do_matic

I heart Jeff Bezos

(Made with the help of iCrushALot) 

Bruce pointed me to this interview with my innovation hero Jeff Bezos in Newsweek's interview issue. Bezos describes three elements of their success:

1. Start with the customer and work backward, learning the skills necessary to serve them as you go
2. Be an inventor, willing to go down unexplored pathways and be pleasantly and cheerfully disappointed in what you find; always think like it's "Day One" [edited by me]
3. Have a long-term orientation

This excerpt is so, so true and it brings home the patience and persistence that it takes to be a repeat innovator:

There are two ways that companies can extend what they're doing. One is they can take an inventory of their skills and competencies, and then they can say, "OK, with this set of skills and competencies, what else can we do?" And that's a very useful technique that all companies should use. But there's a second method, which takes a longer-term orientation. It is to say, rather than ask what are we good at and what else can we do with that skill, you ask, who are our customers? What do they need? And then you say we're going to give that to them regardless of whether we currently have the skills to do so, and we will learn those skills no matter how long it takes. Kindle is a great example of that. It's been on the market for two years, but we worked on it for three years in earnest before that. We talked about it for a year before that. We had to go hire people to build a hardware--engineering team to build the device. We had to acquire new skills. There's a tendency, I think, for executives to think that the right course of action is to stick to the knitting—stick with what you're good at. That may be a generally good rule, but the problem is the world changes out from under you if you're not constantly adding to your skill set.

Learning to think and do small / PB in the FT

I really enjoyed my friend and colleague Paul Bennett's recent piece for the FT:

http://www.ft.com/cms/s/0/a63acc20-f5ac-11de-90ab-00144feab49a.html

Paul's essay triggered a few connections for me.

First, there's how to get big companies to learn to move fast, or perhaps move at all. I've written about it here a bit (Small to learn, Get generative by thinking small) and Colin's "Business in Beta" pattern on IDEO.com does a really great job of capturing this trend.

Here's Paul:

What hit me was the scale of the enterprise and how a small seed of an idea could be world-changing in its impact.

..and...

Personally, I have long believed that not every idea has to be mega, mammoth, gargantuan or a billion dollar disruption. Often, the small, well-designed, intelligent and, most importantly, do-able ideas are infinitely better.

... and the pièce de résistance...

Rather, it sees it as the best way to learn how to get closer to its consumers - in the field through experimentation and prototyping, rather than intellectualising and theorising - and to bring that learning back into its core business and apply it there. It is learning-by doing rather than death-by-discussion.

Second, there's a motivation link to doing and being able to connect to something bigger than yourself, but not so big that you can't see yourself in it. It's super important for innovation. Leaders need to ensure an organization's people stay inspired. Tim Brown talked about it here and I shared some thoughts here (What's your purpose?)

I'm about a third of the way through Dan Pink's new book on motivation. Pink certainly foreshadows early in the book the link between purpose and new corporate forms such as the L3C, Fourth Sector/For Benefit and Yunus' idea of "social businesses."

There's something inspiring and motivating about working for something other the machine trying to make a big, big impact. Chip Heath (along with his brother Dan) describe the importance of connecting to something bigger than ourselves to help make an idea, innovation or story sticky (e.g., the accountant who put a man on the moon). I see folks struggle with this all the time at companies big and small. I suspect that's one reason organizations aren't always flat - motivation and purpose can be found by organizing smaller cohorts amidst the big (e.g., "hot teams").

Paul again:

Employees want to work on things they believe in, in places that support those belief systems. Creating impact outside has huge impact inside.

...and Paul quoting an exec...

"Even the people in Paris who book our travel to Bangladesh feel like they are part of this project..."

I guess the only thing I'd say in response is the importance of commitment. You need to mean it, act like you mean and get people to feel like you mean it. People can smell the bullshit. And if they smell it, they'll wait you out. Seems like Danone is doing it.

Leading Innovation: What great bosses do

(Image and hunger courtesy of Esther17's photostream and Creative Commons.)

Bob asked what great bosses do to encourage innovation. It was an excuse for me to look back and see if I could synthesize some perspectives on that as well. I think many of these ideas and thoughts are very similar to what he communicated, but I think there are some new ones in there too. It's all a bit circular as I'm sure I'm influenced not only by my own experience, but also Bob's and others thinking.

