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Excessive Innovation – Making Choices About The Value We Create

March 1, 2013 By Leave a Comment

ShoppingCarts_ThumbnailNothing says “success” like wretched excess, or so it would seem. A challenge of innovation today is the overwhelming perception of its strong bias for fostering rampant consumption. The drive to acquire the new and improved has overwhelmed a mid-20th century view of making do an repairing things to extend their useful life. Now new products and services are created and go in search of markets and customers placing burdens on resources, ecosystems, and personal economies. The necessary is trumped by the pretty. The essential is supplanted novel. The vital and nourishing is squeezed out by the unimportant and artificial. To what end?

To convert the business man into the profiteer is to strike a blow at capitalism, because it destroys the psychological equilibrium which permits the perpetuance of unequal rewards. The businessman is only tolerable so long as his gains can be held to bear some relation to what, roughly and in some sense, his activities have contributed to society.

– John Maynard Keynes

(Quoted in Keynes and Capitalism, Roger E. Backhouse and Bradley W. Bateman, History of Political Economy, 2009)

Innovation should be about creating value; not only the short-term value of satisfying basic needs, but addressing long-term complex challenges that require sustained attention and focus. Much of the innovation we acknowledge is focused on a customer, their experience, and the momentary satisfiers at play. Innovation is being wed to the bright and shiny in a shotgun marriage of inconvenience. We need more and should expect more from innovation than something new to buy.

I create nothing. I own.

- Michael Douglas as Gordon Gecko in Wall Street

As a short-term game innovation without an eye to longevity yields hit and miss return. When it works it might be a tremendous success (think fads, like Crocs – the ugliest shoes on the planet) but often market-focused innovation responds to a surface need and does not address the deep and abiding need present in a customer’s circumstances. Perhaps we need to consider innovation in deeper and more abiding terms and ask ourselves:

  • How might we truly seek to create value?
  • How might we create in a ways that are both additive and generative?
  • How might we practice and foster stewardship in lieu of ownership?

Something tells me that there has to be an innovation-based answer to the issue of rampant and unflagging consumerism. What do you think?

After posting this a link came our way from an interview between Joel Makower, Group Chairman of GreenBiz Group, and Yves Chouinard, the Founder and CEO of Patagonia that is very relevant. The full post is here.

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Great post on the power of Priming at FastCompany

September 15, 2011 By Leave a Comment

Here at Primed Associates we are always looking for others’ takes on the concept of priming. This week we share a great post from the FastCompany site by Martin Lindstrom, who has a new book out, Brandwashed: Tricks Companies Use to Manipulate Our Minds and Persuade Us to Buy

Here is Lindstrom’s opening about the power of priming in order to increase the likelihood of a desired outcome…

Have you ever been primed? I mean has anyone ever deliberately influenced your subconscious mind and altered your perception of reality without your knowing it? Whole Foods Market, and others, are doing it to you right now.

Derren Brown, a British illusionist famous for his mind-reading act, set out to prove just how susceptible we are to the many thousands of signals we’re exposed to each day. Read more here.

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Motivated to innovate: How an organization’s culture can cultivate or crush

June 27, 2011 By 1 Comment

While motivation is essentially a self-generated state, the organizational culture of a group or individual dedicated to the pursuit of innovation greatly influences their performance. That culture both dominates and mediates, and if it is not positively addressed, competing motivations and needs can come into play. As has been mentioned previously more than once in the Think Primed Blog, innovation requires the introduction of change into inherently stable systems. Because of this, an organizational culture plays a large role in fostering and sustaining motivation.

Everybody needs beauty as well as bread, places to play in and pray in where nature may heal and cheer and give strength to the body and soul.

-       John Muir

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Source: http://en.wikipedia.org/wiki/File:Maslow%27s_Hierarchy_of_Needs.svg

 

To meet those competing needs, an organization must address powerful personal motivators. One of the best models highlighting what’s at stake during this kind of effort is Maslow’s Hierarchy of Needs.

So much of organization life takes place at the bottom of this pyramid; the equivalent of “keeping the lights on and the water running.” Which is a great model for an Industrial Age company intent on making an endless succession of the same widgets in a production line. Not many of those companies thriving today, are there?

A step up from physiological needs are the types of organizations that pitch benefits packages addressing the safety and security concerns of their members and, to a certain extent, some esteem needs. Organizations with strong and stable cultures often reinforce the needs associated with love and belonging, yet they have all the fun and dysfunction of families. They’re mostly built for comfort rather than speed, required to respond to changing and dynamic market forces.

The most dynamic and innovative companies seek to work at the highest levels of this model, to get the best from people every day.

 

Price of admission

It’s not enough for an organization culture to provide the equivalent of shelter in a storm, especially not if that same organization wants its members to invest themselves in the success of the enterprise. Prior to the Great Unpleasantness (aka the Great Recession), companies were scrambling to create environments that attracted the best and the brightest. Though many companies today remain focused on that, the majority merely pays it lip service or don’t pursue that practice at all.

These latter companies are minding their reserves and hoarding their resources. This is practice won’t yield significant results at all.

