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Business Innovation Factory – 7 #BIF7 – Live blogging Sept 21

September 21, 2011 By 1 Comment

See Day 1 here. A big thanks to John Werner at Citizen Schools for sharing some of his fantastic photos from BIF-7.

To start the day off I had a great conversation with seat mate and recovering journalist, Helen Walters from Doblin. We covered: Conferences. Curation. Presentation delivery bar being raised. And the Conference Industrial Complex. I love her manner of inquiry.

Saul Kaplan opened the day by reflecting on what the success of the BIF summit means. He noted, “People need to draw their own conclusions because the value is in what you learn as a participant.” Saul also reflected on the fact that innovators, even though they come with deep subject matter expertise, are in constant search for what they are missing. This mindset is something that informs how Roger Martin, Dean of the Rotman School of Business at the University of Toronto thinks about innovation and to whom Saul nodded.

 

 

 

 

 

 

 

Umair Haque, Director of the Havas Media Lab and author of The New Capitalist Manifesto: Building a Disruptively Better Business, lead the Day 2 presentations by delivering his session live from Pakistan. We talked yesterday about transforming education and healthcare. Haque is focused on transforming the mother of all systems, capitalism.

Haque opened with the fact that Pakistan has ground to a halt due to an outbreak of Denge Fever.

What the religious fundamentalists haven’t been able to achieve in two decades, the mosquitoes have accomplished in two months in Lahore. – Umair Haque

He stated that Pakistan is a functional economy against which he compared the aspirational economy of India. By way of framing his approach to capitalism, Haque quoted from Joseph Shcumpeter’s work, “Can Capitalism Survive?” Schumpeter’s assessment was that no, capitalism cannot survive because the range of needs of human beings is endless and that it will collapse under its own weight. Haque’s additional framing is to offer the concept of the opulent economy and its attendant ills: dumbification, inequity, social unrest, abject poverty. The quest for more, bigger, faster, cheaper, now is going to fade.

In the place of opulence, Haque offers up a model of capitalism based on fitter, smarter, tougher, closer, and wiser. The term he uses is eudaimonia which is founded in “human flourishing.” This transition will take years, if not a decade according to Haque. However the range of change required is transformational

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The artist, screenwriter, and author behind “The Polar Express” and many other books, Chris Van Allsburg came to the stage next. He shared a story about Annie Edson Taylor, the first woman to go over Niagara Falls in a barrel. [It should be mentioned I have a relative who self-selected from the gene pull by swimming the river that feeds these Falls, Captain Webb who was a British dare devil.] Van Allsburg’s book is called, “Queen of the Falls”

In sharing his journey to creating this book, Van Allsburg talked about the narrative choices he made in conjunction with the illustrative choices, such as superimposing a building into the Falls to illustrate their size. He also discussed how he fleshed out her life’s story and how he captured her journey to the moment she decided to go over the Falls in a barrel. She had no experience in barrel-making or dare-devilry and yet, like most innovators, she had a persistent belief in her own vision and the will to drive it to successful completion.

This presentation offered a glimpse into both the subject of Van Allsburg’s heroine as well as the author artist’s role in capturing her journey in a meaningful and accessible manner. To see and hear how he pulled together the elements of his book into a cohesive whole was intriguing. It was a wonderful and revealing view of the care required to construct meaning.

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Alexander Osterwalder was a pinch-hitter due to the schedule shift on Day 1 with Erin Mote being called away by Secretary of State, Hilary Clinton, to go to the West Bank. Alex is the lead author/editor of the book, “Business Model Generation”  which was essentially co-created with a large number of practitioners.

This book arose from Alex’s doctoral thesis which contained the word ontology, which Alex noted is the word that enables you to earn a Ph.D! The first time the book was able to be held by Alex was actually at BIF5 two years ago. And with book in hand Alex found that he struggled to define himself when asked by people – author?, entrepreneur?, public speaker?, academic? None of which seemed to fit. Instead he says he is,

I’m somebody who likes to *break* the rules and make stuff.

Alex provided some statistics to create context for the environment into which his book might be delivered. 1,000,000 books published in English in a year. 11,000 of those are business books. Cumulatively there are 250,000 business books competing for shelf-space. Business books sell 250 copies on average. A highly challenging environment in which to launch a new book.

He identified some of the challenges of business books which sounded like an offshoot of the Goldilocks tale: too heavy, too light, to wordy, to impractical. To break this paradigm Alex and the wider team looked at a very broad range of works for inspiration and sought to cerate a book that they would love to buy. The first step was to hire a designer and assemble a broader team to create and build the ecosystem around the development of the book. The end result is a highly visual book with white space and different ways of laying out the book to engage and attract to ensure the book had a high degree of utility.

The book became the co-created work of 470 people around the world. They also charged for participation and raised the price of the book time and time again from $24 to $81. The last chance payment was $250 in order to have your name in the book before publication. What was the reason for the attractiveness of the value proposition? Being first. Being a part of something bigger. An opportunity to learn from each other.

