Part 3 of 3 - Building a Systemic Innovation Capability

Interview - Rowan Gibson of "Innovation to the Core"

I had the opportunity to interview Rowan Gibson, co-author of "Innovation to the Core" about the book and about creating a systemic innovation capability inside organizations.

Rowan Gibson is a global business strategist, a bestselling author and an expert on radical innovation. In addition to "Innovation to the Core, Rowan is author of "Rethinking The Future", and a keynote speaker at large international conferences, corporate management events and executive summits.

We have split this in-depth interview into three parts. Here is the third part of the interview:


6. What are some of the biggest barriers to innovation that you've seen in organizations?

The biggest barriers to innovation tend to be deep and systemic. They are embedded in a company's leadership priorities, political structures, management processes, cultural values and everyday behavior. For example, senior managers might actually be working against innovation, because the company's metrics system doesn't measure them on it, and the compensation system doesn't reward them for it, so why should they be worried about it? Or a company might be biased heavily toward its legacy business and against revolutionary new ideas that might potentially cannibalize that business. Or allocational rigidities in the budgeting process are making it difficult to get resources behind new opportunities. Or the criteria used in the company's product development stage gate process may tend to kill great ideas too early. Or the organization might simply lack people who have had any significant training in the skills and tools of innovation. These are quite familiar problems, but in every organization the barriers to innovation are subtly different, depending on factors like corporate culture, business model, organizational structure, and so forth.

To make the transition from innovation initiative to enterprise capability, an organization needs to identify, objectively, the practices, policies, and processes inside its core managerial DNA that are toxic to innovation - like traditional management processes that systematically favor perpetuation and incrementalism over new thinking and innovation. Senior executives need to realize that building a truly innovative company is not a matter of simply asking people to be more innovative; it's a matter of positively changing those things that today diminish or stunt the organization's innovation potential. As Clayton Christensen puts it, "Systemic problems require systemic solutions".


7. What skills do you believe that managers need to acquire to succeed in an innovation-led organization?

Managers are going to have to develop a "dual focus" - both on short-term operational performance and on long-term growth opportunities and innovation. The problem here is that these two sides of the business require very different skills. It takes a certain style of management to cut costs, restructure, reengineer, and downsize, and quite another style of management to create growth through new ideas and initiatives.

Today's senior executives will have to learn to do both - they will have to be relentlessly focused on meeting the numbers within their legacy businesses, yet equally focused on generating and successfully commercializing new growth opportunities for the future. This is very easy to talk about but very difficult to do, because efficiency and innovation don't usually "cohabit" too well - they're uncomfortable bedfellows because there's just an inherent tension between these two forces. So what this adds up to is an extremely difficult balancing act for today's managers.

I know of only one way to realign the focus and commitment of top management so that it's equally focused toward innovation, and that is to design a new set of metrics for evaluating management performance - one that puts innovation at least on a par with other performance objectives. If you think about the Balanced Scorecard inside most organizations it's actually not very balanced, in the sense that it tends to be weighted heavily toward optimization rather than innovation. So the first step is to make sure innovation is fully represented in a company's metrics. It has to be recognized to be equal in importance to operational excellence.

Companies might preach the need for risk taking and rule breaking, but these are not the metrics they typically use for measuring their managers' performance. Management compensation is typically tied to other measures like cost, efficiency, speed, and customer satisfaction - and executives are paid for making progress against those metrics. Organizations that are serious about making innovation a core competence need a new set of metrics to offset this tendency and encourage managers to put as much energy into innovation as they are currently putting into optimization.

The other thing managers need to learn is that, in an innovation-led organization, strategy-making is no longer going to be a top-down, executive-only exercise. It's something that will involve everyone in the company - and even people on the outside - and it will increasingly emerge from the bottom up. Managers must come to believe, deep down, in "innovation democracy" - the notion that ideas with billion-dollar potential can come from anyone and anywhere.

Instead of fearing that this will put them out of a job, managers should recognize their pivotal role as champions of the new innovation process. Rather than going away in a little group and trying to come up with all the new growth opportunities on their own, executives should be encouraging all of their people to think like entrepreneurs and submit new ideas. Then they need to regularly sift through the wide variety of opportunities bubbling up from below, and look for ways to invest incrementally in these opportunities. This has worked very well for Best Buy, for example, where some of the most valuable ideas in recent years have come not from top management but from line-level employees who interact with customers each and every day.

This is no doubt going to require a degree of humility on the part of top management, because it essentially means that senior executives will have to give up the old, elitist view about who is responsible for the destiny and direction of the organization, and start involving many new and different voices in the process of charting the company's future.


8. If you were to change one thing about our educational system to better prepare students to contribute in the innovation workforce of tomorrow, what would it be?

Well, if we agree that tomorrow's economy will be an ideas economy, or a creative economy, or - as I like to call it - an innovation economy, then what does this tell us about the kind of skills tomorrow's workers are going to need? Look at the typical school curriculum. What are the kids learning? Most of it has to do with filling their heads with old information - with facts and figures - as opposed to enhancing their imagination, their ability to create or envisage new solutions.