The price of admission to those seeking to create innovation-capable cultures is the same as it has always been: collaborative cultures where people feel safe to share their ideas, where they feel like they can find a “home,” where they are recognized for their contribution, and were they feel they can be their best selves. Charlie Gilkey, author of the Productive Flourishing blog, recently noted that it took him several quarters to come up with his list for a post titled “What I Believe.” The end result is something that reflects what most of us are looking for in our lives. Work is where people spend most of their waking hours, so organization better figure out how to create the conditions for a culture that supports those beliefs he mentions.

One such example of the fulfilling organization, a company dedicated to the principals of loose/tight leadership (small set rules, tightly managed), is the online video powerhouse Hulu. Recently Fast Company magazine ran a great profile online of Hulu’s organization culture, which showed how power is distributed to the lowest organization level possible for effective decision-making and execution. Engagement is driven by the establishment of a small set of performance-based rules that are tightly enforced, while most aspects of organization life are left to the individual or group to design, organize, implement, and process. The net result is an organization that makes people want to deliver their best effort.

We all want to belong

This kind of democratically-biased culture creates a cohesion that is rare in many larger organizations. Usually when start-ups cross the growth chasm (as distinct from the adoption chasm defined in Geoffrey Moore’s book Crossing the Chasm), the transition in revenues or size (over $10 million and over 150 people, respectively) means their flexibility collapses under command-and-control patterns and poorly defined and managed performance expectations. That hasn’t happened at Hulu. They are large, growing larger, and thriving by deferring to their community members.

Organizations that fail to cross the growth chasm come up hard against the reality of being inhospitable. They cease to grow and flourish, because they don’t make room for the strength that others may provide by applying their own unique and divergent talents. The start-up company that fails to grow is usually completely tied to one person’s hierarchy of needs: the founder. The founder is usually on a never-ending treadmill of addressing their most elemental needs for safety.

In Hulu’s case, ownership of issues, problem-solving, and performance management is baked into the culture of this company. Everyone has an opportunity to accept responsibility and accountability for outcomes. Rather than struggling with lines of authority, each person is supported in discovering how they may best contribute collaboratively to the overarching corporate success. This cohesive sense of belonging serves as a path for higher levels of self-actualization, each of which offers material benefit in attaining organization strategy.

 

To be held in high esteem

The path through successive levels of Maslow’s Hierarchy is not necessarily straight, but the value to the company of performing at each successive level is nearly always positive. Provided that each level offers some opportunity for consolidation of the needs met, and that the striving continues upward, value generation will be significant. Given a place to call “home” and the recognition that they do have a place to contribute, many employees capitalize by fostering esteem among their peers.

That focus informs value by playing to the individual’s strengths so that they may be successful and have increasing impact over time. The respect of peers for contributions, whether directly from innovation or as a result of building on an existing practice or procedure, by turn fosters self-respect. This leads to a positive environmental feedback loop—each success creates the opportunity for greater successes over time.

A better you/me/us through self-actualization

At the pinnacle of Maslow’s Hierarchy is the concept of self-actualization. The term originated in a work by Kurt Goldstein called The Organism: A Holistic Approach to Biology Derived from Pathological Data in Man (commence head-spinning now). While Goldstein used the term to describe a state all humans strove to achieve, Maslow used the term self-actualization to describe a desire, not a driving force, that could lead to the realization of one’s capabilities. For Maslow, self-actualization did not determine one’s life; rather, it gave the individual a motivation to achieve personal ambitions and fulfillment.

Taken as a level of development to meet specific personal needs, self-actualization is completely in alignment with effective innovation. Those people who are operating to become more self-actualized are more likely to embrace reality and facts rather than deny truth. This leads to more rational understanding of the root causes of circumstances and a drive towards focusing on problems outside themselves.

When it comes to an understanding of the human-centricity required for effective innovation — the notion that an innovation must have a specific utility in mind — those who firmly address their need to self-actualize accept their own human nature with all its shortcomings, and similarly accept the nature of others with a general lack prejudice. This breeds resilience and a spontaneity that are great innovation traits.

Those organizations that can play to this desire for self-actualization, that recognize the need to become our better selves, will reap the benefits. Command- and control-driven organizations will, by their nature, drive performance from the level of meeting physiological needs of safety and property. Those organizations that treat their members with respect, recognizing their talents and contributions, will enable their members with the freedom to be their best, and in so doing, will make better organizations because of it.

What kind of organization are you building? A safe place? Or a place to become your best self? If you’re interested in more innovation, it had best be the latter.

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

February 22, 2011 By 1 Comment

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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New from Primed Associates – Primed for Innovation Issue 1

February 16, 2011 By Leave a Comment
Primed for Innovation Issue 1 - The Innovation Ecosystem

Primed for Innovation Issue 1:

Welcome to Primed for Innovation a primer on things to consider when you are interested in improving your organization’s approach to innovation. The following topics are offered as thought starters. [Read more...]
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Finding the right box—innovation success is constraint-based

February 7, 2011 By Leave a Comment

Some people are shoppers, some people are spendthrifts, and some people are hoarders. The same can be held true for companies. Some companies are acquisitive, some are profligate, and some hoard resources. There is a special breed of company that chooses to hoard intellectual property—whether they use it or not—or hoards data without thinking about its purpose. Information is only useful when used, and much of it has a surprisingly short shelf-life. A company that is demonstrably hoarding, Generate Company—an innovation-focused consulting firm based in Minneapolis, Minnesota—has taken to hoarding innovation processes. Not happy with creating and disseminating their own processes, they are now collecting them on a grand scale and brokering them. The end result is an innovation database with the superlative title “The World Database of Innovation.” Thank goodness they are not driven to hyperbole.

