Thinking the Unthinkable

The New Leadership Imperative

by Holly G. Green

People ask me all the time what I consider to be the biggest challenge facing today's business leaders.

I don't even hesitate on this one. It's the automatic assumption by most business leaders that we still live in a fairly predictable world.

Think about it. Six months ago, who would have thought that Toyota would be in the position it is today?

Here we have one of the largest, most successful, most respected companies in the world. And now it faces a crisis that is not just destroying its hard-earned reputation, but could well put it out of business.

That's unthinkable! And yet it's happening right before our eyes.

Sales of Toyotas are plummeting. The U.S. government is launching a full-scale investigation into the company's business practices. And a tidal wave of lawsuits around the faulty floor mat/throttle issue is about to be unleashed.

If Toyota is found to be at fault, and if it turns out they had knowledge of the defective design and did nothing about it, punitive damages could run into billions of dollars. Not even Toyota could withstand that kind of a financial hit and still survive.

I'm not saying the unthinkable will happen. But the possibility that Toyota could go out of business in the near term is very real. And that's the kind of world we now live in.

Leading a business in this kind of environment requires a new way of thinking. Considering that most business leaders still view the world as fairly predictable, the question becomes:


How do we train ourselves to think differently?


The answer is simple - pause, think, focus, run.

• Pause. Make it a habit to back away from the day-to-day and evaluate what is happening outside your industry as well as inside.


• Think. Constantly challenge your beliefs and assumptions about what you know to be true about your customers, your markets, your industry and the way you do things inside your organization. Take nothing for granted.


• Focus. Identify opportunities to add value to your customers in ways that nobody else is doing. Identify significant initiatives that support leveraging those opportunities, and get and keep everyone in your organization clear on achieving them.


• Run. Implement quickly, with focus and flexibility, knowing in advance that your new initiatives will not unfold exactly as planned.
  Then repeat this process.

During the think phase, develop the habit of engaging in scenario planning. Ask questions like:


"What would happen if our biggest competitor suddenly went out of business? What is taking place in other industries or other parts of the world that we could use to transform our industry?"


Many companies do this once a year during the strategic planning process. In today's world, that will no longer suffice. When a company as large and seemingly invincible as Toyota can have the rug pulled out from under them so quickly, it's clear the old rules no longer apply.

Pondering the imponderable should become an everyday occurrence in organizations. To be a successful leader today, thinking the unthinkable must become a way of life.


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Holly is the CEO of THE HUMAN FACTOR, Inc. (www.TheHumanFactor.biz) and is a highly sought after and acclaimed speaker, business consultant, and author. Her unique approach to creating strategic agility, helping others go slow to go fast, will change your thinking.

Innovation Perspectives February Wrapup

Innovation Perspectives is our monthly feature to present our loyal readers with different perspectives on a single topic all in one place along with the ability to compare, contrast and discuss them in the comments here on Blogging Innovation and in the Continuous Innovation group on LinkedIn. This month's topic was:


"Who should be responsible (if anyone) for trend-spotting and putting emerging behaviors and needs into context for a business?"

• Thank you to Jeffrey Phillips for submitting this month's topic

Here is a list of all of the authors that participated this month and links to their articles on this topic.

1. Jim Estill - Leader's Role in Trend Spotting


2. Mike Brown - Trendspotters' Fab Five


3. Braden Kelley - Trendspotting Trifecta


4. Rocco Tarasi - All of the Above


5. Jeffrey Phillips - Purpose, Frequency and Responsibility


6. Robert Brands - Shepherding a Team of Opportunists


7. Vyoma Kapur - Trend Spotting Collaboration


8. Adam Schorr - Your Trend Spotting Team

If you would like to suggest a topic for next month's Innovation Perspectives, or would like to contribute, please leave a comment or contact us.

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Braden Kelley is the editor of Blogging Innovation and founder of Business Strategy Innovation, a consultancy focusing on innovation and marketing strategy. Braden is also @innovate on Twitter.

Innovation Perspectives - Purpose, Frequency and Responsibility

This is the fifth of several 'Innovation Perspectives' articles we will publish this week from multiple authors to get different perspectives on 'Who should be responsible (if anyone) for trend-spotting and putting emerging behaviors and needs into context for a business?'. Here is the next perspective in the series:

by Jeffrey Phillips

I've written before about the reactive nature of many businesses. It often seems there are more incentives to ignore signals in the marketplace and then conduct heroic efforts at recovery than to simply plan effectively and study trends and act accordingly. The purpose of today's topic is to examine whether or not trend spotting and scenario planning is important and valuable (hopefully already answered) and if trend spotting and scenario planning are important, what individual or team within your firm should be focused on this work, and how frequently it should be done.

First, let's put to bed the debate (admittedly a thin one) about whether or not your organization should track trends and try to understand likely future scenarios. The answer for most firms is a resounding "yes", especially given the increasing pace of change. In the past you might have been able to argue that change was slow and steady, and an occasional peak in the periscope was all that was necessary. As globalization increases and the pace of change increases, you need to be identifying trends and making sense of those trends consistently, or the disrupters will eat your market share for lunch. Your planning efforts can't assume the future looks a lot like the present, and also must look further out in time. You need to look further out in time because even though the demand cycle has sped up, many firms haven't improved their product or service development cycle, so if you only look a year or two into the future, but it takes 18 months to two years to get an idea through the pipeline, you are shooting behind the curve.

OK, let's assume for the sake of argument that you agree that trend spotting and scenario planning are valuable. Then the question becomes - who should spot and capture trends, who should develop scenarios and who should interpret the results? These questions need to be answered on two levels: at the corporate or business unit level, and at the product or service level.

Trend spotting should be underway, all the time, as a consistent activity by a wide range of people within your organization. Those trends should be reported to a central analyst (individual or team) who is capturing, recording and tracking trends. This model works at both the product/business unit level and at the corporate level. We at OVO emphasize this work at the corporate level, because work at a product or business unit level can too easily be focused too narrowly on a specific product or market or geography, and miss trends or disruptions from other sources. We'd rather see a number of people recognizing and reporting trends throughout the organization, centralized in some team at the corporate level, who capture, report and synthesize the trends, typically in four or five categories (demographic, technological, economic, governmental). One central repository of these trends reduces the "my trends are more accurate than yours" debates and should ensure a more all encompassing view of trends. Of course everything I've described can be replicated in a business unit or product line, with the awareness that these are often more narrowly tailored.

If we centralize this skill, what kinds of people are necessary to capture, analyze, report and synthesize trends? Anyone in the organization who reads, or interacts with customers or business partners, or who has an interest in what's happening or unfolding can capture and register trends. We've set up several systems like this where anyone can report trends. Additionally, the central team can also track and register trends. As trends are recorded and categorized, we can also begin to identify which are important and relevant for the business, and request more insight or investigation into some trends over others. As this is an ongoing activity, over time it becomes evident that some "trends" fade away while some are enforced. Periodically (we recommend twice a year) a team comes together to select trends and build scenarios about a 5 to 7 year distant future.

We tend to pick 5 to 7 year futures because in many firms the selection and implementation of a new idea and the rollout of a new product can take several years, so we want to get the product to market slight early rather than slightly late. With the pace of change as is currently experienced, trying to understand more than seven years into the future is really a crap shoot. Using a horizon less than three years is really not effective, as most concepts will be incremental.