Instead of a marketing budget, the book project had a built in community of people who were proud advocates for the book in the marketplace. The backbone for bringing the book to light was the internet. There was a freemium offer of a third of the book. Then came the challenge of managing the logistics of dealing with shipping all over the way. The initial approach with a Dutch company was an abject failure and then they went back to Amazon for fulfillment. The initial success attracted a large publisher, Wiley.

The book is available around the world and it has been scheduled to be translated into 22 other languages. The ideas are available around the world and are tearing down the barriers to business everywhere.

This was a great example of building a community to launch a book to the heights of success.

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The Co-Founder of Futurlogic, Jon Cropper next came up to talk about seduction a distillation of 15 years of his life into 15 minutes. And he survived being tortured by P-Diddy running his company for a year. He shared nine elements that drive seduction:

Self awareness – know yourself

Environmental – the conditions and context of performance

Design – aesthetics matter (the fusion of a simple exterior with a complex interior – “simplexity”)

Understanding – listening and compassion

Communication – the power of great storytelling

Trust – in others and delivering on your promise

Inspiration – create an educational, inspirational operating philosophy

Open – generosity feeds the soul

New – rejuvenation, repetition and constant renewal

Cropper offered a series of personal anecdotes and observations that revealed those things that resonate most deeply with him about the power of seduction within innovation.

Generosity and appreciation create the optimal output performance of your heart.

***

And we’re back from our first morning session and ready for our pre-lunch immersion. The first speaker up  is Andy van Dam. He earned the second computer science degree in the world and is the Thomas J. Watson, Jr., University Professor of Technology and Education and Professor of Computer Science at Brown University. He is interested in exploring the intersection between art and computer science. His focus in this session was using the computer to access traditional artwork that would be otherwise inaccessible.

He examined the special problems of especially large artworks. With a graduate student driving he explored several large scale pieces of art including: a fresco of Egyptian art (an essential form of storytelling), the Bayeux Tapestry, and the Garibaldi Panorama (which was digitized by Brown University.) The scroll was the popular form of entertainment in its day. Measuring 4½ feet high and 273 feet long, the Garibaldi Panorama is one of the longest paintings in the world. The work depicts the life story of Italian patriot Giuseppe Garibaldi, who played a major role in the unification of Italy. The late Dr. James Walter Smith donated the relic to Brown in 2005.

In summer 2007, special funding enabled library staff and technicians from Boston Photo, a leading museum reprographics company, to fashion a makeshift photo studio in the central gallery of the Annmary Brown Memorial. They slowly and surely unrolled the panorama — six feet at a time — in order to take 91 digital photographs. The photographs will now be melded into a continuous image online. The genius of this digitization was the arrival of the Microsoft Surface operating system which had a deep zoom technology allowing an incredible level of accessibility and little instruction required to be able to view and explore the artwork.

There are two modes of access – the walk-up or the viewer mode. The walk-up mode provdes image-only view where the viewer mode introduces additional contextual information, including Ken Burns’-style image inclusion of external data and embedded video. The legibility of the artwork and the additional materials is supported by high definition capture. Additional Photoshop-like tools enable elemental image color manipulation.

The end goal is to create a platform that can be used by museums and galleries to quickly produce similar art work tours. The Tour Authoring Tool itself is like a basic asynchronous editing suite for video, which enables the addition of multiple digital assets. The tool itself is produced by the Brown Center for Digital Initiatives. They are working with the Forbidden City in Beijing on the Ching Ming Festival Scroll as well as other institutes around the world.

Display technology is going to be replaced by organic light-emitting diodes which means all surfaces around us will be interactive for display and immersion purposes. The only question is, “What won’t we be able to do?!”

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Byron Reeves is a Professor at Stanford University; a Behavioral Scientist, Author, and proponent of Interactive Gaming & Virtual Worlds in the Workplace. He came to share his thoughts about gamification and the social implications of the impact of gaming in everyday life and social system change. Reeves is an expert on the psychological processing of media in the areas of attention, emotions, learning, and physiological responses, and has published over 100 scientific papers about media and psychology.

He noted that most people who study TV as academics profess a disdain for the medium. He, however, professed his love for it. (My wife, Jo, and Professor Reeves have this in common!) To illustrate the impact of captivation and engagement he shared a picture of himself in front of a TV and then showed the complete transformation of immersion via the game experience – in World of Warcraft. This captivation triggered the question about what else you could use this kind of captivation for?

In supporting his children at their swim meets he had a fortuitous encounter with J. Leighton Read. And Read asked, “Byron, what’s cool in your lab right now?” Which he did. He described the impact of captivation as represented by gaming. When Reeves asked Read the same question, Read described his exploration of the world of work and the chaos of not knowing how to measure what success looked like until the quarterly (or annual) review. Based on this conversation they decided to collaborate.

How might we wire-up the world of work so that it more closely represented a community-based, collaborative game environment with an epic narrative?