Setting aside the relative value of such a database for the time being, one very interesting piece of information has bubbled to the surface as a result of this information hoard. It seems that among the 163 different processes for innovation that have been accounted for thus far, common to those that have verifiable data points is that constraints are a significant factor in success. Based on their analysis of the information in their database records, scarcity of resources shows up as the single strongest driver of innovation within organizations in general. The power of constraints raises its head yet again.

Not all constraints are the same
The problem is all inside your head
She said to me
The answer is easy if you
Take it logically
I’d like to help you in your struggle
To be free…
There must be fifty ways
To leave your lover
- Paul Simon “50 Ways to Leave Your Lover”

For most organizations, the definition of constraints is usually confined to time, cost, and resources, but there are two other more powerful constraints to be considered at the outset of any innovation efforts: 1) constraint created when we define the challenge we will address, and 2) the constraint created when we define the opportunity we will target. These constraints are anchored in the strategic intent of our organization and in our will to achieve that intent. They lie at the intersection of what we want to do and what we will actually do. This intersection is often a gray area in organizations, filled with miscommunication, poor decisions, and limited attention spans.

Where most organizations get wrapped up in attempting to balance their competing operational constraints is in the direct management and enforcement of the imbalance among constraints, where much of innovation lies. The simple fact remains that if any one constraining factor changes, at least one other constraint will be affected. If the schedule for development is shortened, then the budget will likely need to be increased. If additional features are added, then the risks associated with releasing the product to market will increase, too. Each choice we make is a reflection of the associated constraints within which we manage. But a constraint is also something we can react against. A constraint can provide a foundation for pushing us in a new direction.

An artist faced with a blank canvas, access to all the materials and colors of paint she could possibly desire, and as much time as she wants, will likely find herself unhinged by the freedom if asked to paint whatever she chooses. The range of outcomes is infinite in this setting. If a single choice is made, however, such as a determination on who the painting is for, automatically provides the artist with a frame of reference within which to work. Regardless of the subsequent choices she makes, that first choice of constraint by the artist will directly inform all subsequent outcomes and her eventual success.

Powered by the right constraints
The only way to discover the limits of the possible is to go beyond them into the impossible.
- Arthur C. Clark

The same can be said in product or service development when there is an ill-defined customer or market. In this situation, the product development team, or innovation group, will find itself floundering. Without a clearly defined customer, there is no one to build for, no problem to define and design against, and no way to assess whether or not you have successfully addressed a need. Yet when you look out at the range of products and services available, you might find yourself asking, “Who the heck was this intended for?” The constraint of a specific customer need is missing in action. Design and development efforts disconnected from customer need leads to products in search of a buyer.

A poorly identified customer may wreak more havoc on an initiative than any lack of funds or resources ever could, because it leaves innovation efforts untethered. Without anything to anchor new concepts to, any and all concepts will be satisfactory (or correspondingly unsatisfactory) and the only measure of success will be whether or not the effort is validated in the marketplace through sales. Determining success will be hit or miss, because even the absence of sales doesn’t necessarily mean that the effort is not useful to someone—it simply means that the market was not discovered or defined before an effort was expended.

The absence of a clearly defined target customer also upends the usefulness of managing resource and time constraints. Why bother limiting use when the stakes are so low? Why spend at all? All of which leaves us in the unenviable position of defending the indefensible and delivering the useless. Not exactly the best way to add value, is it?

Joy of constraints
The more constraints one imposes, the more one frees one’s self. And the arbitrariness of the constraint serves only to obtain precision of execution.
- Igor Stravinsky

Rather than being dismayed by constraints, those determined to innovate must learn to, if not love, then at least embrace them. By embracing constraints and recognizing the value of limits, the effort to overcome them may yield surprising results. Consider the perennial favorite example of those who have a deep and abiding passion for innovation—Steve Jobs. His intense dislike of buttons (he finds them aesthetically unappealing) has driven consumer product innovation in surprising ways.

Four years ago, prior to the release of the iPhone, Mr. Jobs’ dislike of buttons became something of fetishistic side dish in the hoopla over the game-changing nature of that device. It was perhaps most clearly on display when Mr. Jobs unveiled the remote control for Front Row, the media center software for Apple TV, when he reveled in the simplicity of the Apple remote and compared it on a presentation slide to a large, ugly complex remote with more than 40 buttons. “I don’t know that there has ever been a slide that captures what Apple’s about as much as this one,” Mr. Jobs said at the time.

This dislike led to a design constraint, which then led to some remarkable changes in the accepted way we interact with our personal digital devices. We are moving from hunting and pecking on tiny, ill-formed keyboards to swiping, flicking, and wiping our way into and through the information available to us on our nearly buttonless devices. The contact we make today may disappear into the ether, too, with the fast-approaching wave of gestural input-controlled devices, if the most recent Consumer Electronics Show in Las Vegas is any indication. All because one man with a love of black turtlenecks (if ever there was a design cliché) hates buttons.