The education system is set up to teach conformity. It punishes people who fail to stand in line, or who question authority. Yet when we look at successful innovators - like Steve Jobs or Richard Branson - we find that they tend to be rebels. They are contrarian in their thinking. They 'zig' where others 'zag'. They have somehow developed an almost reflexive ability to question the status quo, to look at things from a completely different angle of view, to imagine revolutionary new ways of doing things, to spot opportunities that others can't see, to understand the revolutionary portent in trends and discontinuities, to empathize with unmet needs, to take risks and follow dreams. Is that what schools and colleges are teaching their students to do? I don't think so. In fact, I would argue that they are systematically robbing people of their ability to think creatively.

Today's MBAs are also woefully unprepared for the new era. They may have learned how to read a balance sheet correctly, but when did they learn how to systematically discover new strategic insights, or how to come up with radical new growth opportunities, or how to recognize a really big idea when they see one, or how to rapidly reallocate resources to push ideas forward? And when did they learn how to foster the cultural and constitutional conditions inside an organization that serve as catalysts for breakthrough innovation? Let's face it, what business schools produce en masse are business administrators, not business innovators. They reward people with MBAs, not MBIs. And, again, I believe that part of the answer is to bring more balance into the student's priorities, so that they learn how to embrace the paradox between the relentless pursuit of efficiency and the restless search for radical, value-creating innovations.

Anyway, I'm glad to see that "Innovation to the Core" is increasingly being included on business school curriculums. I wanted it to be kind of a business education for the 21st century and it's gratifying to see it being used that way. The book is also playing quite a role in corporate training programs inside some of the companies that have truly recognized the innovation imperative. So if that means I'm making a meaningful contribution to advancing the field of business innovation, I'll be a happy man.


Related Articles

• Part 1 of 3 - Building a Systemic Innovation Capability


• Part 2 of 3 - Building a Systemic Innovation Capability


• "Innovation to the Core" Book Review and Innovation Summary

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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.

A Simple Model for Innovation

by Thomas Petersen

Finding the next big thing is probably one of the biggest challenges in the world of startups. Countless companies, entrepreneurs and VC's spend a considerable amount of time plus money figuring out where and what to invest in. Yet often the game changers seem to be coming out of nothing and from unexpected areas. Is it luck or do those who change the world know something we don't?

In my last post I talked about some principles that can be used to design better digital products. In this post I will look at a model to map and explore what different kind of product you should do.

Most of the businesses spawned in the first bubble, where based on the belief that taking any business from the physical world and putting it online was enough to be successful. Any assessment regarding logistics, economy of scale, or competition with offline brands, was naively optimistic if not absent. A lot have changed since then.

It's easy to be a wisecrack in retrospect. There is no shortage of expert analysis for why something became a success after the fact. It's much harder to know what products or services will become a success before they hit mainstream. Yet some people seem to be doing just that. Do they know something that we don't or are they just plain lucky?

Even though luck does have something to do with it (timing?) it's not all just random. As a matter of fact there are some very good models to help you better understand the art of innovating. Some of them complex others rather simple. The one I find most useful is this two-way matrix which covers four different types of innovation.


Exploring opportunity by mapping your idea on this matrix.



Do what others do, but do it better.

This is the most popular category to invent within. The basic premise is to create something that outperforms either on price, features, ease-of-use or performance. For instance: Sony Ericsson and Nokia competing on features or MS Office and Sun StarOffice competing on price (Free vs. expensive) This category is the easiest (on paper) to compete in, but also the category with the fiercest competition. With the introduction of the free price-tag this haven't gotten easier

Advice: Be better by being different. Think about how your product solves the jobs that your customers are trying to get done with your product, rather than simply thinking about what jobs you are solving. See what Steepster did for tea-connoisseurs


Do what others do, but do more.

This category is a little bit trickier. The basic idea here is to create an ecosystem for your product or service. The category takes advantage of easing the usage of a given product or service on different platforms.

Take the iPod as an example. You don't only get a music player. You also get the software to create play-lists plus access to buy music. Recently with the introduction of the iPhone and the AppStore this have created an even stronger ecosystem.

Another example is HP digital cameras, HP Snapfish for online picture storage and HP Snapfish print service that allow you to create albums with your own pictures and get them printed.

For a pure digital ecosystem Google is a good example. Google Search, AdWords and Google Analytics.

This category often has some "hero" product (the iPod, Google search, or the HP Camera) and often with a mixture of hardware and software and services.

From a company point of view this is often called vertical integration. Simplified meaning that a given company, own all the parts of the production that are needed to deliver to their customers.

The challenge with this category is that it often requires a successful product to build the ecosystem around. For a startup this is a difficult area to deliver in.

Advice: But even though you often do need a hero product, there are ways around it. Create an API that allows others to interfaces with your product. Then they will help you build your ecosystem. You won't necessarily have complete control (vertical integration) but you will become an important part of it.

37 signals API, FaceBook API and Google API all provide opportunity for interfacing with their products.


Do what others do, but for a new audience.

This is the most interesting type of innovation IMHO. Basically you are trying to find non-consumers and turn them into consumers by either making the product affordable or by making the product less specialized so that non-experts can use it.

An example on the latter is WYSIWYG editors such as Dreamweaver from Adobe. Mint.com took the idea of managing your own money to a new level allowing people without financial skills to suddenly understand their money in a different light. SalesForce.com basically created a SAP like product and broke it into pieces thus allowing access to the power of data-warehousing without the price that normally comes with it.