First they needed to address the stereotyping that pervades the conversation around games. The generation that is growing up in the world of games have integrated them into their lives. The addition of narratives and participation within the context of gaming and their integration with work have the potential to transform the business world.

The work that gaming prepares you for is complex. Learning through games, arbitrary information, becomes everyday food for thought and becomes a part of its own reward. Engagement at work is a huge issue and Reeves notes that people will make mistakes. But the amount of work in games is only going to increase. Cisco sales reps play a “Closer” game. IBM teams meeting as avatars on projects. The range of examples Reeves shared was incredibly broad and rich and all of them were supported by huge amounts of information technology.

Reeves noted the danger associated with this effort. The impact of over-engagement and OSHA implications as people develop repetitive strain injuries. Or tax laws given the location of work.

Reeves left us with the question, “What would it be like if work and play were a little more alike?”

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Mari Kurashi is the co-founder and president of Global Giving which connects individual and institutional donors directly to social, economic development, and environmental projects around the world. Mari is doing work on the social entrepreneur front to bring problems into alignment with the available range of solutions.

The questions that Mari is asked are usually framed as “Did you know…?” And her response is that she didn’t have a clue that she would have this kind of impact on the world. To help us understand her journey she recounted her childhood and high school attendance in West Germany and a day trip to see the Berlin Wall. The biggest impact was the way in which the East Germans on the other side of the Wall didn’t turn to look at the people who were looking at them. She was intrigued by this and wanted to understand how a social system could create behavior that was so counter to biological drive.

She became focused on studying and learning about the Soviet Union (primarily to avoid becoming an “O.L.” and Office Lady in Japan as her visa was in doubt.) In the middle of her Ph.D. studies the Soviet Union began to fall apart and she was dismayed by the fact that political science couldn’t predict this outcome. She went to work at the World Bank (a job that she got “on a fluke”) without any idea what the institution did and what economic development entailed. She was one of three people out of one hundred who could actually speak Russian. She was in the right place at the right time.

Her passion for wanting to reverse the regime of communism in the Soviet Union was something that Mari was focused on but her time at the World Bank came to an end – in a last chance innovation program. They created a marketplace inside the World Bank in 2000 which essentially used elements of crowdsourcing. The success of this program was hampered by the inability of the World Bank to focus o this. In this realization Mari decided to leave the World Bank to pursue this concept for addressing global poverty.

The compelling thread that runs through Mari’s narrative is the notion of personal risk. Time and time again she made huge life shifts with little understanding of what she knew or didn’t know. And by approaching her life’s work with beginner’s mind (and what she sees as incredible luck) she made her way in the world.

Mari brought her presentation back to eudaimonia and the notion of how a virtuous, life well lived fits together. She said, you must decide and practice and choose how best to fit these virtues together. Eudaimonia is a deliberate practice for integration of new options that make sense to you over time.

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A long-time BIF attendee and presenter Dennis Littky, Co-founder and Director of The Big Picture Company, began with the words, “Highschools suck.” Littky talked about how the current state of our schools and colleges impacts the least prepared the most. The poor, the disenfranchised, the economically disenfranchised suffer the most from education systems that are inflexible and immovable.

Dennis had one of the students who had participated in The Big Picture Company talked about her personal journey and the power of hands-on learning. She described her education journey interviewing people at BIF and her world travels too. A remarkable perspective on what education might become, if only we have the vision to realize that the tools we need are already at hand. Our minds must change to accommodate new ways of seeing and creating the world.

Littky shared a sobering statistic – every 12 seconds a child drops out of schools. In our time at BIF7 that was 9600 children. A criminal failure of the highest order.

Littky shared his work and his focus on fighting to transform the urban school experience as a way of combating this appalling drop-out rate. His work focuses on connecting with kids, finding out about the, finding their passions, and helping them design education experiences that meet their learning needs. Drop-outs lowered to single digits (from 46% in the Providence, RI school district0 and 100% of students who stayed went onto college. As a result the Gates Foundation sponsored a massive expansion of the program worldwide.

His recent focus was the drop-out rate at the college level. 89% of first generation college attendees drop out. His work is now focused on creating a college that uses the same model of community-based learning and engagement that has been deployed in the secondary schools program. The end result is that the first class of students is graduating this year.

Next up Littky is going to focus on adult education. What a dynamo he is.

He is looking for adult mentors; consider connecting with Dennis via Twitter if you think you have something to offer.

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This ended my sojourn at BIF7.

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Innovation Schadenfreude: creating value from the misery of others

August 4, 2011 By Leave a Comment

The unspoken goal of innovation is to delight. In their delight, the user or recipient of the innovation validates the efforts made on their behalf to dispel their problem. For an innovator the joy comes from recognizing pain, suffering, heartache, or confusion and then conceiving of and designing something that takes that misery away.

If necessity is the mother of invention, then necessity can be one mean mommy, because innovation requires a challenge to address, and by its very nature, innovation has misery at its root.

To feel envy is human, to savor schadenfreude is devilish.