Constraints are not our enemy. They are a fact. We can choose to endure them and use them for our purposes, or let them define our efforts in entirely negative ways. Define your purpose in relation to your intended customer and define your outcome in terms of their needs—in so doing, you can move the goalposts and change the nature of the competitive landscape. Make a sandbox of your own devising and discover the creativity inherent in constraints.

How are constraints defined in your organization? How might you make better use of your constraints?

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Resource Acquisition: beg, borrow, steal or bargain, rent, reuse—innovation resources are a matter of mindset

January 24, 2011 By Leave a Comment

For those coping with the annoyance or pain of resource scarcity, it is required that they go on the hunt. Some people think that in order to get a thing done any means necessary might be used. “By any means” usually causes more damage and heartache than success. Rather than begging, borrowing, or stealing, what if a more expansive approach was adopted? By avoiding zero sum or negative stakes game-playing, a more successful path to addressing the need for resources might be followed.

Neither a borrower, nor a lender be; for loan oft loses both itself and friend, and borrowing dulls the edge of husbandry.
- William Shakespeare

Beg or bargain
I wish I could stand on a busy street corner, hat in hand, and beg people to throw me all their wasted hours.
- Bernard Berenson

In its most simple form, begging is requesting a donation in a supplicating manner. It places the person requesting resources in a submissive position and creates an unhealthy power dynamic which is not conducive to the spirit of innovation. The issue with begging when seeking resources for innovation efforts is that it devalues both the effort and the outcome. The one-sided exchange that begging represents actually has a detrimental effect on the ability of the team working to produce an innovation, too. It can be demoralizing and can de-energize the pursuit of breakthrough ideas. A better alternative is to bargain, which may mean that the exchange will take on a much more dynamic quality.

Bargaining is an alternative strategy for acquiring needed resources. Optimally, if it costs the provider nothing to engage and allow bargaining, they can position themselves for either present service or future benefit. It allows for capturing hidden organizational or operational surplus as it allows value discrimination, a process whereby a provider can “charge” at a higher rate to those who are most eager (or more desperate) to use their resources. Haggling may be a part of the bargaining experience, but a better alternative is to use a bargaining approach that accounts for and supports common interests.

Integrative bargaining (also called “interest-based bargaining” or “win-win bargaining”) is a negotiation approach in which parties collaborate to find a win-win solution to their dispute. This strategy focuses on developing mutually beneficial agreements based on the interests of the parties providing and seeking resources. Interests include the needs, desires, concerns, and fears important to each side. They are the underlying reasons why people become involved in a conflict, and integrative bargaining seeks to neutralize them by balancing needs across a time continuum.

In this way a resource-poor innovation team can gain access to things that may have been previously unattainable. Another alternative is to “rent” the resource required.

Borrow or rent
A great pilot can sail even when his canvas is rent(ed).
- Seneca (rented to fit)

Those of you not on the East Coast of the United States the day after Christmas Day (aka Boxing Day) missed “Snowpocalypse 2010.” At least, that’s what the local news media wanted to call it after over a foot of snow (more in some places) was dropped. To say that it put a crimp in post-holiday plans, for example returning home, would be putting it mildly. And as someone, among many, who had to dig through a few feet of snow to clear footpaths and restore access to pedestrians and automobiles alike, I found myself wishing for a better way.

Regardless of the impacts of global climate change, we can expect to experience about one or two severe storms in a given season where I live. If I was foolish with my money (I try not to be) and in love with loud and expensive gadgets (I have weaned myself off them), I would have taken this storm as a sign that I need to purchase a snow blower. For those of you in warmer climes, a snow blower does exactly what its name suggests. It takes snow from one place and blows it someplace else, essentially making the snow someone else’s problem. Think of it like a wood chipper on wheels or a lawn mower without a bag—in its place is a spout that sounds the snow flying. All good fun.

Snow blower-less, I was left with limited alternatives: dig and keep digging, rely on the kindness of snow blower-owning neighbors to share, or go rent a snow blower for the day. Given that the rush on snow blower rentals was likely high (and I was a day late and a dollar short), the only options left to me were kind neighbors and my own brawn. Thank goodness the kindness of neighbors prevailed and my digging was somewhat lessened.

The choices we face as innovators are somewhat similar when our resources are tight. We can muscle our way through as best we are able. Often the end result is a longer effort and a poorer-quality output. Or we can rely on the kindness of others to provide support or material, but that usually is at their whim or disposition. Borrowing always leaves us open to question. A better choice is to plan for the resource shortfall and respond accordingly by scheduling your rental of the required resources.

More often than not, flexible, time-bound, contracted resources can meet our needs better than we might anticipate. An example of this is the abundance of application development in the App areas on the iPhone/iPad ecosystem, the Google Android Apps Market, or BlackBerry’s App World. There simply aren’t enough developers on these platforms to create the range of apps as fast as desired if they were all to reside as employees inside the companies who want their creative output. Instead, these developers have mostly formed cooperative project teams focused on delivering apps on a per contract basis for third-party clients. They are the quintessential “guns for hire.”

By using this kind of resource, what first appeared as limits are soon realized as assets. You now have access to the latest development methods, you can pick and choose from the best developers in your price point, and you can build new products and services without adding large overhead to your operation. Renting doesn’t seem like such a bad idea now, does it?

Steal or reuse
We won’t even begin to consider building a case for stealing. It is simply an inappropriate (and illegal) method for addressing your resource shortfalls. Instead, we should consider the concept of reuse.