Share Direction, Give Permission, Provide Support. Commit.
http://www.ryanjacoby.com/2009/05/leading-innovation.html

Understand the range of outcomes. Seek the one you want.
http://www.ryanjacoby.com/2009/08/growth-and-innovation-what-are-you-commiting-to.html
http://www.ryanjacoby.com/2009/04/small-to-learn-and-big-to-win.html
http://www.ryanjacoby.com/2009/06/fundamentally-different.html

Give teams an excuse to be wrong.
http://www.ryanjacoby.com/2009/05/seven-chances.html

Focus on feelings as much as actions.
http://www.ryanjacoby.com/2009/05/how-does-it-feel-to-innovate.html

Get out from behind your desk.
http://www.ryanjacoby.com/2009/10/innovation-measure-time-since-last-contact-tlc.html
http://www.ryanjacoby.com/2009/07/innovation-measure-time-to-first-feedback-tff.html

Stretch while paying close attention to where, why and how things snap.
http://www.ryanjacoby.com/2009/10/innovation-elasticity-or-why-things-get-killed.html

Be interested in being wrong.
http://www.ryanjacoby.com/2009/11/innovation-loves-mistakes.html

Have a purpose.
http://www.ryanjacoby.com/2009/06/whats-your-purpose.html

If everyone agrees, go back to the drawing board.
http://www.ryanjacoby.com/2009/05/whats-the-role-of-consensus-in-growth-innovation-and-design.html

Understand how to encourage and channel and develop intuition.
http://www.ryanjacoby.com/2009/09/intuition-innovation-collaboration-and-credibility.html

Don't mitigate risk. Mitigate the cost of failure.

Rita McGrath: Organize for growth and innovation

Rita McGrath has a great post on the HBR blogs on organizing for growth. This quote stood out:

One of the most important jobs a growth group can do is create an opportunity inventory — both of ideas that are floating around in the organization but don't have critical mass, and of ideas that are currently being resourced but perhaps not managed explicitly. Without an organizational home, these critical jobs tend not to get done, hampering the organization's ability to grow.

Check the full article out here:

http://blogs.harvardbusiness.org/hbr/mcgrath/2009/10/create-a-special-unit-to-drive.html

Innovation elasticity (or why things get killed)

(Remember these games?)

At some point during an innovation project you ought to wake up in the middle of the night, eyes wide open, screaming into the void: "We're thinking of doing what?"

Although scary to you and your neighbors, this is a great moment. If you aren't waking up in the middle of the night, you might not be pushing hard enough. The trick is to embrace that fluttering feeling and to understand the situation. If you don't, you risk incrementalizing or even killing some really great ideas.

Usually, the business opportunity or experience is stretching "too far" along one or more six key dimensions of growth:

Users: needs, contexts, behaviors, mindsets, jobs, etc
Offerings: product/service, value proposition, pricing, positioning, channel, etc.
Positioning/GTM: how you go to market
Business Model/Culture: margin model and prioritization scheme
Process & Organization: how you get things done
Scope: the business you're in

Your brand, your management and your investors are the "anchors" that snap you right back to what you know you can do today. Business designers should be working with their teams to design novel approaches and strategies to navigate and maintain the right level of tension, balancing growth, opportunities and risk.

Some companies and organizations are capable of stretching more than others; they have higher innovation elasticity. Similarly, certain organizational and innovation governance strategies, like heavyweight teams, help provide slack in the system.

You shouldn't stretch just for the sake of stretching. Nor is it realistic or strategic to stretch infinitely in any direction. People that suggest as much, while often alluring, usually don't know what it takes to get things done. There ought to be some tension in the system. But understanding how nimble you are along each of these key dimensions can help you systematically foresee and deal with the hurdles over time.

Colin responds: Measuring Innovation

Between Colin's response, prototyping some measures and the rich discussion in the comments, I think we've arrived at a really great answer.

We don't know the one thing we'd measure for innovation.

But I'm glad we tried to answer it.

First, let me say I like Colin's idea of measuring personal experimentation. It's a good innovation measure that would likely lead to improvement.