Who should develop the scenarios? We believe these should be guided or facilitated by people who don't necessarily have a vested interest in the outcome. A scenario guided by a product manager is likely to reinforce his or her biases, since they have a stake in the outcome. Again a central innovation team acting as facilitators with a representatives from a product unit or business unit can mix the best of both worlds and ensure a relatively unbiased examination of several potential future outcomes.

Note that through all of this discussion we assume that this function exists as a continuous offering over time, not a discrete, start-stop program but a team that builds insights and skills and offers them to executives within the business. If you want the inexpensive, low hanging fruit of innovation, here it is. No where else can you get a great understanding of the near future and your opportunities and challenges for less cost. The only requirement after the scenario plan will be your ability to take action.


You can check out all of the 'Innovation Perspectives' articles from the different contributing authors on 'Who should be responsible (if anyone) for trend-spotting and putting emerging behaviors and needs into context for a business?' by clicking the link in this sentence.

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Jeffrey Phillips is a senior leader at OVO Innovation. OVO works with large distributed organizations to build innovation teams, processes and capabilities. Jeffrey is the author of "Make us more Innovative", and innovateonpurpose.blogspot.com.

Innovation Perspectives - Trendspotting Trifecta

This is the third of several 'Innovation Perspectives' articles we will publish this week from multiple authors to get different perspectives on 'Who should be responsible (if anyone) for trend-spotting and putting emerging behaviors and needs into context for a business?'. Here is the next perspective in the series:

by Braden Kelley

I believe this question should really be broken up because there are three VERY different (and incredibly important) pursuits intermingled here:

1. Trend spotting
   
2. Putting emerging behaviors into context for a business
   
3. Putting emerging needs into context for a business

Only at the very beginning of a business, when it is all or nothing for a small team of founders, should responsibility for these three tasks be combined. The reason responsibility for these three different pursuits should be split up is because each requires a different way of thinking, that often requires different types of people to generate the most relevant and actionable insights.

As I've written before, insights and execution are the real keys to business success, and in building any successful innovation - the insights come first. So, combining these three pursuits properly and getting the insights correct is incredibly important - otherwise you'll design, build, and distribute a solution that misses the mark with customers.

Trend spotting requires big picture thinking, a talent for separating the notable from the unimportant, the ability to see how potential trends connect together, and the vision to see the impact of this trend intersection (what megatrends might they point to, etc.).

Putting emerging behaviors into context for a business requires an incredible capacity for insightful observation, the ability to spot influential thinkers who are good at identifying and describing changing behaviors, and the skills to synthesize a collection of perspectives into a cohesive view of the future. This view of the future must of course have a strong chance of being correct.

Putting emerging needs into context for a business is incredibly difficult and requires understanding how emerging trends and behaviors will intersect with new technologies and other business capabilities to expose new customer needs. Those new needs then represent potential growth areas for businesses to enter with new solutions. The goal of course is to identify and act upon these emerging needs before the competition has the opportunity to observe these needs as expressed behaviors and actions and react.

The one skill that all three share in common however, is the ability to disconnect one's own perspective from the changing perspectives of others. Whether you as an organization choose to hire people into these roles, hire in consultants to provide this insight, or to spread the responsibilities around the organization, you must have a strategy.

Personally, I believe organizations may soon begin creating insight networks within their organizations in the same way that they currently do with innovation. This means having a central insights team at Corporate HQ with strong executive support that is responsible for managing the process, the distributed global network, its training/certification, and its outputs. This does not have to mean starting a new team - companies could incorporate these responsibilities within an existing dedicated-innovation infrastructure. So, can an insight management software industry be far behind?

And last but not least you will need to assign people to monitor trends and emerging behaviors and needs from Six Ways to Sunday:

1. Demographic and Psychographic Changes
   
2. Legal and Political Changes
   
3. Different Geographies
   
4. Different Industries
   
5. New Supplier and Technology Capabilities
   
6. New Business Capabilities and Business Models

Do you have a strategy and responsibilities in place for spotting trends and emerging needs/behaviors in your organization?

What are you waiting for?


You can check out all of the 'Innovation Perspectives' articles from the different contributing authors on 'Who should be responsible (if anyone) for trend-spotting and putting emerging behaviors and needs into context for a business?' by clicking the link in this sentence.

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Braden Kelley is the editor of Blogging Innovation and founder of Business Strategy Innovation, a consultancy focusing on innovation and marketing strategy. Braden is also @innovate on Twitter.

Innovation Perspectives - Trendspotters' Fab Five

This is the second of several 'Innovation Perspectives' articles we will publish this week from multiple authors to get different perspectives on 'Who should be responsible (if anyone) for trend-spotting and putting emerging behaviors and needs into context for a business?'. Here is the next perspective in the series:

by Mike Brown

Who should be deciphering the future and helping shape how a business understands and prepares for it?

The first inclination might be to think about a specific part of an organization for the function. It's important though to identify the individuals well-suited to this challenging role. From that perspective, five capabilities are vital to successfully champion this effort:

1. Having a Natural External Perspective


• Creating solid insights about the future depends on starting with a view outside, not inside the business. It's a natural orientation that not all people share. Someone in a trend-interpreting role has to be a sponge for gathering, processing, and extrapolating information on markets, customers, competitors, and a broad set of inputs on the economy, demographics, and other environmental factors.


2. Being an Integrator


• Being able to do something with a broad set of future-looking inputs requires someone with a solid perspective on the business and what drives its success. This has to be coupled with the ability to understand how other industries and markets affect the business today and imagine how they might in the future. Finally, it demands a strong command of frameworks to integrate meaningful interpretation of broad, and typically incomplete, forward-oriented data sets.


3. Possessing Both Left and Right-brained Orientations


• Ideally solid quantitative metrics (i.e., demographics, demand forecasting, industry sizing trends) are available to help form relevant predictions. Often though, numeric information isn't available. In any case, analysis has to be coupled with creating compelling stories to drive strategic actions anticipating and preparing for the future. "Whole brain thinkers" are essential, since they provide left-brain quantitative and analytical skills coupled with creative, communications-oriented right-brain perspectives to help make on-target, forward-looking action happen.


4. Displaying Strong Intuition


• There's no single clear picture of what the future holds. Creating credible future scenarios requires tremendous amounts of interpretation and extrapolation. Some of this can be learned; much of it can't. Trend watchers and prognosticators need to be able to instinctively "know" what all the information they're seeing means. If it's a broad intuitive sense, that's fantastic. Even if it's industry-specific, that can be fine too. I used to work with an economist who had been in transportation for many years and had tremendous instincts for our market. I'm not sure he could have been dropped into another industry and had the same feel, but for our market, he could look at a competitor's quarterly numbers and tell you exactly what was and would be happening in its logistics operation with high certainty.


5. Building Powerful Relationships and Networks


• It's quite a list to this point, isn't it? It's challenging for one person to excel at all of these skills. As a result, the fifth essential capability is to be an outstanding relationship builder. This includes the ability to recognize the talents necessary in others who can help shape a view of the future along with the interpersonal skills to cultivate and share value throughout the network of experts that's needed.