Leasing is an example on the former with its different financial plans are used to give non-consumers access to products they couldn't originally afford. The subsidizing that comes with most cell-phones is also an example of giving non-consumers access to your products.

Sometimes technologies that have previously been available for government or the scientific community find its way to the consumer market. It is interesting that rarely the original usage of the technology that ends up being the way consumers use it.

The very Internet we are using right now is an obvious example. GPS is another, both originally military systems.

But perhaps the best example is in the mobile industry with SMS (Texting if you're from the US).

Originally used by technicians to send test messages around the network. Then mobile customers began sending messages between each other. Later someone figured out a way to turn the SMS messages into commands that a server would understand (Look at any reality show). Then banks started using SMS for mobile banking (Large parts of Africans access their banks primarily through their cell-phone). Lately I have been buying ferry tickets with my cell. Ring-tones can be purchased through SMS. And last but by no means least, Twitter turned SMS into a broadcasting service.

Basically this approach to innovation is ripe with possibilities. Either a market has been proven (HTML editors, accounting, car markets and housing market) or an infrastructure is in place (Internet, GPS, Mobile net, Fiber).

This means that a lot of the hard work has been done already and you can focus on exploring different alternative uses of these to turn non-consumers into consumers.

Advice: Look around you and find areas that are served by only one type of customers and see if you can make that product available for what what previously non-consumers. As an example wordy.com to quote: "Let professional copy-editors check your text for grammar, spelling, punctuation and structure". Looking at the amount of typos, spelling and grammar mistakes, I normally do, be sure to sign me up when it's available!


Do what no other is doing

This is normally considered to be the holy grail of businesses innovation. Inventing something new that does not exist on the market already.

Classic example would be the light bulb, the car, the computer, the telephone. But also many types of software and services such as the OS and the spreadsheet. The innovations either create a demand or tap into jobs people are already trying to accomplish but with arbitrary tools.

It's hard to find something new, but not impossible.

By using the 2way matrix you can start to think more methodically about your startup. It won't guarantee success but it will help you gain a better understanding of your products and thus allow you to better explore different approaches to become a success.

To dig deeper and get a firmer understanding of innovation without the marketing hype I suggest you read some of the work from Clayton C. Christensen, Tony Ulwick or Peter F. Druckert.

And remember. The art of innovation is not just about finding something completely new but as much to connect two known areas in new ways.


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Thomas Petersen is the co-founder of hello, a digital creative agency that designs and develops products and services. He writes on Black&White^TM and on twitter @hello_world.

Part 2 of 3 - Building a Systemic Innovation Capability

Interview - Rowan Gibson of "Innovation to the Core"

I had the opportunity to interview Rowan Gibson, co-author of "Innovation to the Core" about the book and about creating a systemic innovation capability inside organizations.

Rowan Gibson is a global business strategist, a bestselling author and an expert on radical innovation. In addition to "Innovation to the Core, Rowan is author of "Rethinking The Future", and a keynote speaker at large international conferences, corporate management events and executive summits.

We have split this in-depth interview into three parts. Here is the second part of the interview:


3. Innovation demand in an organization is equal in importance to innovation supply, but why don't most companies see that?

Again, it's because they are usually too focused on the front end. So they work hard to push up the supply of ideas, launching initiatives like online suggestion boxes, open innovation programs, creative competitions, and perhaps some kind of reward and recognition system. But they fail to create the necessary demand for innovation, meaning the natural, reflexive pull for new ideas within and across the businesses. Failure to drive and manage the demand side of innovation is often where the whole initiative falls flat.

I often ask companies a simple set of questions to gauge the level of innovation demand inside their organizations. For example, Do the executives who run your company's core businesses demonstrate genuine interest in radical, new ideas by redeploying adequate resources behind them? Are they held personally responsible for the performance of their unit's innovation pipeline? Do they spend a significant percentage of their time mentoring innovation projects?

One of the dilemmas today is that, in most organizations, the pressure to innovate is not very real and tangible to senior managers. If you are running one of the company's business units, for example, what is real and tangible to you is the pressure to meet the numbers - to improve operational performance - and you know you are being monitored on a monthly, weekly, daily, or even minute-by-minute basis. But there is usually no similar pressure that is holding you directly accountable for innovation performance. So your natural bias is to worry a lot more about efficiency, and short-term earnings, and monthly variances from budget, than about the innovation performance of your business unit.

The challenge, therefore, is to create a whole set of pressure points on the demand side that will make leaders as sensitive and responsive to the need to innovate as they are to the need to make the numbers. For example, companies can give senior managers unreasonably high growth targets that call for innovative ways to dramatically outperform the average; they can force their senior managers to allocate a portion of their budget to fostering innovation projects; and they can link a sizeable part of executive compensation directly to innovation performance. These are the kinds of measures GE has taken to drive innovation demand across the organization, and it has produced impressive results because GE is a company where managers are fanatic about achieving their goals.


4. Since the book was published, have you come across other organizations that you think are doing systemic innovation really well?

When we were writing the book, we devoted quite a lot of ink to companies like Whirlpool, P&G, IBM, GE, Shell, W.L. Gore, and Cemex. These are all excellent examples. Since then, of course, I've been working with all sorts of other organizations to embed innovation as a systemic capability. They include pharmaceuticals giants like Bayer and Roche: tech champions like Microsoft and Nokia: financial services leaders like Generali Group; massive consulting firms like Accenture; manufacturing companies like Rexam, top automobile brands like Volkswagen; trend-setting retailers like Ahold and Metro; home appliance makers like Philips and Haier; even heavy engineering firms like Debswana diamond mining. For the last half-year, I've also been very busy with Mars - the global manufacturer of chocolate, pet food and other food products - and I've seen a lot of progress there, too.

