resources and only so many hours in the day, they fall short of thinking about tomorrow.

The future is unavoidable, and talking about it won’t make it any more manageable. Unless leaders choose to face it head on with the rest of their organizations, outcomes twill rarely be of their own choosing. We have to become unstuck.

One way we can help our organizations become more forward-looking is to face present circumstances by conducting a current state assessment. This could be as simple as a SWOT analysis or as complex as a total strategy and operations audit. A deeper understanding of where you are, the resources you have at hand, and the business environment you are experiencing will help you to plan for action. It is in acting that we can begin the process of discovering how to transform our organizations for the better.

One of innovation’s aims is to learn, as much as possible as fast as possible. In learning, we can define ever-improved solutions to our most complex challenges. Those challenges don’t only exist at the product or service level—they exist at the operational and strategic level of organizations. By that measure, the practice of innovation has just as much value across the entire enterprise. This recognition is imperative, and it’s to this that organizations must hold themselves to account.

Hold ourselves to account
Account – the measure of how well one meets the expectations to which we are committed.

The framework of accountability in most organizations is quite limited. Few organizations understand that accountability is a chain running across the entire organization, linking everyone together in a common purpose. Even fewer organizations actually practice this as standard operating procedure.

Being held to account for something requires, at minimum, two parties who come to agreement about expectations to be fulfilled and the actions to be completed that will fulfill that commitment. When well-practiced, it binds both in an agreement that can be monitored, managed, and measured. A fundamental ingredient in accountability is the trust between the people involved. Without it, accountabilities are fragile and often accompanied by disappointment.

For an organization seeking to grow, striving to match its strategic intent, accountability for action is critical to both immediate and long-term success. Without a culture that supports and sustains accountability, that understands the need for clear expectations and inviolable commitments, there can be only limited accomplishment of goals and objectives. That commitment starts at an individual level, but will grow across teams, groups, departments, and divisions until it becomes the air that an organization breathes.

We are accountable for our decisions in our personal life so why shouldn’t we be just as accountable in our work life.
Catherine Pulsifer

One of the greatest frustrations for a senior leader—someone keenly committed to their organization’s success—is establishing a clear strategy and defined goals for attaining that strategy, only to see their strategic intent die from ineffective action or complete inaction. They are left dumbfounded by the experience. The lesson must be that unless the necessary groundwork is laid within the culture of the organization that fosters trust, collaboration, and a willingness to hold each other to account, there can be no happy outcome.

Results matter
Ownership – commitment to the action necessary to (or exceed) a set of expectations.

To deliver results, especially results that require us to innovate and reach beyond what is presently possible, our organizations must commit to measuring outcomes. One of the hardest transitions for many organizations is to move from the planning phase into the implementation phase. A number of recent books have talked about the necessity for execution and for implementation. They are often prescriptive, and usually offer sage advice. The counsel they offer provides a means to an end.

But in the end, it’s the end that matters.

Organizations are busier today than they have been in years. Busy-ness is not a useful pursuit. The time for talk is over. To meet the challenges of a transformed business environment, talk should be minimized; we must hold each other to account for the innovation necessary to help our organizations thrive, and we must own the outcomes. Unless we own the production of measurable and meaningful outcomes, the act of being busy will only make us feel like we’re moving. If we do not own our future, what happens next might stop us in our tracks.

How are you holding yourself to account?

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Innochat Transcript – 19 August – Innovation Backwards?

Sorry for the delay in getting the most recent innochat transcript posted. The challenge associated with connecting while on the road was greater than anticipated. Needless to say I didn’t expect to be looking at Uluru (aka. Ayers Rock) in the middle of Australia as I type this, but here I am.

Thanks for your patience. Attached is the transcript from the “Innovation Backwards?” chat, which was incredibly well positioned thanks to the great framing post from Caroline Di Diego and excellent moderation by Renee Hopkins.

A favorite tweet from this week’s post? This insight from Jose Briones:
The biggest issue is that in most cases picking winners from the ideation process really means picking favorites.

#innochat – transcript August 19 2010

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A Better Yardstick / A Better Meter Rule – Measuring Innovation Performance

Just because you can measure it doesn’t mean you should
Any measurement must take into account the position of the observer. There is no such thing as measurement absolute, there is only measurement relative.
Jeneatte Winterson

One of the great challenges for those focused on improving their organization’s innovation culture is the desire, at the end of the day, to be able to point to something and say, “that’s better than it was before.” That desire, to measure our performance against an agreed upon set of measures, is not a bad thing. The way that need is acted out in the organization is where it comes undone. This is most problematic when the push is to measure in purely financial terms.

The drive to see some kind of return on innovation investment has a strong pull. In a time when every penny, cent, fen, or kopek is being counted with scrupulous accuracy, the notion of not counting the programmatic contribution of innovation in monetary terms seems ludicrous. Unfortunately, if you were going to spend money on a program that offered fast return on your investment, spending on changing your innovation culture would not be the wisest investment. Investing on your innovation culture is a long-term play, as they say. Yet, it should be a focus for investment and it should be measured.