Experiments require action. Innovation loves action. Experiments are fun. Innovation loves playfulness. Experiments, unlike tests, are designed for learning. Innovation loves learning. Experiment has a nice "tone" to it. Unlike "test," "experiment" takes some of the pressure off of being right and lets you work your way to what's right.

Many small experiments often get there faster than big initiatives or projects. Innovation loves velocity. Colin's measure implies an ongoing process that starts at human scale and also scales to an organization. Innovation loves it when everybody can see themselves in it.

It would be important that such a measure not feel like a quota, otherwise you'd likely not get the variance in experiments - the process learning that's so critical. However, if an organization simply said, "we want you doing a lot more personal experimentation and we're going to tell you the kind we want, let you do it and support you in it" that would probably have a big cultural impact.

From the comments, Gabe's idea of an index says a lot. An index tries to bundle disparate factors into a predictive or explanatory telling of the whole. It's like Prego, it's in there.

In a sense, an outcome measure is an index. I hadn't thought of things like that before. There are myriad factors that lead to an amazing (or terrible) outcome.  The challenge with indices is that they perform at a level of abstraction that is hard to affect as an individual. It's hard to grab hold of and change the Prego. Contrast a broad index with a concrete outcome measure and you'll see what I mean. For example, "we need to improve our 'open innovation score'" vs. "50% of our ideas need to come from the outside."

OK, if we don't know exactly what to measure, yet it's worthwhile, then what?

Simple. Design measures. (Or at least simply stated.)

Innovation measures, just like an innovation strategy, can and should be designed for a company's given situation, culture, brand and people.  When designing innovation measures, I assess organizational readiness, approaches and outcomes of the process itself. Diego and I were tossing this around a couple of years back and described this as being considerate of what happens before, during and after the process or a project.

So, here's a list of some design principles for innovation measures. Innovation measures should:

- Be concrete, otherwise we won't connect to them
- Scale, ideally from human-scale to organization-scale, so we see ourselves in them and can impact larger goals
- Be designed to improve, not to solely prove
- Encourage action, inspiration, intuition and feelings of safety, excitement and joy
- Have an expiration date; what you need to improve will likely change
- Have a bias towards experimentation, breaking things and learning

(Photo courtesy of Leo Reynolds and Creative Commons)

Growth and innovation: what are you commiting to do?

(It's like the pedestrian's creed. From grebo_guru on Flickr.)

Recently, I've been working with companies to design their innovation strategy and to develop a culture of innovation. In related meetings with executive leadership teams, I've been asked to share my opinion on the common pitfalls these companies will face. There are plenty of them, but one stands out recently as a subtle but important challenge.

In a prior post, I described some innovation leadership imperatives:
Share Direction
Give Permission
Provide Support
Commit

The last imperative, handled poorly, can lead to trouble. Leaders and project teams often fail to align themselves and their colleagues around what they are committing to do. Failing to communicate that intention can lead to mismatched investment, timelines and expectations.

For example, "leadership" might be committing to develop new commercial platforms that represent $100s of millions in potential. A pilot team, for the exact same project, might just be trying to learn about a market that's new to them. The team might receive a budget commensurate with a full-bore market blitz, while what they need is a program designed to help them cheaply investigate a new area. They didn't decide whether they should go small to learn, or big to win.*

Ask yourself and your colleagues, what are we committing to do:
to start?
to learn?
to win?
to change?

It might feel like a scary conversation to have, but it's far scarier not to have it.

* I've been digging the WSJ / MIT SMR Business Insight collaboration lately. Here's an article that describes the idea of experimentation at scale.

Innovation Measure: Time to First Feedback (TFF)

(Fractal reverb. Not unlike Infinite Cat. Courtesy of theLaika and Creative Commons.)

All too often, employees, managers and businesses sit on ideas too long. Mulling them over... Perfecting them... Polishing them... Yeah, polishing them. But most businesses don't make money from sitting on ideas. They make money from getting them designed and launched.

Innovation loves velocity, especially thoughtful velocity.

In this context, thoughtful velocity translates into considered experimentation with an earnest desire to discover new facts and to evolve based on what you learn.