Two recent books have made a compelling case for reuse as a worthwhile pursuit that can certainly fuel innovation. The case they make is not necessarily to address any shortage of resources; mostly it is to prevent the needless waste of resources by acquiring things for which we will have limited use. The first book is Mesh: Why the future of business is sharing by Lisa Gansky. The second is What’s Mine is Yours: The rise of collaborative consumption by Rachel Botsman and Roo Rogers.

Gansky tackles the value of sharing as a way to supplant rampant consumerist tendencies, many of which fueled the recent global credit binge and subsequent (no so) Great Recession. In her view, “mesh” companies use social media, wireless networks, and the abundance of readily available data from a multitude of sources to create goods and services at the exact moment they are needed—and without needing to own them outright. For Gansky, it’s all about helping your customers buy less but use more. She cites Zipcar, the car share program, and Kickstarter, the artist and design funding network, as two models of the mesh principle at play.

In What’s Mine is Yours, Botsman and Rogers explore the changing face of consumerism (which may have profound consequences for those of us in the innovation space—but more on that another time). The authors see a growing dissatisfaction with people who perceive they are being treated as robotic consumers manipulated and made voracious by marketing. They see the beginning of people turning more and more to models of consumption that “emphasize usefulness over ownership, community over selfishness, and sustainability over novelty.” What drives this new behavior is the enabling technology of the internet and social media in particular to create networks of shared interests, a spin on the communities of practice model in learning organizations, and the establishment of trust in unknown people as a viable currency addition to simplify the logistics of collective use.

In both these books we see the early stages of ways in which we can release ourselves from the limits and restrictions forced on us by resource constraints. Reusing resources in new and meaningful ways after they have already had a useful life in another’s hands creates a remarkable abundance just waiting to be tapped.

Which brings us to the key questions: If resource constraints and scarcity are not the major impediments to innovation that we believe them to be, why do we treat them as such? And why beg, borrow, or steal when bargaining, renting, and reusing can get us just as far (or further) without the associated pain?

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Resource Poverty: cash-strapped bootstrapping your way to innovation success

January 3, 2011 By Leave a Comment

The concept of bootstrapping, to finance your company’s growth with the assistance of or input from others rather than a large capital outlay, has for years primarily referred to startups. Today, with economic pressures continuing unabated (see below), the concept of bootstrapping is being adopted by organizations of all sizes and structures. Resource poverty is the order of the day, and an austerity mindset is being incorporated into all facets of organizational life. The area of innovation is certainly no exception. But things certainly aren’t as dire as the dog’s fate in the old nursery rhyme:

Old Mother Hubbard
Went to the cupboard,
To give the poor dog a bone:
When she came there,
The cupboard was bare,
And so the poor dog had none.
- From “Old Mother Hubbard”

Living in a world of hurt—some features and constraints of resource poor-systems and enterprises.
Characteristics of resource-poor enterprises:
- Meager holdings or access to physical assets
- Little or no capital
- Few market/customer opportunities
- Income strategies are varied and complex
- Complex and diverse systems in fragile environments

Constraints to which resource-poor enterprises are exposed:
- Heterogeneous and erratic environments
- Market failures
- Institutional gaps
- Public good biases
- Low access to land and other resources
- Inappropriate technologies

The challenge is not to conjure the new and improved by plucking elements out of thin air, but to endeavor to use all available resources, especially those previously unconsidered, to produce innovation. The bootstrapper’s mindset is a valid way for business leaders and employees to treat valuable resources at any stage of their business’s growth. Not having many resources also means using what is available in a careful and judicious manner. The measure of successful bootstrapping will be the value created. One of the key traits of this approach is to seemingly turn it on its head and seek ways to frame the current resource situation in terms of abundance.

What does that look like, I hear you ask?

Thinking of abundance
The appetites and passions of man are also modified, making them do and want what is more in conformity with their environing conditions. Each new want limits the field in which old appetites dominated, and the great variety of new impulses soon bring the old under control.
- Simon Patten

One of the earliest advocates for pursuing an attitude of abundance was Simon Patten, a professor of economics at the Wharton School of the University of Pennsylvania at the turn of the 20th century. Patten sought to justify his conviction that men (and at that time he would almost certainly, unfortunately, only have considered men) could create and sustain an age of abundance by developing appropriate restraints. He was an early believer in the enforcement of contract laws that were pro-labor, in the limitation of consumer credit and in restraints on speculation.

Patten insisted that progress was hindered mainly by ignorance and prejudice, which could be overcome by a higher standard of living, by education, and by increased opportunity for everyone. This was landmark thinking in its day and went completely counter to the prevailing attitude that scarcity was enduring. For Patten, the basis of an abundant civilization required, in his view, new strategies and tactics for planning and implementing social change.

By thinking of opportunity and educating towards it, Patten highlighted that there might be new ways of conceiving present scarcity that would help transform it. For an innovator, the challenge of creating something new is often in direct response to what is perceived to be missing: a problem unsolved, or a challenge unmet. Accomplishing that end with limited resources means using every ounce of an available resource. Waste is criminal.