What really satisfies me is to see companies like these gradually institutionalizing and managing innovation as a discipline. So some of them are setting up innovation directors, innovation boards, business unit innovation officers, and innovation ambassadors. They are introducing comprehensive new metrics to measure their innovation performance. They are building new processes to produce and nurture a continuous stream of innovation opportunities from inside and outside the organization, as well as robust innovation pipelines for taking ideas from mind to market. They are giving their people new tools - including the "Four Lenses" methodology and web-based innovation platforms - that open up the innovation process to everyone. They are training literally thousands of their employees to use these skills and tools, and setting up incentive schemes and reward ceremonies to encourage them to innovate every day. They are hardwiring all their HR systems - pay, spot awards, the long-term incentive plan, the balanced score card objectives - into the company's innovation strategy. They are creating new cultural mechanisms, such as a discretionary time allowance, to foster and support innovators throughout their ranks. They are building dedicated innovation spaces where their people can ideate together. And they are working hard to make innovation a tangible corporate value, rather than just an aspiration.

There are few other companies, too - ones that I have not yet personally worked with - that I would point to as good examples of systemic innovation. They include Best Buy and McDonald's in the USA, and Tata in India. In fact, there's a rapidly growing list of organizations around the world that seem to be gaining traction with the innovation management challenge, and what they demonstrate is that large companies really can tackle innovation successfully in a broad-based and highly systemic way.


5. People often talk about not having time to innovate. How can people find the time for themselves or their employees?

This is such an important issue. When we asked more than five hundred senior and midlevel managers in large U.S. companies to identify the biggest barriers to innovation in their respective organizations, one of the most common responses was "lack of time." Most of us are struggling simply to get through the day, and it's almost impossible to think creatively, reflect on new strategic insights and innovate in a focused manner when you're running from one meeting to the next, making loads of phone calls, writing a thousand emails and frantically trying to work through all the other tasks on your to-do list. So companies need to think seriously about freeing up more time, energy, and brainpower across the organization to devote to innovation and growth.

The fact is, none of us are going to "find" time for innovation. We are going to have to "make" time for it by driving a wedge into our agendas and turning innovation it one of our strategic priorities. In the book we say that carving out time for employees to imagine and experiment and develop their own ideas is the "first commandment of innovation". For some companies, a discretionary time allowance seems to work quite successfully. Well-known examples would be 3M, Gore and Google, where employees can spend a percentage of their time on pet projects. Other organizations take a number of people out of their day jobs for a certain period - say, a few weeks or months - and let them concentrate on generating new insights and ideas as members of dedicated innovation teams. Here, I'm thinking of companies like Whirlpool and Cemex. In addition, Whirlpool also has a formal training program where people are given time to learn the principles, skills, and tools of innovation in the same way as they learnt Six Sigma. Then there's the example of Shell, where the time allowance actually comes after a person or team has submitted an idea, and these people are given one or two months, rising to perhaps a whole year, to design some small-scale, low-cost experiments to test the validity of their new business concepts.

The other thing to remember, as I have been emphasizing all along, is that creating bandwidth for innovation is not just about the front end. It also has to do with freeing up top management time for the back end of innovation - time to devote to steering innovation activities, reviewing ongoing innovation projects, setting priorities, allocating resources, mentoring innovators and embedding innovation as a core competence. And making innovation stick requires a significant number of people - outside of R&D and new product development - who officially work on a full- or part-time basis on innovation activities. One global company has already appointed 1,200 part-time innovation mentors along with 50 full-time innovation consultants, who coach and support would-be innovators throughout the organization, helping them push their ideas forward.


Related Articles

• Part 1 of 3 - Building a Systemic Innovation Capability


• Part 3 of 3 - Building a Systemic Innovation Capability


• "Innovation to the Core" Book Review and Innovation Summary

Don't miss an article - Subscribe to our RSS feed and join our Continuous Innovation group!

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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.

Keep Moving Forward - Apple, Microsoft, Google, RIM, Hearst

by Adam Hartung

Did you ever notice how often a large company will introduce a new solution (often a new technology), but then retrench from promoting it? Frequently, the market is developed by an alternate company that captures most of the value. We can see that behavior looking at smartphones.


Source: Silicon Alley Insider

In 2008, three early leaders were Microsoft, RIM and Palm. But Microsoft chose to invest in Defending & Extending its PC software business - with updates to the operating system in Vista and OS 7. As the market has shifted toward mobile computing, Microsoft has been clobbered. But largely because it remained stuck trying to protect its "core" while the market shifted away. Palm also tried to Defend & Extend (D&E) its early position with updates, but because it did not follow the pathway to greater usage with new applications it also has seen dramatic share decline.

Meanwhile, RIM has promoted new uses within the corporate world for mobility, and thus grown its market share. And Apple has made a huge impact by bringing forward dozens of new mobile applications, closely followed by Google. What we see is a classic example of the early entrant fading largely because they decided to Defend the old market, rather than investing in the new one. Really too bad for shareholders in Microsoft (losing 20 share points) and Palm (losing 10 share points), while good for shareholders of RIM, Apple and Google.