There are certainly other skills and capabilities which make for a strong trend watcher and interpreter. But if you can find someone in your business solidly embodying these skills, don't wait for a clearer view of the future. Get them into the job right now!


You can check out all of the 'Innovation Perspectives' articles from the different contributing authors on 'Who should be responsible (if anyone) for trend-spotting and putting emerging behaviors and needs into context for a business?' by clicking the link in this sentence.

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Mike Brown is an award-winning innovator in strategy, communications, and experience marketing. He authors the Brainzooming TM blog, and serves as the company's chief Catalyst. He wrote the ebook "Taking the NO Out of InNOvation" and is a frequent keynote presenter.

Cisco Announces $250,000 iPrize Competition v2.0

by Braden Kelley

Cisco has announced its second Cisco iPrize Competition. At stake is a $250,000 Grand Prize that will be awarded after eight selected finalists have the opportunity to present their innovation idea to Cisco's selection commitee using Cisco Telepresence.

The first Cisco iPrize was awarded to an idea focused on reducing the energy consumption in the electrical grid. This idea is currently undergoing development in Cisco. But the winners are back at it again and have entered an idea in Cisco iPrize v2.0.

I had the opportunity to do a video interview with Sharon Wong, Director of Business Development in Cisco's Emerging Technology Group about the competition:

Interview with Sharon Wong about Cisco iPrize from Braden Kelley on Vimeo.

In this open, global competition entrepreneurs submit proposals and collaborate to create the seed idea for Cisco's next billion-dollar business.

You have until April 30, 2010 to submit your idea. Idea submissions should fall in one of four categories:

1. The Future of Work: New solutions that accelerate and change the way we do business


2. The Connected Life: Technological inspirations that dramatically improve living conditions and disseminate culture


3. New Ways to Learn: Next-generation solutions that transform when, where, and how people learn.


4. The Future of Entertainment: New solutions that change how people play together

Below on the left you'll find a video of Marthin De Beer announcing the Cisco iPrize Competition and on the right you can watch Guido Jouret speak about some of Cisco's views on what makes a big idea:



You can submit an idea by yourself or you can work together as a team. Once ideas are submitted, iPrize community members can vote for the best ideas, and otherwise engage with the community of people who have submitted ideas. For complete rules and other information, please check out the Cisco iPrize Questions and Answers.


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Braden Kelley is the editor of Blogging Innovation and founder of Business Strategy Innovation, a consultancy focusing on innovation and marketing strategy. Braden is also @innovate on Twitter.

Who Killed Our Business?

by Paul Sloane

Most business managers go through the annual ritual of budgeting. We plan the next one or two years based on the actual results of the most recent year. We draw up a spreadsheet and plan line by line - sales revenues up 10% and costs held to a 5% increase means a modest improvement in profits.

We should have learned by now that this is a sterile process. The past is a poor guide to the future and its innovations. In 1972 the Club of Rome published "The Limits to Growth." It was a model that predicted what would happen to energy, food, population, environment, etc. It concluded that essential resources like oil would run out in the 1990s and that economic growth was unsustainable. It extrapolated the future based on the past. And it got it wrong precisely because the future is not like the past.


Blocking out innovative ideas

The planning straitjacket means that we are restricted to small incremental increases in revenues and we are squeezed on expenses. There is no scope for the radical improvements that the business so desperately needs. By thinking in terms of last year plus 10% we are blocking out big ideas. The motor car was not the horse-drawn carriage plus 10%, Amazon was not Barnes and Noble plus 10%, and the Smart Car is not your average sedan with an extra 10%. Each was a leap, an innovation, a different approach.

Nokia started as a wood pulp mill in Finland in 1865. It made paper products, rubber products and became an energy company before moving into consumer electronics and becoming the world leader in mobile phones. Virgin was founded by Richard Branson as a record label. It now offers a range of products in travel, entertainment, finance and communications. These successful companies did not get where they are today by modest incremental steps, but by combining efficiency with bold ventures into new arenas.


Who killed our business?

I use an exercise in my creative leadership workshops to shake people out of incremental thinking and planning. The team imagines that they are sitting in the room six years from now asking the question, "Who killed our business?" The premise is that some powerful force has put their company out of business. Individually and in teams they have to conceive of changes in technology, processes, fashion, competition or demographics that might completely replace their current business model.

There are many examples of how the unexpected has devastated businesses. Typewriter manufacturer Smith Corona was wiped out by word processing software on PCs. Polaroid was sideswiped by digital camera technology. MacDonalds has fallen victim to the rise of anti-corporatism and the power of the book, "No Logo." Downloading music on the Internet is hurting music companies. A loss of reputation demolished Arthur Anderson. Accounting scandals killed Enron and Parmalat. Laser eye surgery is a threat to makers of spectacles and contact lenses.

Starting with a blank piece of paper, people have to imagine a major new trend or approach which would eliminate them and at the same time meet the needs of their customers better. Once they have agreed on some possible scenarios they need to design ideal companies to exploit the new approaches. Instead of starting from today and planning forward, they start from the future and plan for the future.

You can aid the process by first discussing fashion trends, technology developments and demographic movements. The purpose is to startle people out of a complacent and comfortable view of the future and to consider instead a vortex of dangers and opportunities.

Spreadsheets are great tools for recording figures and for trying different assumptions in an existing model. But among all the many menu bars and commands in Excel there is no instruction for "use your imagination" or "conceive entirely new possibility." Try getting your team together and brainstorm some radical ideas. Develop scenarios that are imaginative but possible. Build some prototypes to test new products or business methods. Test them in the marketplace. An experiment will teach you far more than any spreadsheet. It is by systematically testing boundaries and pushing into new areas that companies like Nokia and Virgin succeed.


Conclusion

Of course every business needs a budget as a yardstick to measure against. But the budget is not a strategy for success or even for survival. Leadership means taking the business from where it is today to somewhere new and different. It means using imagination and innovation to design a better tomorrow.


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Paul Sloane writes, speaks and leads workshops on creativity, innovation and leadership. He is the author of The Innovative Leader published by Kogan-Page.

Realistic Impossibilities

by Kathy Robison

Being on the wrong end of the continuum between realistic and impossible is what plagues many of today's large multi-national corporations. The fear of failure by employees who are only partially engaged and don't entirely feel like valued members of the team, will always translate into goals and ideas that are mediocre and achievable and never ones that are innovative or impossible. In the 21st century, which is fraught with global economic adjustments, global-interdependence, developed world saturation, and a consumer base that is rapidly changing, creating the impossible is the only way to break away from the competition, ensure success and create a meaningful impact on the world.

Unfortunately most large companies live in the land of the realistic. It has permeated their business model, their culture, and the expectations of their customers. Many of these companies are starting to realize that creativity, thinking differently, and innovation are the keys to success in the future, but they feel stuck in how to achieve such goals. Hopefully some will view them as impossible and find the courage to achieve them anyway. You see, if you want to create a culture that reaches for the impossible, despite the odds, it must begin at the top and it often begins with an updated and innovative business model.