Bootstrap in innovation really begins and ends with your attention to careful management of all your resources. It demands that you remain aware of what you spend and keep your overhead low. If you need to buy premium resources or support, it is necessary to justify the expense either by longevity of use or savings elsewhere. It means bartering for goods and services when appropriate and buying items on promotion, to take advantage of better prices offered for a limited time, that will drive your innovation performance. Too many allow resource scarcity to impede their innovation efforts. The better capable innovators are better prepared, primarily because of the choices they make.

Making better choices
It is our choices that show what we truly are, far more than our abilities.
- J.K. Rowling

One of the greatest challenges innovators face is making choices about how to spend or deploy their limited resources. Often the reason for this is the uncertainty of the data informing those choices. Some of us make the most of the available data by sorting, organizing, and analyzing it, employing a bit of artful extrapolation to fill the gaps, and then make the leap. Others, not necessarily interested in slowing down for anything, being almost shark-like in their need for forward motion, pause only long enough to recoil and then jump. Often directly into hazards.

One such example of the latter instance was the founder of the company Ear Peace, which sells high-end earplugs for people in high audio volume environments for extended periods, such as band leaders or rock concert-goers. Jay Clark is the quintessential bootstrapper. He developed his designer ear plugs for looks, comfort, and sound quality himself. The only problem came when he needed to place his initial orders—that’s when he created an unnecessary financial scarcity:

Over-ordering inventory. This was the biggest mistake. As soon as you get your first run of product, you are already tweaking it and making it better. Bargain and promise the moon on future sales, and keep the inventory low. On the second order (the blister-packed EarPeace for venues), I over did it.

While Jay was able to quickly recover, and now controls his inventory levels much more stringently, he already knew that one of his greatest resource constraints was himself. He couldn’t be everywhere at all times. His course of action was to ask as many smart people for their opinions as he could. He noted that, “The forest quickly gets lost for the trees when you are in the thick of operational, distribution, creative, and financial decision-making.” He saw that there are so many decisions that make it impossible to do everything alone when you are trying to bring an innovation to market. So don’t go it alone if you can help it. Choose to let others help, and strangely enough, they likely will.

The first steps when faced with a resource-poor situation: Consider where you are abundant with resources and choose wisely how to maximize their use. Where do you have hidden assets that you could be exploiting, and how might you choose to use them differently?

Look for upcoming articles on resource creation and resource acquisition to round out your approach to innovation resource management.

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Organization Structures for Innovation – Stop reorganizing deck chairs on the Titanic

November 30, 2010 By Leave a Comment

Every company has two organizational structures: The formal one is written on the charts; the other is the everyday relationship of the men and women in the organization.
- Harold S. Greene

Organization. It’s a noun and a verb. It’s a label applied to any collection of individuals pursuing a perceived common purpose, regardless of how organized they may be. It’s an act designed to bring structure out of chaos and meaning out of confusion. It’s a loaded word. So much rests on the shoulders of organization. This is especially the case when innovation is the desired result of organization’s application.

As its members work together, every group will evolve a structure over time, whether by design or not. Many of the performance deficiencies of a group will often be blamed on individuals, in spite of the fact that performance more often arises from the fitness of the organization structure and its cohesion. By paying attention to the structure of an organization and the roles within it, significant advantages may be created that enable increased group efficiency and effectiveness. Perhaps the most vital lesson for an organization that wishes to become more innovation-capable is that it should create a structure that enables it to flex in response to changing environmental conditions, modifications of tasks, and shifting circumstances.

A challenge arises when we acknowledge that organization design needs to be based on the unique strategy and situation of the organization itself. In the absence of a uniform approach to organizing organizations, what considerations are universal?

We don’t know what we don’t know
If you’re not serving the customer, you’d better be serving someone who is.
- Karl Albrecht

One of the most immediate concerns is that all aspects of the organization should be “fit for purpose.” Each business unit, department, group, team, and function should be aligned to the strategy of the organization and should have, if necessary a sub-strategy that directly supports and addresses the key attributes of the overarching enterprise strategy. That strategy should have as a primary target the customers the organization is designed to serve and a plan of how it will serve them. Without a clearly defined and universally understood strategy, an organization will grow haphazardly, accommodating distractions that come into view rather than focusing on specific goal completion.

Strategically focused organizations become useful backgrounds against which capability gaps and confused or absent roles may be identified in the context of the other enterprise variables necessary for innovation success. This might be knowledge management systems, business processes or even leadership attributes. If a clear strategy is in place, an organization’s leaders should ask some of the following questions to understand whether the organization should be modified or restructured:

  • What’s the nature and degree of innovation-related interaction among a group’s participants?
  • What is the geographic distribution of an innovation group?
  • Given the innovation objectives and limits, where does autonomy reside for the innovation group (internal, external, adjacent)?
  • How is coordination achieved?
  • What is the best structure for the present?
  • How can we best accommodate structure changes in the future?

The answers to these questions may determine clear next steps, which may include asking additional, deeper questions. This self-examination creates the capacity for an organization to create spaces into which sub-strategies, in support of the overarching strategy, can be embedded.

The critical component in this exploration and the eventual decision-making around organization structure is communication. Communication is critical so that the front line is aligned with the bottom line. Without it, not only might chaos ensue but the effectiveness of the structure may be hampered from the outset. Yet this is one factor that many organization leaders fail to consider, or if they do, they pay it only cursory attention—to their eventual dismay.