And in Apple's case we can see that the company continues using White Space to grow revenues by expanding the new marketplace. The iPad is off to a very strong start, with tens of thousands of units ordered last week. But of greater importance is how Apple is promoting the shift to mobile devices from traditional PC devices. At SeekingAlpha.com, in "How the iPad, Slates Will Evolve the Next Two Years," the reporter projects how demand for all laptop products will decline as more capability and functionality is added to mobile devices like smartphones and these new slate products.

Microsoft can keep trying to Defend & Extend PC technology, but it won't be long before their efforts largely won't matter. Don't forget that once Cray computers was a rapidly growing super-computer company. But increasing performance from much alternative products eventually made Cray irrelevant. Same for Silicon Graphics and Sun Microsystems.

Today the market capitalization of Microsoft is about $250B, about 4x sales. Apple's market cap is just over $200B, about 6x sales. Google's market cap is about $180B, about 8x sales. All reflect investor expectations about future growth. The D&E company is simply not expected to grow - and in fact is much more likely to disappoint than the companies growing share in growing markets toward which customers are shifting.

And any company can choose to participate in growth, versus Defend & Extend. While Tribune Corporation is trying to find a way out of bankruptcy, and struggling to figure out how to deal with market shifts away from newspapers, Hearst is taking positive action. The Wall Street Journal reports in "Hearst Jumps Into the Apps Business" how the old-line newspaper company has set up a White Space project, complete with dedicated people and its own funding, to begin developing mobile applications for news!

Even when business leaders see a market shift, far too many choose to Defend & Extend the "core." Unfortunately, that leads to disappointments. Keep in mind Microsoft and its rapid loss of Smartphone share as users move increasingly to mobile devices from PCs. To succeed leaders need to drive their organizations in the direction of market shifts, and growth. Like Apple, Google and even Hearst.


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Adam Hartung, author of "Create Marketplace Disruption", is a Faculty and Board member of the Lake Forest Graduate School of Management, Managing Partner of Spark Partners, and writes for "Forbes" and the "Journal for Innovation Science."

8 Design Tips for Startups - Moving Beyond Aesthetics

by Thomas Petersen

Don't panic, this is not going to be a lecture on typography or what color palette you should use. It's not going to require you to have the latest Creative Suite from Adobe either. In fact you don't need to be a designer or UXD expert to use these principles. This is an attempt to cut through the noise from the art directors, usability experts, designers, developers, Venture Capitalist and family members to help you design better products.

So what does it take to design a successful digital product or service? Is it the brand, the choice of colors, the functionality, the chosen platform, or the social features?

Well all of the above certainly have some importance, but it's going to be very hard to prove that one particular element is why company X is a success. All too often we become attached to this idea that there is a recipe for success. That if you just get the right idea or if your design is cool or uses a certain technology you will be successful.

Nothing in my experience, supports that belief. In fact what means success for one company might spell failure for another.

For instance WordPress.com is based on PHP, a server side language that many "real" developers loathe. They claim it's not a real programming language and that it doesn't scale well. None-the-less, a whole plethora of successful companies uses PHP, including FaceBook.

Google isn't exactly winning design prizes for their look and feel, yet they are so successful that many companies are copying their style.

Hulu.com was a success long before they started to add more complex social features. Joost was designed primarily around social features and have joined the deathpool.

In other words, there are as many ways to design a successful product, as there are ways to design a failure.

Large companies almost never allow for failure, which partly explains why their solutions most of the time are as bland as they are.

They have the money to continue down a dead-end and will invest millions in doing all the right things from user research, to usability tests to 5 different design proposals to establishing brand guidelines, then launch something two years too late to great fanfare and unfortunately often to great obscurity.

If you are a startup, you are normally not allowed (and shouldn't be) to spend that much time and money building spaceships no one want to fly.

So what to do.

Take the design process seriously, but don't get too attached to one particular part of it and don't rely on any one particular discipline to give you the right answers. Get to the point where you have real users or customers as quickly as possible. It's these users that will provide you with the information that will get you you in a position to make better design decisions.

The following principles should help you get in a position:

1. Start simple, stay simple.

It cannot be said enough. Less is more - much more, and there is a very good reason that it pays to understand.

"If you do less you can measure more. If you can measure more you can better experiment with what works."

Most products are simple, based on simple insights.

Make sure that you stay true to those insights, until you know you tried out every different interpretation of them. Don't add new features just because you think that it will help, it won't, not yet. If your product becomes a success it's not because of how many features it has.


2. Don't confuse change with improvement.

One of the biggest challenges record artist face when producing a new album is fatigue. They get this from listening to the same riffs, passages, drum tracks, choruses etc. over and over and over. It's actually one of the reasons why many have a problem listening to their own album when it's finally out. Startups as intense and time consuming as they are, have similar problems. It's very tempting after a couple of months of looking at the same design to want to change it and think you are improving your product. You aren't, so don't succumb to the temptation. It's not worth it.

Furthermore, if it goes like it does in most cases, you will soon enough have to spend resources on changing things after you launch.


3. Build to integrate.

Think about whether your product could be a good extension to already existing products/services. That way you can tap into already existing digital ecosystems and leverage on their popularity and reach this will give you some standards to adhere to. Remember that the more you are able to interface with other services the more trust you will establish. Guilt by association works both ways.