-       Arthur Schopenhauer

Recently there was a slideshow post at the Huffington Post about the top consumer complaints to the FTC (the Federal Trade Commission, a United States regulatory body ). Over the course of 2010, the FTC received a total of 1,339,265 complaints filed. That’s a whole lot of unhappiness. When I first read this list, given my background in customer service and technical support environments, I was not surprised. It included such complaints as credit card charges, prizes, sweepstakes and lotteries, and identity theft (No. 1 by an 8 percent margin).

As I considered the list, I began to think of this as a great opportunity for innovation. Any one of these areas could be a huge goldmine for the willing innovator.

 

Something grim this ways comes

It is only through labor and painful effort, by grim energy and resolute courage, that we move on to better things.

-       Theodore Roosevelt

What about the industries with the highest number of customer complaints? Well, let’s go to the data. At the top of the list are cellular telephone vendors, equipment manufacturers, and network providers. Given the ubiquity of these highly complex devices, seeing this industry at the top of the list is not surprising. What is more interesting is the fact that banks are near the top of this industry survey, too—ahead of collection agencies and used car dealers. The increasing complexity of available services for consumer banking combined with a less-than-transparent approach to fee implementation might make this an area ripe for transformation.

But the most compelling data from an innovation opportunity perspective is not which industries reside at the top of the list.  The greatest opportunities lie in those industries with the widest margin between customer complaints and the percentage of complaints that are resolved. That is the place of greatest pain. That is also the place where there might be rich human experience that could feed innovative solutions.

The banks’ attempts to resolve the customer issues see them at the peak. By addressing 100 percent of the complaints within 30 days, they’re not leaving much room for customer attrition. While the cellular phone companies have the most complaints, they are also doing a fairly decent job of addressing customers’ needs in a timely fashion. It’s those companies who deliver large physical products (cars, used cars, furniture) who seem to be failing to resolve customer issues quickly enough. Based on my customer service experience, I see a significant opportunity in this space to convert customers through service and support innovation.

Make the pain go away. Make a customer for life.

The enduring unhappiness of the unfulfilled need

What people need and what they want may be very different.

-       Elbert Hubbard

Clayton Christensen described the inherent need behind any successful innovation was a particular “job-to-be-done” by a customer. Here is an article in MIT Sloan Management magazine that highlights the theory behind the approach. The job-to-be-done theory holds that products and services are most successful when they connect a circumstance with a job that customers need to get done. By identifying those jobs people really care about and developing products and services that make it easier to achieve these jobs, companies can identify new markets that they were previously unaware of or that could not be uncovered by traditional market segmentation. The key ”a-ha” is that jobs-to-be-done are actually an indicator of customer pain and frustration.

When you look at the number of complaints in the segments above, you can choose to see a whole world of hurt. An innovator will see something different: They choose to see a realm of possibility.

Complaints arise from an unmet need, which often may be simply resolved, except the customer doesn’t know how to access the solution. Sometimes those needs may be quite complex, revealing a gap in functionality or utility that should be closed. Regardless, each and every complaint represents a unique opportunity to fulfill a job-to-be-done. If these needs remain unfulfilled, not only is the innovation opportunity lost, but the unhappiness will extend to the vendor of the product or service as they lose a customer.

In this light an unfulfilled need is a contagion spreading from customer to customer, and from customer to vendor, the result being a flight to the next possible alternative.

 

WTF? vs. “Can you hear me now?”

Art is not only about angst.

-       John Corigliano

Those enterprises that seek to exploit the deficiencies in their market segment often make significant strides against their competitors. Take Verizon Wireless. (Full disclosure: the parent company, Verizon, is a client.) One of the greatest complaints about mobile or cellular telephones is the poor service reception and the inability to hear calls. J.D. Power and Associates conducts a semiannual study measuring wireless call quality based on seven problem areas that impact overall carrier performance: dropped calls; static/interference; failed call connection on the first try; voice distortion; echoes; no immediate voicemail notification; and no immediate text message notification. Verizon Wireless saw that improvements in these seven areas would yield a significant return on investment, and so they began innovating to directly address these issues.

The result? Verizon Wireless began leading the way in call quality improvement, which gave rise to their decade-long advertising campaign with the enduring tag line, “Can you hear me now?” (The campaign was only retired in September 2010.) Perhaps a more compelling reason than age for the end of the campaign is that shifts in wireless phone usage, including smartphone and texting use, as well as an increase in the percentage of wireless calls being made and received inside buildings, has led to a halt in overall call quality improvement. This already has Verizon Wireless’s eye focused on a new complaint: the limitations of mobile bandwidth. Can you say, “Hello, 4G!”?

Whatever complaints your customers have, don’t disregard them. Take them for the gift they truly are. Because there’s opportunity in their misery, provided you choose to do something about it, and soon.