With that in mind, I put forth* another innovation measure: Time to First Feedback (TFF)

Time to First Feedback is the time (measured in days) for an idea in the form of a prototype to be presented to a real-live user (RLU) for honest reaction.

There would be levels for TFF, like in the Capability Maturity Model, based on orders of magnitude, like the Richter scale:

Level 0 < 730 days
         1 < 365 days
         2 <  90 days
         3 <    5 days
         4 <   .5 days

What's your organization's TFF Level? What would it take to raise it a level?

Let's scrutinize this for a minute...

Why not time to first prototype? Because I've walked around many a corporation and seen passable prototypes that "just weren't quite ready for sharing yet." You have to prototype something to get feedback anyway. It's like Prego, it's in there.

Isn't time to market what matters? Yes and no. In some organizations, TFF can equal the time to market. If you're living in beta, this is good. If you aren't living in beta, this is bad. That likely means you've missed numerous opportunities to evolve your offering for the better and significantly mitigate your risk.

What about Apple? They don't show anybody anything. You're not Apple.

Does it still make sense to track Time to Market? Absolutely. After all, you're in it to ship. Which made me think...

There's definitely evidence to suggest that you can be too early to market. But, I wonder whether companies that possess ungodly thoughtful velocity can prototype evolve and refine right through until the timing is right?

* Well, elevate actually. Some organizations do indeed track things that are close to this, but as far as I can tell, it is not widely prevalent.

Constraints are inspiring: Buick, Cadillac, Chevrolet, GMC

The quicker than expected reorganization / sorting out / emergence of General Motors has been all over the news last night and this morning. I was struck by how clarifying, for me at least, the commitment to a few brands could be.

Once I saw the list, I stopped the internal argument about whether Buick was old, whether Hummers were evil and whether Saturn was really different.

I just told myself, "OK, if I was working there I know what we're working with. Time to start designing, growing and competing."

I don't know if even more constraint would help, but I do like some constraint paired with the idea of working differently as espoused by Fritz Henderson and coupled with clear goals (be best in class).

Hey Colin: Which is better immediate or reliable?

Colin asked:

In terms of innovation, which is a better input, immediate or reliable? Longer-term inputs are a safer bet, but the longer I wait the more likely it is that someone may eat my lunch.

First, I can totally relate to the onslaught of information you described. Before it was news tickers at the bottom of my screen, but now it’s all manner of content coming at me live through every device. Can’t we relax a bit? Give ourselves a bit more time to ponder and decide?

Likely not. Not when Netflix just showed up, but could be over sooner than its replacement is profitable. Not when you can choose a new, slightly misleading but wildly successful book title in like 12 minutes. Not only do we notice the slipstream more, we need to learn to harness it better.

Back to the question at hand. (I’m just stalling.)

As an innovation decision-maker, I started from the place of basically wanting both. That is, I want to make the immediate more reliable and to make the reliable more immediate.

To do that, you need a powerful way to process information and inputs. For innovation, the question you pose is often just as important as the answer you find. For the time being at least, I believe we still want and need people posing the questions and making the decisions. Sophisticated number crunching can help, but I don’t think such systems pose or answer innovation questions that well. There are experiments out there (see Hunch), but they help when the question is known and ideally univariate.

So, if innovation is in part about bringing new things into the world, this is where I come out:

I want reliable people posing provocative questions and processing more immediate inputs.

"Reliable people" are those that have learned to spot patterns through experience and many cycles of learning. Such people exhibit a relentless curiosity that drives them to learn and challenge their patterns frequently. Ultimately, I want such people working close to the questions and looking to be surprised and contradicted by what they find as quickly as possible.

With such prevalent access to more immediate data, will people become more reliable sooner? Does immediacy make us better calibrated decision-makers (or allow less qualified decision-makers to make better decisions)? This sounds a bit like trying to bring the Gladwell/Surowiecki discussion from several years ago forward.

Maybe when we have tools or other people to help us process it, but as individuals I think it still takes a lot of experience. But that experience, combined with a healthy dose of humility and history, can come more rapidly than ever before.

Price, value, experience and digital media (or "the atoms or the bits")

I was going to pick up this book. Because VSL told me to. I often do what they tell me to do and they haven't let me down yet.