4. Don't do everything that is possible only what is necessary.

Constrain yourself. A good product has limitations. It doesn't just succumb to every temptation that comes along. Focus on what makes your product the product and only add features if you get clear signs that it is needed. Most users will have to learn your product anyway so don't try to impress them with features before they understand what your product is all about. iTunes may have many flaws, Basecamp from 37Signals leaves a lot to be asked for, but when all is said and done, their products are rock solid and there is no feature like the rock solid feature.


5. Usability studies and focus groups are for refinement not for innovation.

Let me be perfectly clear. Running a successful and informative usability study or focus group wont help you understand whether the market wants your product or whether you have solved your interaction flow satisfactory. I know there is a lot of buzz around User Centered Design (UCD) and that a hoard of usability experts will claim that they can help you design more successful products if you just ask the user (Which I find ironic). Don't believe the hype, I say this as someone who also makes a living doing usability tests. There are a few situations where usability studies make sense for startups, but most likely it wont be in your situation.

I will write a separate post about UCD but leave you with a few observations.

There is no one-to-one relationship between what people say in a focus group and what they actually do. It's way to complex and there are way to many psychological elements and social dynamics involved to allow you to extrapolate important data out of it at an early stage.

In most cases you are testing in a pseudo environment with mock-ups, html prototypes or even paper prototypes. Just imagine how Twitter, SMS, Google or LastFM in its early days would have scored. So many products need to be experienced before users will provide you with any valuable insights to build on.

It would be like trying to determine the usage and usability of a hammer by looking at a piece of paper with a drawing of it. You get the picture.


6. A feature is not a product.

Speaking of hammers.

Don't just think about your product as a bunch of features. Instead focus on what it is your are selling at its core. What is needed for your product to function? How much can you take away from it without sacrificing the core product.

Think about features as something to add after you have launched.


A hammer has one purpose, which is to help you knock in nails. Everything on top of that are features. Therefore understand when you are working on your core product and when you are working on adding features.

The benefits of thinking like this, is that it will help you establish a very clear an precise picture of what makes your product your product. Which means you will much better be able to understand why you are adding features when you are and won't get caught in the "me to" behavior that can drive companies out of business very fast.


7. Think how, not what.

What matters is not what functionality your product has, but how it works. A sign-up process is not just a sign-up process, a checkout process is not just a checkout process, a button is not just a button, a rating system is not just a rating system.

Think about how you can stand out by introducing something that everyone else might have but in a unique way. That's what Steepster did when they re-designed their rating system (see how they did here). Skype was not the first VOIP provider, far from, but Skype managed to make it stand out and look like a product not just a technology. In other words they productified a technology

You will be surprised how much the "how" can help improving your product.


8. It's not innovation to use the latest technology.

It's tempting to try and set yourself apart by using the latest build of some framework or technology. But don't do it just because it's the latest. Make sure that you understand the implications of what you are introducing. Is it processor intensive, is it increasing load time, does it improve the experience, is it understood by enough developers so that you can optimize it.

If you can't answer the above, you probably shouldn't do it.

All too often companies get caught in thinking that new technology in itself is the differentiation factor. But as most successful businesses know. Innovations have an introduction curve and not everyone should take advantage of a given technology just because it's available.


Conclusion

Designing successful products has more to do with understanding what doesn't work than with what works. If you can get your company in a position where you can "feel" the state of your product, you are able to make smarter decisions and in effect will have a better chance of success.


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Thomas Petersen is the co-founder of hello, a digital creative agency that designs and develops products and services. He writes on Black&White^TM and on twitter @hello_world.

Part 1 of 3 - Building a Systemic Innovation Capability

Interview - Rowan Gibson of "Innovation to the Core"

I had the opportunity to interview Rowan Gibson, co-author of "Innovation to the Core" about the book and about creating a systemic innovation capability inside organizations.

Rowan Gibson is a global business strategist, a bestselling author and an expert on radical innovation. In addition to "Innovation to the Core", Rowan is author of "Rethinking The Future", and a keynote speaker at large international conferences, corporate management events and executive summits.

We have split this in-depth interview into three parts. Here is the first part of the interview:


1. When it comes to innovation, what is the biggest challenge that you see organizations facing?

The biggest challenge is not generating new ideas and opportunities. It's how to make innovation a deeply embedded capability. What usually happens is that companies focus most of their efforts on the front end of innovation - so they launch some kind of ideation initiative with a lot of hoopla and they get a whole bunch of ideas. But then they hit a wall because there is no back end - there is no organizational system for effectively screening ideas, aligning them with the business strategy, allocating seed funding and management resources, and guiding a mixed portfolio of opportunities through the pipeline toward commercialization. So, invariably, what we find is that the whole innovation effort eventually withers. And all those enthusiastic innovators inside and outside the company become cynical and discouraged as they watch their ideas go nowhere.

The real challenge, therefore, is to turn innovation from a buzzword into a systemic and widely distributed capability. It has to be woven into the everyday fabric of the company just like any other organizational capability, such as quality, or supply chain management, or customer service. In other words, for innovation to really work, and to be sustainable, it has to become a way of life for the organization. Yet how many companies have actually achieved that? The sad truth is this: most organizations today still have absolutely no model, no practical notion, of what the back end of innovation actually looks like. If you asked them to build a corporate innovation system that seamlessly integrates leadership commitment, infrastructure, processes, tools, talent development, cultural mechanisms and values, they wouldn't even know where to start. That's the challenge Innovation to the Core was meant to address.