Moving deck chairs on the Titanic
We believe we will be able to get the airline back during the reorganization process.
- Jerry Murphy

Reorganization is one trigger that’s often pulled, to the least effect. For many organization leaders, reorganization is the one thing they know that they can do and “implement” quickly, giving them both the satisfaction of taking action and the recognition that they are “doing something.” Unfortunately, the hair-trigger reorganization does little to improve an organization’s innovation performance. Instead, many organizations suffer through poorly planned transitions during which the need to “get it done” trumps “well done.”

What these leaders demonstrate are the very worst aspects of impulse control. They desire visible evidence of something (anything) being done, and they want it now. Reorganization is often the first initiative of new leaders, even when it’s not clearly needed. An organization structure should represent a resolution of any number of enduring performance dilemmas, and it should not be tampered with unnecessarily or unthinkingly.

Often in fast-growing or start-up organizations the desire to reorganize arises from the feeling of being out of control. Reorganization may be the most appropriate response in these circumstances. For a larger organization, multiple reorganizations in a short period of time are not only uncalled for, they may be detrimental in the long-term to the organization’s viability. The key is to think through the repercussions before taking action. By asking, “When we do this, what might go wrong?” it may clarify alternatives that won’t require the upheaval (and distraction) that reorganization represents.

Yes, a leader seeking innovation may use a reorganization to challenge comfort zones, but unless they also take time to create organization resilience, they may deliver carnage instead of results. Not pretty.

Impediment or enhancement
It’s about bringing the structured and unstructured information in an organization together, analyzing the information and delivering it to the right people in the organization when they need it.
- Michael Schroeck

Organizations should focus on fostering implementation of plans and projects, delivering increased throughput and maintaining quality. Any organization that creates barriers, or blocks and impedes issue resolution, will kill innovation capability. The whole reason for (the verb) organization is to bring order so that information can flow and materials can be transformed into the services and goods necessary to meet customer needs in the cleanest and simplest manner. For innovation to thrive, an organization must also make accommodations for that information and for those materials to be used in unique and different ways. Rather than confining, it should promote expansive actions.

At its most elemental, an organization structure represents a set of pre-made decisions about where, when, and how to deploy resources to greatest benefit. It should create a supporting performance environment that values and recognizes contributions of its members and keeps them focused on the achievement of the strategic intent. If innovation lies at the heart of your strategy, how you decide to organize can be a firm foundation for your future success. Just remember, a given organization structure may resolve present tensions, but it might not be appropriate for all times. Keep monitoring your organization structure—and when it impedes your ability to innovate, then and only then, you should consider change.

Effective restructuring requires both a microscopic view of typical structural problems as well as an overall, topographical sense of structural options.
- Lee G. Bolman & Terrence E. Deal

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Smart People Sharing – Part 2: Snapshot of BarCampPhilly on November 13, 2010

November 14, 2010 By 1 Comment

First and foremost, the people who volunteer to organize and host unconferences and barcamps are heroes. Their reasons for doing what they do, creating positive environments in which smart, interested people are willing to share what they know, may be legion but the end results are unique experiences that reward and enrich in surprising ways. BarCampPhilly held on a bright shiny autumnal day in the heart of Philadelphia was no exception. A huge debt of thanks to JP Toto, Roz Duffy, Kelani Nichole and Sarah Feidt the four core organizers who managed to pull off this event.

Here are the intrepid gang getting things started – lots of logistics and lots of people to thank, too. Please excuse the quality – the video was taken at the back of the very crowded room.

For those of your who haven’t been to a barcamp, the core concept is that all the content on the day is participant generated and led. Anyone with an idea can share it, they do that by listing their topic with a brief description and their contact information on a card which is then placed on a large board. Everyone else gets to vote on the ideas that seem the most interesting to them by placing stickers (dots usually), and the available presentation spaces are divided up and scheduled according to the relative popularity of each topic. In the case of BarCampPhilly and The University of the Arts facility, if you pitched an idea you were presenting.

The bottom line with barcamp: you throw yourself in – if you’re not learning or finding value in a session you employ the “rule of two feet” and use yours to move to something else. Simple stuff. Everyone owns the value they seek to get out of the experience; personal responsibility rules the day. If you don’t enjoy yourself, it really is your own fault. The great thing is, there was so much interesting stuff in play.

Topics ranged from the commonplace, “How to hire and intern” to the esoteric, “Riot URLs: Gender, Feminism and Tech,” to the whimsical, “Gimme Hugs – it’s my birthday”. All of which sounded very interesting. However, I was on the hunt for learning about innovation and becoming smarter with the support of the fundamentals of by technology infrastructure. So here are some of the presentations I explored with my lovely wife Jo…

Weaving a Regional Mesh For Open Innovation – Joe Raimondo
The primary question driving this session was, “What are the structures that promote or create open innovation within a specific geographical region? In this case the exploration focused on the wider Philly region.”

Participants ranged from students, to technology entrepreneurs, to innovation specialists, to community activists and the quality of openness established was a standard for the kind of participation we experienced throughout the day. The group found that focus is an essential ingredient. What are you trying to accomplish? Without that kind of focus innovation efforts are short-lived and inherently unsatisfying.