Designing an innovative and exciting business model with impossible goals is often a much easier and less expensive way to creating a culture of creativity and innovation that trying to dictate it. Processes, procedures, and changes in organizational structure can be dictated; innovation and creative thinking must be experienced and nurtured. The act of dictating, making rules, and imposing your will on others are the very things that have turned off our creativity, thinking, and innovative traits in the past. It was OK in the last century where the goals were to build, duplicate, and be efficient. The difference now is that we are moving from a world of industrialization and knowledge to one of conceptualization and connection.

Yes, there will be impediments and unforeseen circumstances that get in the way of creating the impossible, but they must be viewed as learning and growth opportunities. And, yes, there is always the possibility of failure, but failure is not altogether a bad thing. We must learn to accept failure as a part of the process of success. Unfortunately, many corporate cultures are so anti-failure that they no longer reach for anything exciting, tantalizing, or remotely interesting, which are the very things that improve productivity, reduce turnover, attract talent and create cultures that regularly innovate.

The disillusionment with big business and the realization that job security was really an illusion anyway is the fuel for new competition that will come charging out of the gates with all of these new attributes in tact. During the next 50 years, we will see some of the biggest companies in the world come crumbling down as well as the birth of some of the greatest companies in the world. It will be an interesting game to watch and fascinating to see the rules of play take a completely new direction. Here are a few of my favorite new perspective one-liners to start 2010:

• Do as Wayne Gretzky and "Skate to where the puck will be"


• Have the capacity to collaborate with the most unlikely of players


• Create something larger than the products you sell


• Lead with the tenacity of an underdog

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Kathy Robison is the CEO of YURU, (The Guru Is You), dedicated to assisting businesses to realize the full potential of their success through innovative business strategies, executive coaching and leadership development.

Do you have an innovation blind-spot?

by Mike Myatt

My experience with most executives and entrepreneurs is that they are totally committed to and focused on success. As a result, many of them tend to have a major blind-spot (translation: weakness) when it comes to the anticipation of set-backs. While this is understandable, it is nonetheless naive, and it constitutes a major flaw in the business logic of most strategic plans. This is so much the case that the most often overlooked aspect of strategic planning is adequately addressing contingencies as part of the planning process. As you get ready to usher in 2010, my suggestion is to take one final look back at your planning and assure that you've anticipated all the ways in which things can go wrong, and what you'll do when the inevitable happens...

The reality surrounding the success of any implementation is found by understanding that no matter how smart you are, things rarely go as planned. Those that plan in advance for changes in circumstances can adroitly address issues when they occur, while those who must deal with "unforeseen" circumstances don't tend to fare as well. Smart leaders view obstacles as a constant rather than a variable, and incorporate that thinking into their planning. Any well crafted strategy anticipates obstacles and factors in multiple "what if" scenarios. Leaders that wait until a problem occurs to deal with it place themselves and their organization at a huge strategic disadvantage.

The two most common outcomes created by a lack of contingency planning are: 1.) watching things grind to a halt as you scramble to evaluate options, and; 2.) having fewer options to assess based upon the new found time constraint. Speed is your friend and should be leveraged to your advantage. Speed is aided by anticipation and slowed by a lack thereof. Smart leaders will do everything in their power to keep a decreae in velocity from becoming a self imposed adversary due to a lack of contingency planning.

It is important to remember that contingency planning is a key to avoiding costly mistakes. In most cases your wins won't put you out of business, but your losses most certainly can. The three most critical items to focus on when conducting your planning are:

1. Insure that personal accountability is present on any major benchmark, milestone or deliverable.


2. Make sure that someone has identified the 5 worst things that could happen with any initiative, what steps can be taken to prevent their occurrence, and what measures will be taken to overcome them if they happen?


3. Make sure that advance warning signs for potential failures are identified and understood so that you have plenty of runway in front of you to implement your contingency plans.

Good luck and good planning.

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Mike Myatt, is a Top CEO Coach, author of "Leadership Matters...The CEO Survival Manual", and Managing Director of N2Growth.

2010 - Year of the Man Purse

by Braden Kelley

I've been trying to decide whether to make any 2010 predictions, and I never thought that this would end up being the one that I chose, but here goes:

2010 will be the year of the man purse - thanks to the proliferation of netbooks, e-readers, and a new generation of tablets launching this year from Apple, Plastic Logic, Google, and others.

It probably won't happen in the first half of the year, but by the time back-to-school and christmas roll around, man purses will finally start to catch on.

Some people will call it a satchel to make themselves feel more manly, and others will see no shame in calling it a man purse, but the fact remains that people will want a way to keep close at hand the gadgets that they are beginning to see as an extension of themselves.

Way back in 2006 celebrities including Robert Downey Jr., David Beckham, and Cuba Gooding Jr. were using man purses, but they didn't cross the chasm because there wasn't enough value created for the average joe. But now, don't be surprised if by the end of 2010 you see more celebrities like possibly Shaquille O'Neil, LeBron James, or Chad OchoCinco sporting a man purse to help carry the gadgets they choose to use to connect with their fans.

For my money, the biggest unknown is not whether man purses catch on, but which devices will be their main residents. Which devices will earn the right to be worn?

Apple is not going to have this market to themselves, no matter how cool their tablet might be.

So, what kind of device will Google come up with?

Can Amazon counter with something to keep the Kindle relevant?

What do you think?

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Braden Kelley is the editor of Blogging Innovation and founder of Business Strategy Innovation, a consultancy focusing on innovation and marketing strategy. Braden is also @innovate on Twitter.

Electronic Readers Hit the Big Time

Amazon Kindle, Sony Reader, Barnes & Noble Nook

by Kevin Roberts

Fear of new technology is not new. In 1982, the king of all Hollywood lobbyists, Jack Valenti, told the US Congress:


"I say to you that the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone."


Hysteria aside, the movie industry was utterly convinced that the advent of video cassettes would destroy the film industry. 30 years on, video and DVD have had the opposite effect - far from undermining the industry, they are integral to its ongoing profitability. How could Hollywood keep producing so many films, at such great cost and such variable quality without the "straight to DVD" option? Even the notorious box-office bomb, Waterworld, almost broke even in the end, thanks to DVD sales.

There has been similar angst about the fate of books and the publishing industry since the arrival of the Internet and new technology like e-readers. In 2007, the US National Endowment for the Arts reported a "remarkable decline" of American reading habits, its chairman saying that it would damage the civic, political and economic fabric of the country. The New Yorker chimed in, quoting sociologists who claimed that "reading for pleasure will one day be the province of a special 'reading class', much as it was before the arrival of mass literacy." The Boston strangler strikes again!

E-readers are all the rage this holiday season. Industry experts forecast that Amazon will sell 900,000 Kindles in the last two months of 2009. The Sony Reader and Barnes & Noble Nook, which sold-out before it even hit the shelves, are also on a tear. There was a lot of skepticism about e-readers in the first couple of years, and a lot of doomsayers who thought they spelled the end of the written word.

The truth is that technology has ended the monopoly of bound, mass-produced manuscripts we call books, and expanded choice for readers. We can read on the computer screen, on dedicated e-readers like Kindle and Nook or on our cell-phones.

We love books for the stories and the emotional power, the insights and inspirations. Who ever puts down a great book and says, "Wow, I loved the paper-stock, and the font was awesome!"

People who love reading will read more than ever before - I know I do.