2. Why is it so important that organizations build a foundation of insights before generating ideas?

OK, let's go back to the front end of innovation. If you're going to do this properly, what you're really looking for is not just a lot of ideas. Senior managers often complain that most of the ideas they get from their employees and customers are not very good ones. So after they open up the innovation process to everyone, everywhere, they find themselves wasting valuable management time sorting through a heap of garbage to find a few interesting submissions. That's because, frankly, they don't really understand how the innovation process actually works.

Try to look at it this way: before you start building a house, you have to gather the right materials and lay a solid foundation, right? Remember the story of the three little pigs? If you build a house from the wrong materials it can easily be blown down, so it's useless. Then there's the Bible story of the house built on sand rather than rock. It makes a similar point: if you don't have the right foundation - regardless of the quality of the building materials - the house is equally useless. So it is with new ideas and opportunities. In a sense, they need to be built from the right "materials" and they need a solid "foundation", otherwise they won't be very good. What I'm getting at here is that there is actually a front end to the front end of innovation. Before you start ideating, you need a set of really novel strategic insights. These are like the raw material out of which exciting innovation breakthroughs are built. If you ask people to innovate in a game-changing way without first building a foundation of novel strategic insights, you find that it's mostly a waste of time. You get a lot of ideas that are either not new at all, or so crazy that they're way out in space.

So how do you develop those all-important insights? I teach companies a methodology for doing that in a systematic way - it's called "The Four Lenses of Innovation". The fact is that in order to discover new ideas and opportunities of any real value, people need to stretch their thinking beyond the conventional. They need to develop fresh perspectives. So the "Four Lenses" represent four specific types of perspectives, or ways of looking at the world, that innovators typically use to come to their breakthrough discoveries. They are (1) Challenging orthodoxies, (2) Harnessing trends, (3) Leveraging resources in new ways, and (4) Understanding unmet needs. By using these lenses, or these particular angles of view, it's possible to systematically look through the familiar and spot the unseen. That's how you discover those deep insights that others have overlooked or ignored.

Once you have gathered a collection of really inspiring insights, you can then do your ideation work. You start thinking about what kinds of ideas and opportunities could be built on these unexamined dogma, unexploited trends, underutilized resources, and unvoiced customer needs. And what that gives you is not just a high quantity of ideas but also a high quality. Rather than just pulling ideas out of the air, you generate opportunities that are grounded. They are based on real industry orthodoxies that deserved to be challenged, real discontinuities that could potentially reshape the business landscape, real competencies and assets that could be leveraged to create opportunities beyond the boundaries of the existing business, and real customer needs that have not yet been addressed. So you inspire ideas that are connected to the real world; they are not in some crazy, unbounded creative space. They are founded on realities - things you can test and validate.

Now imagine that instead of merely inviting everyone, everywhere to "go forth and innovate", you actually gave them access to these powerful strategic insights via a web-based tool, and you taught them how to ideate effectively. Can you see how that would dramatically enhance their innovation performance? That's what I'm currently doing with all kinds of organizations around the world.


Related Articles

• Part 2 of 3 - Building a Systemic Innovation Capability


• Part 3 of 3 - Building a Systemic Innovation Capability


• "Innovation to the Core" Book Review and Innovation Summary

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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.

Book Review - "Innovation to the Core"

by Braden Kelley

A few weeks ago I received "Innovation to the Core" by Rowan Gibson and Peter Skarzynski (with an introuction by Gary Hamel) in the mail. "Innovation to the Core" weighs in at 295 pages, but it is an easy, and pleasant read. The book is full of a lot of great material, and the influence of Gary Hamel is evident in several of the chapters.

Rowan Gibson travels the world giving speeches and conducting innovation workshops, and Peter Skarzynski is the CEO of innovation strategy consultancy - Strategos (which is now owned by UTEK).

The book starts with a premise that I agree with, which is that too many companies view innovation as a specialized activity to be handled by specialists - in much the same way that people viewed the quality movement in its early days. Now of course companies endeavor to embed quality throughout the entire organization and seek to make it a core competency. The same thing now needs to happen with innovation in organizations that want to be able to both sustain themselves and win in the long term:


"Despite the gargantuan nature of the challenge, building a deep, systemic capability for innovation is now the inescapable imperative for every company - as important to an organization's success and survival as the quality movement was in its day."


To create the preconditions for systemic innovation you have to:

1. Create time and space for reflection, ideation, and experimentation


2. Maximize the diversity of thinking


3. Foster connection and conversation ("combinational chemistry")

Before reading this book, I've been trying to convince people that insights are more important than ideas and that the quality of a company's insights and execution are what will differentiate the winners from the losers in today's marketplace. This insights conversation has always been difficult because people always want to jump to the ideas - thinking that the idea is king.

It was refreshing to see that the authors of "Innovation to the Core" also feel that successful and sustainable innovation starts with the insight, and so Chapter 3 is all about building a foundation of novel strategic insights predicated on "Four Lenses of Innovation":

1. Challenging Orthodoxies


2. Harnessing Discontinuities


3. Leveraging Competencies and Strategic Assets


4. Understanding Unarticulated Needs

There are additional ways to generate insights to build sustainable innovation on, but these are a good starting point, and Chapter 3 by itself makes a purchase of this book worthwhile.