This post was originally featured here:

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Intangible Innovation – lessons to be learned from concrete design in a service-hungry world

April 27, 2011 By Leave a Comment

What are you doing to capture feedback on your innovations that have no tangible manifestation?
How do you determine the value and impact of those experiences that are designed (or not) for your customers when they purchase your services? How do you know that they have had an optimal experience? Satisfaction surveys only go so far. There are other ways to capture the level of service design and experience innovation success.

 

As far as I can see there is little inherent in the design process that protects design thinkers from these same failures if we choose to tackle abstract, intangible questions such as services, systems and networks. Instead we might imagine how to apply the same rigor and discipline to the design process that has emerged from hundreds of years of practice in the tangible world.

 

We might concentrate on how to make the process of the design of the intangible as transparent and open to observation as the design of the tangible. We might develop prototyping environments that allow us to learn through failure without catastrophic implications. We might accept that we need better mechanisms for criticism and feedback so that we begin to establish a body of knowledge about what works, and what does not, in the design of these things that don’t go ‘thud’ when we drop them.

-       Tim Brown, CEO of IDEO (http://designthinking.ideo.com/)

 

In a post on a similar theme recently, Seth Godin  extolled the virtues of having the designers of services “sign” their work. The rigor and discipline being applied to product development and its attendant innovation should be applied everywhere.

 

Too often, we blame bad service on the people who actually deliver the service. Sometimes (often) it’s not their fault. Sadly, the complaints rarely make it as far as the overpaid (or possibly overworked) executive who made the bad design decision in the first place. It’s the architecture of service that makes the phone ring and that makes customers leave.

A catchphrase employed by a client also comes to mind. He is fond of saying, “You touch it, you own it.” In that sense all innovation should be owned. In that light if the original need is not being appropriately addressed, or the problem being adequately resolved, the recipient of the service (or new business process, etc.) can go to the design source to provide feedback and insight into what was missed. The journey to a richly rewarding innovated experience is paved with the feedback of customers and users. Neglect them at your peril.

The keys to learning lessons from physical product design are to make the intangible concrete; designers and innovators should:

  • Own the design. All designers must take responsibility for their work. The decisions made should be documented and reference-able, regardless of the point of origin. No hiding.
  • Experience the design. All designers should experience their own design. They should prototype it, move through it and live with it. And they should be the first to experience it, “live.”
  • Create a feedback loop in and around the design. Make it perpetual and make responses to that feedback a part of the ongoing evaluation process, too.

No innovator is omniscient. If experience design is not tied to results accountability for performance is an afterthought but less fleeting than the negativity associated with a bad experience.

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Recognition as a force to foster innovation

October 9, 2010 By 1 Comment

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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Where Good Ideas Come From? Steven Johnson answers the question

October 1, 2010 By 2 Comments

Steven Johnson’s new book, Where Good Ideas Come From: The Natural History of Innovation, explores the way in which new ideas come into being and how innovations are derived from them.

He explores the spaces that promote innovation and the way in which it sometimes takes many years, and multiple attempts, before an idea will fully take hold. He explores the concept of the “hunch” and the fact that for an idea to become an innovation it sometimes has to be combined with one or more other hunches. All of which provide clues as to what is required in an organization culture to make it more innovation-capable

Here’s a great overview of the basic themes in the book…

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Small Business Big Ambition: Why innovation is no surprise in the smaller enterprise

September 7, 2010 By 2 Comments

Nothing can stop the man with the right mental attitude from achieving his goal; nothing on earth can help the man with the wrong mental attitude.
- Thomas Jefferson

In times of uncertainty we search high and low for answers to our overarching question, “How do we dig ourselves out of the deep pile of…stuff we’re in?” If there are qualifications for uncertain times, present economic indicators demonstrate that all criteria are not only met but exceeded. And our search for answers (and perhaps a shovel) continues in haste.

With very few macro-economic levers left for government officials and public policy experts to pull as they try to shift the economy into a growth pattern, our range of vision and influence narrows. We won’t find big fixes no matter how hard we look. Larger businesses have cut costs dramatically and now find themselves with large cash reserves, waiting for the economy to turn around. They patiently await orders for more products and services, before they place any orders or invest in anything themselves. Essentially, each large enterprise is waiting for the next firm to blink.

Instead of waiting for bail-outs or big business-driven economic up-ticks, we must turn to one of the greatest sources of scalable economic activity and innovation, the small to medium enterprise, for our answers. When highly functioning, these smaller enterprises know how to: make scarcity work for them (they live it every day); work closely with their customers to meet their most pressing needs; and make rapid learning the activity that gives them momentum in the marketplace.

More with less
No complaint … is more common than that of a scarcity of money.
- Adam Smith

In the popular press (whatever that might be today!), it’s difficult to get a firm handle on what’s going on, or better yet, what could go on with small businesses. By their nature, small businesses are harder to classify and quantify than their big business brothers and sisters. If we consider the small enterprise to be a business of fewer than 200 people, it still leaves a bulk of the economic activity of most developed countries and nearly every developing country. These are the firms for whom bootstrapping is not something done only during times of economic distress, but all the time. They know how to stretch a dollar, or euro, or peso. But that’s not the only thing they know how to stretch.