Circumstances, mood and moment will determine how and what we read - the Kindle is great for plane trips or train-rides; the cell-phone works well for a quick catch-up with emails or news, and nothing (for me, at least) will beat the pleasures of a book on a beach, or a bookshop on a rainy afternoon.


Editor's note: Will Apple go after the e-reading market with the rumored Apple tablet?

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Kevin Roberts is the CEO worldwide of The Lovemarks Company, Saatchi & Saatchi. For more information on Kevin, please go to www.saatchikevin.com. To see this blog at its original source, please go to www.krconnect.blogspot.com.

Killer Small Business Social CRM

by Hutch Carpenter

Parker Smith wrote a piece that got me thinking. In Foursquare: Democratizing the Loyalty Program, he posits that Foursquare could be the loyalty program provider to small businesses. I think he's right.

Then I noticed these identical product benefits touted by the companies themselves, Foursquare and Jack Dorsey's Square:


"For example, foursquare can tell you how many times a customer has been to your venue or the frequency of their visits. Many venues are now using this data to reward their most loyal customers with freebies or discounts." - Foursquare

"If you frequent a place that accepts Square, we'll let them know you're a repeat customer. That 10th cappuccino may be on the house, no paper coffee card required." - Square


Would you look at that? Are these guys going to end up competing with one another?

A few years back, I was the personalized marketing product manager at Pay By Touch, which offered the ability to pay for items with biometrics (i.e. your finger). Once you could identify the customer and her spending, interesting loyalty program solutions became available.

Which brings me to what Foursquare and Square are doing. Square is still in beta mode, so it's hard to predict fully its uptake in the market. But let's assume Twitter co-founder Jack Dorsey and his backer, Khosla Ventures, are on top of this opportunity. And Foursquare is growing quickly.

Each provides pieces of what would be needed for a small business CRM. The companies are independent, but I can see new value created if they were to work together.


There is no CRM for offline small businesses

At least, not for businesses that operate in the physical world. Dry cleaners, restaurateurs, retailers and other small businesses. They may have loyalty punch cards, but generally don't have any programmatic way to track and engage customers.

But they could use CRM as much as a large business does. I like this customer lifecycle framework by Gary Hawkins in Customer Intelligence:



It shows the stages of a business's customers: new, existing, declining, lapsing. And the ability to tier active customers also is valuable. Each tier has its own dynamics. There is much more to CRM than a simple frequency loyalty program. It's a deeper level understanding of the customer base. Understanding the statuses of customers from this point of view is powerful marketing information.

Modern CRM is more than the analytics and outbound campaigns. The social CRM movement is gaining strength, and it's incorporating many social network principles into the customer engagement process.

And it's not readily available for small businesses that operate primarily in the "offline" world. Unlike the digital platforms of e-commerce, offline transactions are not measured. At least not beyond the credit card transaction for consumer transactions.

This is an area of enormous opportunity. The company that solves the CRM issue for the 4.3 million small businesses in the U.S. has an enormous opportunity in front of it.


Complementary CRM strengths of Foursquare and Square

The two services each bring unique strengths to a small business CRM solution. Take a look:


Start with the commonality Diagram. Foursquare and Square both provide:

• Customer identity = who are your customers?


• Visit frequency = Foursquare check-ins, or Square credit card swipes

When you see them both tout free products for repeat customers, this is how they’d do it. Identity + frequency = loyalty punch card.

But what about the services' other features?


Foursquare provides the social fuel:

• Social incentives: It's fun to build up points relative to your friends, show off your Foursquare badges. And who doesn't want to be Mayor of some local business?


• Social interactions: People use Foursquare to to broadcast their location. This lets other meet up with them. Or in the case of crowded venues, find someone else there.


• Game dynamics: This reporting in on your locations is an addictive game for many. It's cool to get your first check-in daily bonus, to unlock a new location (hooray!) and oust someone as the Mayor of a place.


• Social media word of mouth: By following people on Foursquare or Twitter, you can see where your network hangs out. This raise awareness for businesses, an incredibly important benefit.

Here's an example on that last point. Socialtext CEO Eugene Lee often tweets this:


"I'm at Coupa Cafe (538 Ramona St, at University Ave, Palo Alto). http://4sq.com/IITeJ"


I don't spend much time in Palo Alto, and I'd never heard of Coupa Cafe. But you know what? If I find myself in Palo Alto needing lunch or a coffee, guess which place I'd specifically look for?

Square provides the transaction processing power:

• Dollar spend: Incredibly valuable information to track. Does someone come in a couple times a week, but spend heavily on food? Or do they frequent the cafe more often, but only buy coffee? Dollars spent is an important complement to simple visit frequency.


• In-the-flow process: Square captures its information in-the-flow. That is, you don't have to do anything extra. You're have to pay, it's part of the normal process. Foursquare requires a check-in, which is outside-the-flow of regular small business-customer interactions.


• Transaction handling: By owning the transaction handling, Square can implement low-maintenance marketing programs. Businesses can create promotions tied to specific accounts, and execute them at the point-of-sale via Square.


• Merchant account process: The process of getting businesses signed up for these programs isn't trivial. It is standardized, but there's a lot to tackle to provide good service. Some early reports indicate that Square has a superior merchant account set-up process, which may be its best innovation.

The in-the-flow nature of Square should not be underestimated. Getting adoption for any service is tough, and removing whatever friction to participation that exists is a critical element. This commenter on a post about Foursquare makes a good point:


"The sort of people who will stop and record their restaurant visits and who have friends who also stop and record their restaurant visits and then write reviews of same. And while that's a prime demographic, I'm thinking it's not nearly as large as you'd hope. Most people just don't have the time or inclination to 'play' FourSquare."


This is why putting the process of playing Foursquare in-the-flow would be valuable.


Making it happen

The challenge is in connecting a credit card transaction to a person's Foursquare account. Then I realized Square's intentions are much bigger than a simple transaction swipe. The company lets people set up their personal accounts on Square. I assume you will enter your credit card number online, and when that number comes through in a transaction, it's associated to your Square account. Thus Square can manage loyalty punch card programs.

Well, why not associate your Foursquare account to your Square account? When you swipe your credit card at the local business, Square processes the transaction the way it normally does. But it also does something else. It prompts an update to your Foursquare account.

I'm not talking a Blippy-style broadcast of your credit card purchase amount. Rather, your location status is updated automatically on Foursquare. Just as if you'd updated from your iPhone.

The small business then gets the social part of the CRM program.

What do you think? Two great tastes that taste great together? Small business could use the combined elements of Foursquare and Square.

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Hutch Carpenter is the Vice President of Product at Spigit. Spigit integrates social collaboration tools into a SaaS enterprise idea management platform used by global Fortune 2000 firms to drive innovation.

Innovating into the Future

by Jeffrey Phillips

There's an interesting and difficult conundrum associated with innovation based on the calendars and timeframes of most organizations. While many organizations want innovation, they are not able to innovate beyond their "headlights", which to me means the span of time into the future they are willing to investigate.

Most businesses operate in approximately three timeframes: the quarter, the annual plan, and timeframes beyond one year out. These timeframes are dictated by the financial markets, not by any specific ebb and flow of business, and these time frames don't align to or account for the interworkings of the organizations. The first timeframe, 90 days, is dictated especially to publicly traded firms. However, any firm of any size will frankly tell you that little can be changed in a quarter. The next time frame is the fiscal year, which is dictated again by the financial community.