I was looking forward to the prospect of holding it whilst relaxing in a lawn chair in the backyard this summer (ok, somebody else’s backyard, I live here).

Then I was like... well I wonder if it’s available on the Kindle? Lo and behold, I see down there in the lower left that it sure is. Bonus.

That’s cool, I could get it faster. Immediately even. (Even though my Kindle is at home and turned off, when I next turned it on this book would be there "waiting for me" in all its line item glory sooner than I would ever be ready to read it).

Then I was like... I’d probably want to share this one with my wife Steph or my friend Rene. It would make me look smart and I could nerd out about it with somebody. That couldn’t happen with the Kindle though (and Steph would be like 'get out of here with that nonsense, you nerd'). And this book might have pictures that I want to look at (I don’t think so actually, it seems like a collection of essays.)

Then I was like... what’s the price difference (notice the tardiness of this question)?

$0.21

So the inherent difference in the value of this book is $0.21? Says so right up there. (Apparently a pleasant voice is worth another $8.39, but the robot voice on the Kindle is free.)

Well maybe. Price is what you pay and value is what you get. Amazon sets a price, but we say how valuable it is.

As a Prime customer, I’ve already covered the shipping differences quite nicely for them and order more books than I otherwise would if I was to consider the incremental cost of shipping each time I bought a book (brilliant!). I’ve already bought the Kindle. But... let’s ignore sunk costs for a second (MBA kicks in).

Then I was like... Screw that. I’m offended. I want to buy the paper now because I can share it, hold it and it will get here soon enough for my purposes. That is, sooner than I can read it. If I'm paying to destroy trees, then I want the trees. On the margin, the value of the paper is greater for me (or at least I tell myself). Or at least until and if paper goes away. And paper hasn't yet been wrested from my cold dead hands.

But then again, I can’t stick the book on that “library” of mine for when I travel. Who cares? I’ve got enough book inventory to allow me to shelter in place while revolution and reality shows rage around me. They could give me both. They might someday. They're giving me lots of free books right now with some channel price discrimination. That's both a problem and an opportunity they have: two simultaneous models.

Then it occurred to me... Amazon’s got me. I’m a sucker. I love them, but I’m a sucker. Bezos is an innovation hero, but seemingly my arch nemesis as well. (Okay, okay. I'm my worst enemy.) He's found a price and designed an experience that has me considering paying the same price! I'm trapped, but do I want an alternative?

But at this price, is Amazon really going to change the industry and simultaneously maintain control? Perhaps, but I don't think they are destroying enough value yet!

They need to price this book at 50% the cost of the physical book. But then again, those publishers aren’t that interested in doing that right now either... There’s some breakeven for the production side of the value chain that keeps the creators whole (or even better off), while passing on a savings to me the consumer and winning Amazon share of all these little profit bombs.

If you didn’t have to cover the costs of other aspects of your business (publishing print for example, or shipping toasters), what would you charge? What’s the right price to put food on the table of the authors, editors and the rest of that value chain? What could I cut out? How should I deliver the experience for both consumers and creators?

The pricing out there in this world is really, really dynamic. I'm really in need of knowing more of the details of the margin models though. Anybody know?

So, what did I do? Nothing. Can't decide. Frozen.

What's your purpose (inspiration) for innovation?

On his Design Thinking blog, Tim asked one of the central questions that should be answered when designing an innovation strategy. I've been challenging leaders and innovators with it this way:

What's our inspiration for innovation?

For some, it's people-related. For others, it's technology-related. For others, it's money-related. My sister, an accomplished physician and medical researcher, is motivated by the thrill of scientific discovery. I can work with that. My buddy Joe loves to structure a deal and measures it based on the financial outcome. That one is a bit tougher (and has led to some fallout), but ok. My travel agent Janine truly loves serving people and giving them great travel experiences. Bingo. I'm not judging right now, they're just different.

This isn't just some higher-order, transcendental kind of question though. The way Tim posed it is key: what advantage does a purpose give you and what does a lack of purpose say about your ability to do anything new and interesting over the long-haul?