Time, not just money, is a malleable resource, too. How you invest your time—and on what—drives a higher return on investment. For small businesses stretching time, doing more in a shorter period, gives them an economic leg up, especially when it comes to embracing and extending technology. Smaller firms have many advantages as innovation sources because they are quick to adopt new and high-risk initiatives; they facilitate structures that value ideas and originality; and they have a better capacity to reap substantial rewards from market share in small niche markets. This first-mover advantage was created by and for the small enterprise. It enabled them to get closer to customers other firms little-realized existed.

Closer to our customers
There’s a lot more business out there in small town America than I ever dreamed of.
- Sam Walton

By decreasing their cycle time, small enterprises can do more for their customers than most large enterprises would commit to. The small enterprise, which usually carries with it a smaller customer base, can remain closer to their customers’ various needs—a distinct advantage over many larger businesses. This means smaller firms can pick and choose where and when to provide innovative products and services. By virtue of their size, the small business can choose to invest a larger proportion of time, energy, and expertise to discover the depth of their customers’ needs, and then pursue those needs by creating innovative solutions.

This closeness to the customer experience is also driven by the need to maximize their share of their customers’ expenditures. By remaining close to the customer, the small enterprise can seize newly arising opportunities to provide value and increase revenues simultaneously. Correspondingly, by seeking to win more business by remaining close to existing customers, the cost-of-sale is driven down, which has a positive benefit to the bottom line: a positive, deep relationship is usually a more profitable relationship. And when there a fewer customers, it’s usually easier to read which ones will be more profitable than not, and that means more effective targeting for higher risk efforts that may yield greater innovation benefits.

Faster mistakes
With any loss, you want to try to regroup and learn from mistakes.
- Elena Leon

Which leads us to another reason why small enterprises are a better bet for long-term economic recovery—they are learning machines. For an employee to add to an innovative process, it may take time for them to understand the research agenda of, and challenges faced by, the firm in which they are employed; in other words, an employee may need to move up the learning curve before adding to the innovative activity of the firm. In a smaller enterprise, that learning curve may be much shorter. Existing processes and systems may be much more fluid. The amount of information to be learned and retained as working knowledge may be smaller. Better yet, the social network through which so much learning and experimentation takes place is smaller and easier to navigate, too.

For the smaller enterprise, the whole employee pool can be geared toward discovery. Each interaction, whether with an internal peer, or an external client or supplier, can be seen as an opportunity to explore possibilities. Within that exploration will be a series of hits and misses. This doesn’t mean that the inherent failures associated with trying something new within a smaller enterprise are less impactful—far from it, but it does mean that the recovery from those missteps may be easier and often shorter.

This is not to negate the impact of the larger enterprise on economic recovery, because without them there would be no recovery, as they provide a stable foundation for the broader economy. But it is to the smaller enterprise we should look for more rapid improvements. The smaller enterprise is thrifty by nature, eager to embrace its customers’ experiences, and willing to risk—through innovation—for greater reward. Unlocking the power resident within small enterprises is key to broader economic recovery. We’ll explore some of those methods in future posts.

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If we build it, will they come? Innovation & the Boom hangover

August 13, 2010 By 4 Comments

Exploring how R&D spending points toward a widespread desire for innovation in large companies but not necessarily an economic upturn any time soon.

I would gladly pay you Tuesday for a hamburger today.
- Wimpy

The way companies position their investments in research and development (R&D) or capital programs speaks volumes about the kind of innovation culture they possess. Increasingly, large companies stick to their innovation investment programs in the face of broader internal cuts in expenses. According to Booz & Co.’s special report “Profits Down, Spending Steady: The Global Innovation 1000,” by Barry Jaruzelski and Kevin Dehoff, some companies are even increasing their innovation spending in the hope of being better positioned for the longed-for economic upturn. Which would seem to be a sign that things will improve soon, right?

Not so fast.

Big Business does not represent the national economy
An article by Zachary Karabell in Time magazine recently described the divergence of large, market-capitalized companies’ performance from the respective economic performance of their headquarter nation-states, where previously they were linked quite closely:

Stocks are no longer mirrors of national economies; they are not — as is so commonly said — magical forecasting mechanisms. They are small slices of ownership in specific companies, and today, those companies have less connection to any one national economy than ever before.

The key message was that because of their ability to spread both their exposure and investment across multiple geographies, large companies had inoculated themselves against the impact of any single national economy. The ability of USA-based companies to straddle economies, in some cases by deriving more than 50 percent of their revenues overseas, has meant that they’re no longer profoundly impacted by the US economy, nor are they a true indicator of US economic status.