Note that neither of these timeframes has anything to do with the internal workings or operations of the business, especially when it comes to innovation. If we are honest with ourselves, we'll be willing to admit there are at least three phases of innovation and new product development: idea generation and selection, new product development and commercialization and launch. In most organizations new product development and commercialization will rarely take less than 18 months to two years. Adding in the timeframe to identify opportunities and generate ideas, it's easy to see that an idea generated today in most firms won't be commercialized in less than 2 to 2.5 years.

This is where the concept of innovating beyond the headlights comes into play. If we have an idea to product or service lifecycle of 2 to 2.5 years, then we need a planning cycle and an investigation cycle of at least that length, if not more. If the business is not identifying opportunities 3 to 5 years in the future and has a idea to product lifecycle of 2 to 2.5 years, then it's almost impossible for the firm to ever create a truly disruptive product, since it's development time is longer than its runway. It's not as if we compete in a market that has no other insightful, aggressive competitors and new entrants. Consumers aren't simply going to wait for your firm to unveil products and services that have already been launched by competitors.

No, innovators need to identify opportunities that are further into the future, and that will cause consternation by many of the individuals tied to the quarterly plan or the yearly plan. Innovators need to push their visions at least three to five years into the future to identify emerging opportunities or needs, and begin to develop products and services to meet those needs. Given the elapsed time to bring a new product to market, even a three year planning horizon is probably too short.

Forecasting opportunities that are less than two years into the future doesn't account for the internal development processes or the ability of competitors or disrupters to enter the market. Even incremental innovation is timeconsuming, so we may as well swing for the fences on a regular basis.

If these postulates hold true, then there are two conclusions. First, we need to make our idea to product or service launch process more compact and more efficient, so that we can identify opportunities and launch new products and services faster. In addition, we need to extend our trend spotting and scenario planning further into the future, to understand opportunities and provide enough runway so that we can create compelling and unique offerings and solutions as the market becomes aware of the needs.

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Jeffrey Phillips is a senior leader at OVO Innovation. OVO works with large distributed organizations to build innovation teams, processes and capabilities. Jeffrey is the author of "Make us more Innovative", and innovateonpurpose.blogspot.com.

Future of Shopper Marketing

by Kevin Roberts

The Sam Walton Business School at the University of Arkansas is on our calendar every October because of the superb annual conference run by the Center for Retailing Excellence. Andy Murray, Global CEO of Saatchi & Saatchi X, was a founder of the conference, and this year a keynote speaker. His subject was "the future of shopper marketing" - which should apply to anyone and everyone who wants to sell something to a customer.

The presentation featured five key points (and a whole bunch of arresting stories, insights, and examples):

• Put yourself at the heart of the customer (most companies try it the other way around)


• Navigate the experience of your customer from the "shelf back"


• Create ways for customers to participate and be involved in your brands and store experiences


• Explore the fringe/edge/margin for new ideas (Wal-Mart was a fringe idea, it came from Bentonville, not Chicago)


• Find new ways for manufacturers and retailers to collaborate authentically based on trust, transparency and shared goals

This is a special presentation and will be viewed in five years time as a definitive statement about the world's biggest activity: shopping.

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Kevin Roberts is the CEO worldwide of The Lovemarks Company, Saatchi & Saatchi. For more information on Kevin, please go to www.saatchikevin.com. To see this blog at its original source, please go to www.krconnect.blogspot.com.

Building 21st Century Skills

It Doesn't Matter How Long They're in School as Long as They're Learning Skills for the Future

by Kathie Thomas

Yesterday I wrote about the pros and cons of three-year college versus four-year college. That got me thinking about what we need to do to really teach our children to succeed in the future.

As the mother of two elementary-school-aged girls (and stepmother of three young 20-somethings), I believe one of my chief responsibilities is giving them the best possible education I can, one that will teach and prepare them to excel in all stages of life. I believe they need to be taught, at a young age, how to learn and solve new problems, and that known facts can change and learning never stops.

Therefore, it doesn't really matter how long they're in college - for three years, like U.S. Sen. Lamar Alexander (R-Tenn) argued in Newsweek, or four. What matters to me is whether students are learning what they need to be able to cope and adjust in an ever-changing world.

Even Alexander admitted that "the average amount of time students take to complete an undergraduate degree has stretched to six years and seven months." One possible reason for this is that brains are still developing, even into a person's 20's.

In fact, in a 2002 report by ACT for Youth Upstate Center of Excellence (ACT), Dr. Jay Giedd of National Institute of Mental Health said this means that students "may actually be able to control how their own brains are wired and sculpted." And, according to ACT, a collaboration of Cornell University, University of Rochester and the New York State Center for School Safety, "kids who 'exercise' their brains by learning to order their thoughts, understand abstract concepts and control their impulses are laying the neural foundations that will serve them for the rest of their lives."

So why worry about school length when their entire future is at stake?

According to "Learning for the 21st Century" in 2002, American writer and futurist Alvin Toffler once said "the illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn and relearn."

"Learning for the 21st Century" is the first report and mile guide by the Partnership for 21st Century Skills (P21), a leading advocacy collaboration "focused on infusing 21st century skills into education," which brings together the "business community, education leaders and policymakers... to ensure every child's success as citizens and workers in the 21st century."

According to the P21 Framework Definitions Document from May 2009, students should master the four following interconnected knowledge, skills and expertise in order to "succeed in work and life in the 21st century:"

• Core Subjects and 21st Century Themes: English, reading, foreign language, math, economics, science, geography, history and government AND global awareness, civic literacy, health literacy, and financial, economic, business and entrepreneurial literacy.


• Learning and Innovation Skills: Creativity and innovation, critical thinking and problem solving, and communication and collaboration.


• Information, Media and Technology Skills: Information literacy, media literacy, and information, communications and technology literacy.


• Life and Career Skills: Flexibility and adaptability, initiative and self-direction, social and cross-cultural skills, productivity and accountability, and leadership and responsibility.

To help school districts ensure that every child learns these skills, P21 provides them with self-assessments that allow them to plot where they are on the "spectrum of 21st century skills integration," chart a course for improved integration and better implement a 21st century skills model for learning.

Additionally, P21's Route 21 program provides educators with professional development and resources and curricula they can use to better teach 21st century skills to their students.

These are skills that are quickly becoming increasingly important today. They are essential not only to my children's futures, but to the future of the world. But many of them weren't even taught to 20-somethings when they were in school just a few a years ago - we didn't know we needed to teach them. We need to make sure that our children are being taught social skills, along with compassion for diversity and self-acceptance. They need to become deep learners who are passionate about new ideas and experiences. And they need to be competitive, to be able to stand up for themselves but also be humble.

It is my hope that these skills will help them find solutions that will make our world sustainable, not just from an environmental perspective, but from a social justice perspective. But I don't want the world to just survive, I want it to thrive. According to the Brookings Institute, education in any country has a powerful impact on safety, health and wealth. Education dramatically helps "reduce the risk of instability and lay(s) the groundwork for more stable, democratic political systems to emerge." If all children receive primary education, "as many as 700,000 cases of HIV" could be prevented each year. And, "every one percent increase in the level of women's education generates 0.3 percent in additional economic growth."