The answer to the purpose / inspiration question has implications for what an organization should be good at and how it should align its processes and strategy as a result. It says something about how an organization should differentiate itself both in the market and back at the ranch. You can be in the exact same industry, yet have a very different purpose and be quite successful. It frees you up to answer the classic Levitt / Marketing Myopia question more fluidly and perhaps span industries.

But the people aspect is what's primal.

Purpose is inspirational and engaging. Inspiration feeds purpose. Inspiration and engagement drives innovation. To sustain innovation, you need to sustain inspiration and engagement. You might get an extra dose of self-motivated passion from some individuals for a period of time, but they often burn out or leave (we call them "innovators", "mavericks" or "insane"). To have it scale, perhaps you have to select for engagement through hiring and engage broadly through purpose?

The answer to the question gets people up in the morning and excited to come to work most days, staying late to accomplish something amazing or taking a risk nobody's taken before. If you could hire your strategy and innovation team based on their fundamental engagement with a purpose, you likely would.

I suspect that one of the reasons mission, values and purpose statements are so distasteful is that they don't align with what really happens in a company. Consistent disappointment isn't going to consistently get people giving their all. So when companies manage out the connections its a long-term killer and when they half-heartedly try to get them back, it's sometimes just as bad.

I led with some examples of personal motivation. I think that an organization's purpose serves as one basis for forming community collective. Some purposes are more suited to community; especially when there are strong cultural norms. Perhaps that's why some innovative organizations are smaller or why some innovation is pursued most passionately and effectively by individuals?

Whew! What a great question. More on the central questions for designing an innovation strategy soon.

Please comment over at Tim's blog.

Feel that? That's your competition passing you

(Thanks to brontedigital. And the dog? Who knows?)

I woke up this morning thinking about risk, innovation, growth, long-term growth gaps and near-term success. I thought about the adage "pigs get slaughtered" and it occurred to me that deer in headlights get run over.

(Thanks T Hall, sorry deer.)

Companies and leaders, the ones that are interested in doing something better, are out there making investments, learning, experimenting and setting themselves up for the next round of growth. I know because I get to work with them.

If you believe there will be a future, then betting on the future makes sense. Now is not only as good a time as ever, it's an even better time. The opportunity costs are lower. The cost of acquiring capabilities are lower. The constraints are inspiring and force you to build and do rather than ponder and strategize.

So as I'm apt to do when I want to feed my insatiable desire for confirming evidence and like-minded perspectives, I went looking for some and saw this. Nice rundown.

Innovation Measure: Innovation Working Dollars (IWD)

There is a concept from marketing measurement and ROI that compares and contrasts working and non-working dollars. The new media folks don't like it too much, but I suspect that has something do with being measured by folks that don't get it. The concept asks the simple question:

Are we spending our money on and close to our customers?

Let's steal it for innovation.

Non-working dollars are those that are spent on planning, thinking about planning, strategy, and measuring (that's ironic), etc. Working dollars are those that have the potential to influence the customer more directly.

For innovation, influence is important, but so is learning and direct experimentation.

Ensuring that most of the work that you're doing has a chance to result in learning or influence is a good idea. More effort should be spent on prototyping, sharing ideas with users, listening to them directly and designing earlier. If you're living in beta, your ratio would be pretty high. Let's say that for every hour of non-influence and non-learning, you should have two hours of influence and learning:

IWD > 2.0

It seems like a "good" measure. It scales; you can apply it to an organization or a project or a day. It promotes the right behavior; measuring IWD will likely result in more of the right things done, faster.

If you compared your working and non-working innovation dollars, what would you find?

(Note: I'm going to start sharing ideas on Innovation Measures. There are lots of things written about what makes a good measure. The writing on innovation measures so far says a lot of stuff like: there are no silver bullets, the right number is about seven, input/outcome/process, etc. I'm going to try to make, steal or adapt some bullets. I'll probably write stuff that others have already conceived. I'm ok with that, but apologize in advance if it's your stuff.)

Creative Commons image from HJEM's Flickr Stream.

What's the value of design now? An equation...

(Take 3 on AA2015 from LGA to MIA. There was someting nice about doing this "analog." It made the links tough though.)

Upon reflection, I'd probably separate O into O (overserved) and D (opportunity for differentiation).

What would you add, change or take away?