The economic upturn fake-out
While the US economy languishes with unemployment near 10 percent, faces housing foreclosures once again on the rise, and wrestles with a multi-trillion dollar plus-sized deficit, companies live in a different world (or possibly a parallel universe). The majority of publicly traded companies are beating analysts’ earnings estimates (250 beat estimates and 54 disappointed) and sales estimates. The gap between the US economy’s performance and US-based companies’ performance is also reflected to a lesser extent in the dire straits of the European economy and the reasonable success of EU-based companies. They, too, continue to thrive and spend on innovation.

At the heart of our success lies our commitment to innovation.
- Steve Ballmer, Microsoft CEO

Why are companies spending big on innovation when all indications say that we are in this economic mess for the long haul? The problem with a strategy that cuts back on all expenditures during an economic downturn is that you discover unpleasant consequences years later — when you’re lagging behind your competitors. By then it’s too late. It seems today’s companies have learned the lessons of the past. Immediately following the dot-com bust of the early 2000s, companies pulled back so far that their response to the economic upturn was delayed to the extent that competitors gained toeholds, or their enterprises folded, origami-like, in on themselves. They became small, misshapen relics of their former glorious selves.

Consider the examples of Nortel, Corning, and Cisco. Nortel died (its shares trading on their final day at $0.185, down from a high in 2000 when it comprised a third of the S&P/TSX composite index). Corning has taken the better part of a decade to recover (notwithstanding the emergence of its current breakthrough product—Gorilla Glass—discovered in, oh yes, 1962!). And Cisco, once the most valuable company in the world, finally figured out that having all one’s eggs in a single basket wasn’t a safe bet under any economic conditions, and is now built for survival.

Diversification via innovation is now seen as key. Hurray! Which is fine, but what happens if all this innovation takes place but there’s no one willing to buy it? Consumers without jobs don’t consume.

Is innovation really the answer to our economic woes?
Certainly the consumer space in the USA has tightened up remarkably, an indication that things won’t be turning upward any time soon. During this recession, the trend of consumers switching to store-brand labels and other cheaper alternatives has dug into the profits and dominant market shares of brands owned by P&G, the world’s biggest consumer-product maker and seller of many of the most premium-priced household products on store shelves. Of note was the recent news that for many of its core brand staples, P&G has reduced prices by as much as 10 percent. As for its premium-priced brands, the so called “nice-to-haves,” expect those prices to increase to offset the high volume product price drop.

The reality is that if you are doing well in this economy, either as a company or an individual, you will continue to do well regardless of a statistical double dip.
- Zachary Karabell, “A Double Dip Recession? Who Cares?” Time Magazine

The challenge with the current economic situation, and its associated strong company performance, is that investment in innovation by large companies will do little to improve the lot of the many people still living in recession conditions. In a report released earlier this month, the US Congress Joint Economic Committee observed fragile and uneven growth for the US manufacturing industry. The report cites 136,000 new jobs that the manufacturing sector created in the first half of 2010, but notes that inventory restocking may be responsible for much of those gains. For the millions of jobs lost, adding a little more than a hundred thousand is but a drop in an ocean. The unemployment rate is just under 10 percent, but that doesn’t begin to cover the enormous chaos on the job front.

The “true” unemployment rate (combining figures for workers who have dropped out of looking for work, to the underemployed working multiple part-time jobs, and those actually counted in the unemployment roster), is figured at closer to 17 percent. Total hours worked and total compensation have both declined. And the easy consumer credit and housing-backed affluence have gone, never to return. Essentially the economy has bifurcated.

Are we cheered up yet? No? There is a way forward.

Each month 400,000 new small and micro-businesses start in the USA. At present, there are 5 million (yes, million) small businesses (100 employees or less) employing far more people than the Fortune 100. If we are going to look to innovation as a transformative tool for unleashing creativity and improving the economic outlook of the majority of the population, it is to small businesses that we must turn. If we help build them, more could come to the table to promote a stronger economic upturn. They could be active participants in energizing an economy that not only helps people survive, it could once again be an economy where many could thrive.

Big business innovation is not the answer. It simply can’t create the number of jobs fast enough to pull us out of this economic funk. What can we build together to unleash the innovation residing in small and mid-sized enterprises?

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Playing with a Full Deck – OnInnovation

July 30, 2010 By Leave a Comment

Low Tech Tools to Foster High Output Innovation Thinking

One of the questions often asked by those seeking to create a strong innovation culture is, “What are some good tools for engaging people across my organization?” Well the consultant in me would usually hedge his bets and would offer the universal response, “It depends.” But that is as singularly unsatisfying to say as it is to hear, so I mostly take a multiple alternative approach in the hopes of landing close to the targeted need. The first place I usually start is with some of the very lowest of low tech: playing cards, or their trading card equivalent. Why?

For the reason why, see the full post here at the OnInnovation blog – powered by The Henry Ford.