We already know that we live in a rapidly changing world. It is for that reason that our children need to learn to how to change with the world. As the original "Did You Know" video taught us, students today are being trained for jobs that don't even exist yet. And technology will have changed drastically by the time college freshmen become college seniors. It is crucial to our survival that we teach our children these skills.

Are your children learning these skills?

How are you helping them prepare for the 21st century?

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Kathie Thomas is the Director of Innovation and a senior partner at Fleishman-Hillard. The global Innovation practice group Kathie leads offers proven tools and approaches for helping organizations and teams inject a new level of innovation and productivity into their strategic planning and program development.

Innovating Every Day

by Holly G. Green

Who doesn't recognize the need to constantly innovate today?

After all, just look around at all that is new in our world in the past few years.

• Are you twittering? - 30 million+ others are.


• Do you have a product or service video on YouTube? - 25 million+ people do.


• And are you LinkedIn or participating in SecondLife?

These are just a few of the new social media innovations that are dramatically changing how people connect and get work done. Now think about other areas that are changing just as rapidly: technology, diversity, competition, products, etc. It can be a bit mind-boggling and certainly intimidating to ponder how to keep us these days.

What does innovation look like at work today and do you need to spend millions for a research and development department to come up with the next great product or service? How can you more actively incorporate new thinking, new products, and new options including getting more done with less into your day to day activities?

Today innovation needs to be about:

• Challenging the ways we do things even when it has always worked well


• Continually creating new products, services and ideas that have value for stakeholders


• Trying different and novel ways to deal with ongoing challenges


• Constantly seeking and implementing new and better ways to achieve results

Innovation is more than brainstorming or idea generation. To be truly innovative, you have to DO something different. And for businesses, whatever it is you do must have value for at least one of your stakeholder groups (employees, customers, suppliers, partners, etc.).


Key actions you can take to be more innovative include:


Develop awareness & understanding of your own assumptions, beliefs and biases

• We all have a lot of them. They are the thoughts that pop up as soon as we see someone, hear something or even smell a particular scent. Making assumptions about possible solutions to a problem can limit creativity, causing difficulty.


• At the beginning of any project or when faced with a tough situation, pause for a moment and note your assumptions. What do you believe to be so and could it be different? Learn to recognize when the strongest thoughts appear in your head and stop for a moment. Ask yourself "What if...I am wrong...There is something else...It could be interpreted another way...There is more I know/do not know about this?"

Ask the right questions

• Focus on where you want to go (versus where you are or what is in the way). Give yourself a clear target by describing, as clearly as possible, what it looks like when you achieve success. Think about which beliefs you need to move out of the way or suspend (i.e. "That's not the way we do things here...our customers will never accept X..."). Jot down the most interesting questions you can come up with to encourage thinking differently and make your questions open ended and future focused.

Consider different angles

• Pose questions to prompt your brain to look at the same data in a new way. "What would our competitor invest in if they were us? What one thing do our customers really want us to change? What do our employees think would provide the most fuel for our success?" Questions help you look at challenges from different perspectives. They help change our perception so that the same data has different meaning.

Stage your field of vision

• Get the right things in front of you. Adult humans are very visually driven creatures, but today there are more distractions than ever competing for our time and attention. Make sure your targets are visible to you as much of the time as possible. Get them on the wall in your office; have them pop up on your task list on your computer and PDA. Make sure they are visible to everyone involved as well. If it is not in front of you visually, you probably won't do it, so take the time to fill your working area with the visuals that help keep you focused on success.

Connect the dots in new ways

• Figuring out patterns forms a large part of our intelligence. Your subconscious mind likes closure. When faced with an incomplete picture, it works to complete the mental image by inferring the missing information. Your mind works the same way on an unsolved problem or challenge; it loves to dive right in and get the job done by using what you already know or expect.


• So, look for successful approaches that can be applied to your situation. What products, services and/or companies are incredibly successful right now? What can you adapt from what they are doing? Original ideas can come from recognizing new connections between familiar things and transforming them into something new.

In many ways, our own brain gets in our way the most and minimizes our innovation. We can learn to leverage the power of it by pausing every now and then to:

• define excellence up front (don't do it over, spend the time to do it right the first time)


• consider different perspectives and angles


• ask simple questions to trigger a new way of perceiving


• ponder the impossible

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Holly is the CEO of THE HUMAN FACTOR, Inc. (www.TheHumanFactor.biz) and is a highly sought after and acclaimed speaker, business consultant, and author. Her unique approach to creating strategic agility, helping others go slow to go fast, will change your thinking.

Where are the Market and Product Explorers?

by Jeffrey Phillips

Ok, after a number of years and a range of clients, I've seen a lot of titles. Product Manager, Product Developer, Product Development Manager, etc. I've even seen titles like Innovation Manager and Ideator and some other more fanciful titles. These are all valid and important roles. But what is evident to me is that while we place great emphasis on maintaining the existing product and service lines, there's almost never a person whose job it is to devise entirely new products and services. It's as if we believe that all future growth will spring from existing products and services, and we won't have to address new markets or new competitive threats, leave alone the opportunity to create a new "blue ocean".

Run down the list of titles in your firm that have to do with product or service management or development. There will be a host of people who "manage" products or services. These individuals have a vital job to maintain the existing product or service line. They have detailed plans for several years out about product enhancements and new features. They keep the lights on and ensure the existing products and their incremental improvements are planned and released. Additionally there will be people with the title of Product Developer or Service Developer. Their job is to work with the product managers to ensure the product or service is built according to the identified needs and specifications. Again, a vital job focused on very near term opportunities.

Occasionally we'll find a "New Product Development" or New Product Manager title in an organization. That role is probably closer to what we are advocating, but is still rooted in the near term. A new product or service developer or manager is still working under the constraints of the product or service mantra within the firm.

What most firms need, and sorely lack, are people whose full time job it is to identify new opportunities or markets and start shaping those opportunities into new products, services or business models that the firm can deliver. Existing and near term opportunities are important. They keep the lights on and the beast fed. But only rarely are they going to produce new, dramatic growth or differentiation. Innovation will spring from people who have longer term vision and are less tied to the day to day product or service delivery, and who are more interested in emerging opportunities or threats. In my experience, most product managers rarely read or interact outside of their own area of expertise, so the firm is constantly surprised when new products enter the market from unexpected quarters.

According to most CEOs, there's little that's more important than innovation, yet there are few if any defined roles in the organization who "own" it. It would do my heart good to see a few people with permanent responsibility to explore new markets and new opportunities. Perhaps we could call these individuals market or opportunity explorers. Naming them explorers gives them the right to investigate, explore and identify really dramatic new things and introduce them to the organization, which can then convert new opportunities into products and services. Most organizations have programs like Stage-Gate that do that part well. What's missing is an intentional focus, and an assignment and role(s) that focus solely on the longer term innovation.

Yes, I know that Product Managers and Product Developers consider this work part of their job, but given the demands of the job and the relentless quarterly reporting, longer term, disruptive work gets pushed out constantly. Let's have one or two people whose job it is - full time - to uncover and explore new opportunities and markets. You can't manage a task without assigning someone to do it and measuring them and their results. You certainly can't be successful over the long term when no one is actively responsible for this important work.