The key initial measures to watch for when building an improved innovation culture are:

  • Faster idea generation
  • Faster prioritization and decision making
  • Sharper focus
  • Faster prototyping
  • Improved cross-organization communication
  • Improved parallel processing
  • Overall we are talking about a process that reduces cycle time.

    In fact, the Boston Consulting Group’s 2009 Annual Innovation Report highlighted the fact that cycle time, specifically “time to market,” was one of the most “chronically underutilized metrics” in their survey of companies. Which they also saw as being highly ironic given that many companies identified a lack of speed as their greatest weakness.

    I’ll know it when I see it
    Our scientific age demands that we provide definitions, measurements, and statistics in order to be taken seriously. Yet most of the important things in life cannot be precisely defined or measured. Can we define or measure love, beauty, friendship, or decency, for example?
    Dennis Prager

    Cycle time reduction is a great first measure because it can be applied across all aspects of the innovation processes at play in your organization. From decision-making, to selection of team members, applying the measure of cycle time reduction sharpens the way all innovation is approached. It has a distillation effect. In helping you to focus on speeding up the process of concentrating the right resources on the most beneficial projects, cycle time reduction also demands attention on quality, too.

    Poor quality actually results in a systemic drag later in your innovation process. That initial poor quality may also have a knock-on effect, causing an escalation of poor quality further down the line as corners are cut in order to meet the initial cycle time reduction. By managing all cycle times and aligning them with quality practices your organization becomes more robust and resilient. The outcome is not only better performance but faster performance which can be seen across the whole organization.

    I can count it but I can’t count on it
    The only man who behaved sensibly was my tailor; he took my measurement anew every time he saw me, while all the rest went on with their old measurements and expected them to fit me.
    George Bernard Shaw

    In a world of constraints, meting out investments may be a matter of short-term economic survival, but it will not build a foundation for long-term success. To create and improve and innovation culture – a culture that fosters economic expansion and delivers to the top and bottom lines – organizations need to invest in those processes and practices that change behavior. In the post, Working The Processes of Innovation – Learning to Love & Live Failure, we explored the power that comes from building a tolerance for appropriate failure. Recently this was reinforced in Megan McArdle’s piece in Time magazine, In Defense of Failure,

    It sounds like a dubious aspiration, but one of the more pressing priorities for America this decade is to preserve our cherished freedom to fail in this country…America allows its citizens room to fail — and if they don’t succeed, to try, try again. Somewhere between two-thirds and three-quarters of all Americans report that they have considered starting their own business, whereas in Europe that number is only 40%.

    Here McArdle talks about the power of this freedom:
    McArdle on America\'s Need to Support Failure

    How do we measure failure and the power of failure in moving us toward a better, brighter, more abundant future? It should be interesting to note that measuring innovation is also top of mind of one of the world’s most active philanthropists, Bill Gates. His concern is not that we aren’t measuring innovation failure, although he did popularize the concept of “fail forward fast” during his time leading Microsoft, his concern is that most people are failing to measure innovation at all.

    When all is said and done – have the right satisfaction measures improved?
    Without a measureless and perpetual uncertainty, the drama of human life would be destroyed.
    Winston Churchill

    Once again the Boston Consulting Group’s 2009 Annual Innovation Report offers another key insight into the dynamic tension that exists in measuring innovation performance in terms of outcomes. The top measure employed by companies seeking to assess their innovation performance was customer satisfaction but the second highest measure was overall revenue growth. The expense of increasing the former measure would seem to have a direct negative effect on the latter and yet there they are parked beside each other at the top of list of robust measures for innovation performance.

    The performance of any innovation truly is measured in the eyes of the customer, be they an internal customer or a market-based customer. Customer satisfaction is the end-of-the-line measure for all innovation. If an innovation cannot drive the performance of that measure then what purpose does it serve? One of the most powerful tools for revealing the impact of an innovation is the Net Promoter® Score (NPS). This concept was first widely made known through the work of Fred Reichheld in his book, The Ultimate Question.

    The NPS is both a loyalty metric and a discipline for using customer feedback to directly influence behavior within an organization. One company using NPS to measure its innovation effectiveness is Logitech, the computer peripheral manufacturer, which uses it as the final consumer acceptance testing measure. By using this score Logitech can tweak late-stage products to maximize their effectiveness on release to market. They test. They measure. They tweak. They hold or go to market. It should be noted that the best performing products, with the highest NPS, are also the products with the highest revenue on release.

    So, it would seem you can serve one goal with two measures, after all!

    There are two possible outcomes: if the result confirms the hypothesis, then you’ve made a measurement. If the result is contrary to the hypothesis, then you’ve made a discovery.
    Enrico Fermi

    What have you discovered as you attempt to measure your innovation?

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