Crowdsourcing was seen as an ingredient for open innovation. That said, social capacity was seen to be available but there were questions about how we tap into that. One participant talked about a lack of access to healthy local food in West Philly – the neighborhood responded with a healthy food coop which expanded into tool-sharing and five-six community gardens and community farm space. External ideas were introduced into a relatively stable community which ended raising concerns about the unintended consequences of gentrification.

Another key concern expressed, was that, “If open innovation is the answer what is the question?” Which left the group wrestling with ways to better define the problems we want to address. All in all this was a great way to start on the session front.

Service Design: Blueprint your biz idea – Nathan Gasser
In this session Nathan Gasser was sharing some key learning he received as a result of his participation in World Usability Day and a presentation only two days earlier by Bob Cooper with Frontier Service Design. To get our brains firing Nathan dropped the simple question, “What is service design?” into our laps and we were off to the races!

Service design is
- 70-80% of GDP in the USA
- The necessary ability to create unique experience every time
- Primarily supported by European based thought leadership – it’s not well-considered elsewhere
- An holistic view of all the parts involved in delivering a service

He pointed us to a great site, Service Design Tools with which I was already familiar, but it was good to see someone else’s reason for liking what it has to offer. It offers simple, accessible ways of promoting structured thinking about service design. And it has a dead simple and fun UI, too.

The elements to define services include:
- Service processes
- Points of customer contact
- Evidence of the service from the customer’s POV

A good lesson: walk a mile in the customer’s shoes so that you can see and feel and hear and smell and…live their experience or you will surely die by their experiences.

Things to document when engaged in service design
- Time that a process can take
- Staff / expertise needed in an interaction or process
- Costs, revenues, ROI, waste, etc.
- Customer feedback, ratings, suggestions
- Employee feedback, ratings, suggestions
- 3rd Party feedback, ratings, suggestions
- Competitive analysis

Nathan then led the whole group through an exercise in service design around a brewery tour. No, lunch was not until after the next session, but yes, beer was on all our minds when we left this session.

Missioneering: from idea to mission – Scott Hackman @My_ohi
The last session of the day was with a trio of consultants led by Scott Hackman who focus on helping people unlock their ideas so that they can become a reality. They employed a tool called Theory U for their session and it underpins their collaborative and co-design consulting model. This was a user generated session to activate our ideas and we ended up working on one of the participants ideas to help unlock it’s potential.

The facilitators had been looking at how to get the message about a particular project, or company, or mission “out” and into the world. They saw people struggling to get an idea from their heads into the world. They are looking to build tribes about how to make early ideas into sustainable growing missions. Their approach was newly formed as a concept and sharing it at barcamp was their first public “outing.” Which is one of the other great things about these kinds of events. People can fearlessly test their ideas and receive feedback in a relatively safe manner.

In groups of 3 we each were asked to share an idea that we were passionate about. One of these was then selected by each trio and shared in full group which then dot voted on a whiteboard for the one that seemed most engaging. Ideas included:
• Opening a new office in London
• Social Orienteering using social networks to drive innovations to market faster
• Cars.com for bicycles (the group picked this one)
• Creating a space for open innovation creation of medical devices
• Designing a platform to “kill Facebook”
• Connecting ideas via design translation
• Developing a business development tool for artists (artist entrepreneurs)

Then the facilitators shared the trigger question for the remainder of the session: “If there were no fears what would you be doing today?” Based on that we had a great time sharing stories and ideas, exploring the Car.com model for bicycles and the owner of the idea left with a catalog of things to try and resources to tap. A very cool model that warrants additional exploration.

WordPress Works – Aryon Hose Hon and updatecontent.com
This was a great session for users of WordPress. Aryon was a wealth of knowledge regarding ways to improve site performance, including ways to improve ongoing maintenance, design, hosting and content management. I’ll be exploring many of his links in the coming days and weeks ahead.

Which brings into focus another great realization from barcamp; often people share with each other the very things that make them successful in the business world. They give away best practices, hard-earned shortcuts and tips and highlight personal missteps that they want others to avoid. This spirit of generosity is pervasive. And it is all done in the spirit of a complete absence of selling.

Traffic - Stephen Gill, Leadnomics
The last session we attended had a highly technical focus on ways to manage and drive traffic on websites. Again it was filled with tips and trips. (Did you know that the image of a padlock on your website can improve click-through performance by as much as 50%? Neither did I!) Stephen shared widely and openly about ways to improve website performance. It was a mix of usability design, social psychology and technical expertise, and while the room in which he presented wasn’t very conducive to group discussion there were a lot of gems shared.

All in all, a great day. We can’t wait for the next one and look forward to being able to fully participate in the pre and post barcamp activities which, strangely enough, involved bars.

Finally, big thanks to the sponsors of the day: The University of the Arts, Independents Hall, Microsoft, CapTech, Yahoo Developmer Network, Sumo Heavy Industries, Comcast Interactive Media, Chariot Solutions, DuckDuck Go, Postmark, LessAccounting, CAOS – Technology at Wharton, Stickermule, PopChips, Chaikin Power Tools, A View From My Seat, MIssionStaff, Mashion, Wondergy, MonkoPhoto, Vacoro, PhillyMagic, BigRedTank, Old City Coffee, Food in Jars, South Street Philly Bagels, Inc., Monetate, Leadnomics, Rightaction,and National Mechanics. (Here are links to all the sponsors)

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