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Jeffrey Phillips is a senior leader at OVO Innovation. OVO works with large distributed organizations to build innovation teams, processes and capabilities. Jeffrey is the author of "Make us more Innovative", and innovateonpurpose.blogspot.com.

Are You Thinking Ahead of the Curve?

by Robert B. Tucker

The other day in Cincinnati I met Filippo Passerini, Procter & Gamble's Chief Information Officer. Fascinating guy. Ph.D. in statistics from the University of Rome. Father of three. Technical mountain climber. And the toast of his organization right now for what he and his troops have been able to accomplish.

Passerini was the driving force behind Procter's radical revamping of its entire back office operations. The move obliterated $1.2 billion in costs from P&G. It enabled the consumer products giant to respond quickly to the Global Economic Crisis, and bring new products to market faster than ever.

So how does Filippo unwind after routinely putting in 60 hour weeks? He plays chess. "Thinking what your opponent will do three moves out is good discipline for business," he told me in a thick Italian accent.

Filippo is the perfect illustration of an important innovation skill -- thinking ahead of the curve.

"It was our reading of trends that led us to make this move," he explained. In frequent open-ended brainstorming sessions, he and his core team of five saw that the world was shifting. It was moving from 'big is good' to 'flexible is good' to 'network is good'.


"Fifteen years ago, if you were a big company, that was a competitive advantage. Then flexibility was the way to achieve it. But we saw that over the next five years the network would become more and more important."


What to do?

Passerini's vision was that the entire company should operate from one consolidated, integrated global services network. He and his team assaulted the assumption that the way P&G handled back office functions like finance and accounting, HR, facilities management, and IT was good enough. They knew it was riddled with duplication and waste. So they set forth to build a new unit -- Global Business Services - to take over and consolidate all such operations.

Today, 'shared-services centers' in Costa Rica, Manila and Newcastle, England, provide networked support around the clock to P&G operations everywhere. All non-strategic activities have been outsourced to outside vendors. And Passerini and his group have 'decommoditized' themselves (his word) from being internal service providers to become strategic partners to the organization.

In researching a forthcoming book, I've been interviewing dozens of high output managers like Filippo Passerini. They don't try to predict the future, which is impossible. But they do make it a priority to spend time thinking ahead of the curve.


"One of our pillars is thinking out in the future and anticipating what is coming and then making your move. It's so much better than reacting."


Innovation-adept leaders like Filippo Passerini don't just gather better intelligence. They creatively crunch this data, argue about it, debate its implications, and try to connect the dots in some meaningful fashion. They seek to arrive at a point of view, both individually and collectively, about how to turn today's rapid changes into tomorrow's opportunities. And then they take action.

How are you "sussing out" (as the British say) the trends in your market and in the wider world? What's new in your information diet that's stimulating your thinking? What trends, emerging technologies and developments are you doing deep dives on to gain a knowledge edge?

"I manage my life like a chess game," Passerini told me as I was leaving. "I still continue to study the trends every day."

Not bad advice for all of us.

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Robert B. Tucker is the President of The Innovation Resource Consulting Group. He is a speaker, seminar leader and an expert in the management of innovation and assisting companies in accelerating ideas to market.

Managing Innovation is about Managing Change

by Braden Kelley

Innovation is about change. Companies that successfully innovate in a repeatable fashion have one thing in common - they are good at managing change. Now, change comes from many sources, but when it comes to innovation, the main sources are incremental innovation and disruptive innovation.

The small changes from incremental innovation often come from the realm of implementation, so the organization, customers, and other stakeholders can generally adapt. However, the large changes generated by disruptive innovation, often come from the imagination, and so these leaps forward for the business often disrupt not only the market but the internal workings of the organization as well - they also require a lot of explanation.

The change injected into organizations by innovation ebbs and flows across the whole organization's ecosystem:



Let's explore the change categories visualized in this framework using the Apple iPod as an example:

Changes for customers - Any disruptive innovation requires a company to imagine for the customer something they can then imagine for themselves. Go too far past your customers' ability to imagine how the new product or service solves a real problem in their lives, and your adoption will languish.

• Customers had to try and imagine Apple as more than a computer hardware manufacturer, and begin to see them as a company to trust for reliable consumer electronics. They also had to imagine what it might mean to download music digitally (without any physical media).

Changes for employees - Disruptive innovations often require employees do things in a new way, and that can be uncomfortable, even if it is only your employees imagining what you are going to ask them to help your customers imagine.

• Employees had to acquire lots of new knowledge and skills. Apple support employees had to learn to support a different, less-technical customer. Other employees had to learn how to effectively build partnerships in the music industry.

Changes for suppliers - Innovations that disrupt the status quo may require suppliers to work with you in new ways. Some disruptive innovations may require suppliers to make drastic changes akin to those they had to make to support just-in-time manufacturing.

• Apple had to work with suppliers to source components at the higher volumes and shorter lead times required for success in consumer electronics. This meant finding some new suppliers who could handle the new volumes and market requirements.

Changes in distribution - Often big innovations disrupt whole distribution channels and this can cause challenges for incumbent organizations (think Compaq and big box retailers versus Dell Direct).

• Going into consumer electronics meant that Apple had to build relationships with the big box stores including people like Target, Wal-mart, and Costco. They also had to build a completely new distribution system - iTunes - for distributing digital music.

Changes in marketing - New products and services (especially disruptive ones), can require marketing to find and build relationships with completely different types of customers and/or require marketing to speak to customers in a different way or to reach them through different channels.

• Marketing had to begin moving the brand from computing to lifestyle, including changing the company name from 'Apple Computer' to 'Apple' in 2007.
• Marketing also had to learn how to connect with mass market consumers, and help them imagine how this new hardware/software combination would enhance their life - no small task.

Changes in operations - In addition to changes in the supply chain, the organization may have to adapt to disruptive innovations by hiring different types of employees, re-training existing employees, accounting for revenue in a different way, or going about production in a new way.

• The Apple iPod was an experience sell, which highlighted the fact that Apple didn't really have a place where they could help customers experience their products. This led to the opening of Apple retail stores. Apple's finance and operations had to adapt to the change from low volume, high price items to high volume, low price items. Apple also had to build out a resource-intensive online operation that didn't exist before (lots of IT investment).

Note that the chart has arrows going in both directions, but not simultaneously. There is a push-pull relationship. At the beginning of the innovation process the satellites influence what the innovation will look like (new production capabilities, new suppliers, ideas from partners/suppliers, component innovations, new marketing methods, etc.). But as the innovation goes into final commercialization, the direction of the change becomes outwardly focused.

You can see that as an organization is imagining how to take their creative idea and transform it into a valuable innovation in the marketplace, they also should be imagining all of the changes that are going to be required and how they will implement them. This is no small feat, but with proper planning, organizational learning, and adaptation over time, any organization can improve its ability to cope with and even anticipate the change necessary to implement its next disruptive innovation.

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Braden Kelley is the editor of Blogging Innovation and founder of Business Strategy Innovation, a consultancy focusing on innovation and marketing strategy. Braden is also @innovate on Twitter.