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Innovation in the Rear View Mirror – The challenge of revisionist history and hindsight bias

July 9, 2010 By 3 Comments

I always avoid prophesying beforehand, because it is a much better policy to prophesy after the event has already taken place.
- Winston Churchill

Raise your hands if you have ever met someone who has a tendency to relive their glory days. You know, that one person in a group who fondly remembers better times, or who always finds the present lacking because “the last time this same thing happened, there was a much better result”? We are not talking about the story teller, who fires up those around them with their passionate recounting of a victory or a discovery, nor even someone who occasionally reminisces. We’re talking about the person with a pathological need to live in the past, who might be physically in the present but whose mind is a year or ten in the past. Strangely enough, they keep visiting the present, trying to capture us and cart us back there with them.

We’re going to do what we’ve always done (and wonder why we always get what we’ve always got)
May you have the hindsight to know where you’ve been, the foresight to know where you are going, and the insight to know when you have gone too far.
- Irish Saying

As we noted in a previous post, storytelling has a vital role in a healthy and vibrant organization. This type of storyteller is not the same. The resident revisionist historian simply cannot let go of the past. With perfect hindsight they see how things were so much better before, and that when change occurred, it put us on the road to ruin. The revisionist doesn’t seek to use their past experience to inform their present-day actions. They would rather live in the past. Over and over and over again.

What students in the United States knew of George Washington’s youth was that he apparently chopped down a cherry tree on the family property. Unfortunately, this is a blatant piece of revisionist history. An archaeological dig at the Washington family home found no such cherry trees. In fact, additional research uncovered that the original biographer of Washington, Mason Locke Weems, fabricated the story in order to make the general, first president, founding father, and all-round statesman “more honest”! Strange to think that aggressively pruning a prunus avium and not lying about it would be considered a honest act.

This fabrication and the apocryphal story built upon it lend little to Washington’s character, and revisionist history lends little to the life of an organization. Sorting the truth from fact can be a running battle that can exhaust an organization, leaving fewer resources for creative endeavors, and drain the will of the organization.

A friend of mine, Sam, used to tag people as “radiators” and “drains.” Which I believe he picked up elsewhere (perhaps here?) Now, I’m not one for labels. They’re inflexible and terribly difficult to remove once in place. But his notion that people either radiate energy to those around them or they drain it from them — like so many dim-witted psychic vampires — rings appallingly true.

How do you think this plays in an organization attempting to embrace and extend its ability to innovate? Not well at all.

Looking forward but only seeing the rear view mirror
In today’s complex and fast-moving world, what we need even more than foresight or hindsight is insight.
- Anonymous

Another powerful, distorting perspective present in the psychology of organizations is hindsight bias. This is the inclination to see past events as being more predictable than they in fact were before they took place. Hindsight bias has been observed experimentally in a variety of settings, often where defined levels of expertise are expected, including politics, sports, games, and medicine. In psychological experiments of hindsight bias, subjects tend to remember their predictions of future events as having been stronger than they actually were, in those cases where those predictions turn out to be correct. This inaccurate assessment of reality after it has occurred is also referred to as “creeping determinism.”

How does hindsight bias impact an organization’s ability to innovate?

By disguising past performance, hindsight bias makes it difficult to determine how original actions may have resulted in a specific outcome. The memory of events may become so distorted that it bears little resemblance to the reality of what occurred; that makes any potential lesson learned not only poor but potentially hazardous.

Learn from your mistakes – don’t relive them
Traditional scientific method has always been at the very best, 20 – 20 hindsight. It’s good for seeing where you’ve been. It’s good for testing the truth of what you think you know, but it can’t tell you where you ought to go.
- Robert M. Pirsig

Frank and honest sharing of information is for a wider benefit. It creates a mental space for new ideas to crop up or flood in. This differentiates it from the dynamic surrounding those who are “revisionistas” and “hindsighteers.” (There should be a club for this which involves hats with rearview mirrors attached, I’m sure.) In this dynamic, any benefit, if it can be called that, is derived primarily for themselves. Their approaches leave little room for learning, positive affirmation of true success, or the opportunity for discovering a more holistic solution to the pressing challenges being addressed.

Mistakes and missteps for anyone interested in innovation are a gift. They help define more clearly “where you ought to go.” In being honest about our challenges and the qualities of our successes, and not disguising them or explaining them away through false tales, we will build towards innovations that are truly extraordinary.

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Using Stories for Design Ideas – new from Johnny Holland Magazine

June 15, 2010 By Leave a Comment

In a new post at Johnny Holland Magazine, Whitney Quesenbery and Kevin Brooks share insights from Rosenfeld Media’s book ‘Storytelling For User Experience’. From the perspective of innovation, which is increasingly wedded to the concepts of design and design thinking both conceptually and in practice, storytelling is a powerful discovery and generative tool. This post offers great perspectives on the use of story to capture current state challenges, and future state possibilities.

“When we say that the design must “tell a story,” we are not just talking about games or interactive fiction, or even about turning a work application into an adventure (“Conquer the benefits allocation maze…”). Instead, we mean the kind of stories that help you create new designs. These stories are used to make you think of new possibilities, give you the tools to encourage a self-reflective kind of thinking—design thinking—or so you can imagine designs that will improve the lives of other people. Stories explore ideas from user research.” More here..

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