Once you identify the insights you are going to build on, then you can get on with producing a torrent of new product or service ideas and even attempt to innovate across the business model. One other key distinction that the book makes is that innovation doesn't have to be risky, and that when you look at your innovation portfolio, you should have a balance of ideas with differing levels of potential impact on the industry.

Timing is incredibly important to successful innovation too - both in terms of determining when to ask the right questions but also when to ramp up the level of investment in an idea. Ramp up the financial investment too soon and you may doom the project to failure from accumulating losses and progress that can't be accelerated by greater financial commitment. But, ramp up the financial investment too late and someone else may beat you to the market. The key is to identify which barriers to successful development can be accelerated by increased spending, and which can't.

I also liked how the authors of this book allocated some of this book to the importance of the demand side of the innovation equation. Companies that focus only on generating a greater number of innovation ideas without creating the conditions that increase the desire and capabilities of managers to develop an increasing number of innovation ideas, will face a higher chance of innovation failure over the long term.

Taken all together I found "Innovation to the Core" to be an interesting and important read for any manager looking to gain a deeper understanding of what's required for creating systemic innovation. The book was worth the time investment.


Related Articles:

• Part 1 of 3 - Building a Systemic Innovation Capability
  
• Part 2 of 3 - Building a Systemic Innovation Capability
  
• Part 3 of 3 - Building a Systemic Innovation Capability (coming March 18, 2010)

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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.

Escaping the Internet Commodity Trap

by Rowan Gibson

The Internet is like a black hole that relentlessly sucks in, digitizes and democratizes content of every kind. While that may be generally good news for consumers (hey, look at all the great stuff we can now get for free), it has turned out to be unbelievably bad news for the content providers. Ask anyone in the print media business, or the music business, or the movie business. For at least the last decade, industries that primarily produce content have been struggling hard to find a viable new financial model in a world where internet users (particularly the young generation) don't expect to pay for anything they read, listen to, or watch. As one popular mantra puts it: "Content is no longer king". The fact is, content distribution is now king. Power has shifted to the content aggregators - think Google, YouTube, Digg.com or iTunes - and to new media platforms like Amazon's Kindle reader or the Apple iPad. So how exactly are content providers supposed to make money in an era of rampant digital commoditization? The only option they have left is to innovate like never before; to reinvent their industry business models before they become obsolete.

I remember talking to Kevin Kelly, co-founder of Wired magazine, back in 1995 about the future of the Web. He told me he viewed the Internet as a "planetary-sized copying machine" and added that "trying to stop copying on the Net is impossible." Indeed, within a week of my latest book "Innovation to the Core" being published in Chinese, there were at least two websites in China offering a digital version of the book for illegal download. Consumers clearly win - why buy the physical book when you can get the digital file for free? But in terms of book sales and royalties, the author (i.e. me!) and the publishers lose out entirely.

That's why the book publishing industry is feverishly exploring a variety of new business models. One option is to sell eBooks direct to customers, cutting out middlemen like distributors and retailers, and building a community around the books and authors. Since eBooks have a relatively low price tag, the hope is that consumers will be willing to pay for the genuine article (a la iTunes) rather than download an illegal copy, especially if it comes with social-media-enabled tools that help them discuss and share the book with others. Another option is to make the eBook itself a richer multimedia experience (with audio, video, hyperlinks and so forth) rather than just a text-based medium. Instead of embedding all of these media in a single digital file (which would still be relatively easy to copy and distribute illegally), publishers could give consumers a code when they purchase the book that offers exclusive access to a dynamic, integrated online application environment.

A similar challenge faces today's music business. Over the last decade, music labels, retailers, and the artists themselves have seen their revenues fall off a cliff in an era when teenagers can - and do - get all the music they want for free. Last year, 95% of music downloads were still from illegal file-sharing sites. And although Apple is now the world's biggest music retailer, its iTunes store has never been a massive revenue producer. Instead, it simply serves as a provider of low-cost content for the iPod, helping to drive sales of Apple's premium-priced music player. So far, the latest trend - cloud-based, streaming music sites like Spotify, Rhapsody and Pandora - has not been very helpful to the music industry either. Until now, these sites have employed a free-to-users, ad-supported model which doesn't generate much money for the labels or the artists. As an example, it's estimated that a million plays of Lady Gaga's popular song "Poker Face" on Spotify only earned her a paltry $167.

Frankly, I'm not too worried about the artists because most of them make their money these days on concert revenue and merchandising, not on the sale of recordings. And since people go to live concerts to hear artists performing songs they already know, it's actually in the artists' interests to have their music distributed as widely as possible, even if it's for free, in order to generate a lot of fans. Yet what about the music labels? How can they possibly compete against free downloads? Only by finding innovative new ways to add value. That's what MusicDNA is all about. It's a new digital file format that contains not just music but additional content such as lyrics, images and interesting info like interviews, tour schedules, or updates to the artists' social network pages. Anyone who downloads the file illegally would miss out on all these extras. So MusicDNA offers hope that the industry can open up new revenue streams. It may also point the way forward for Hollywood studios as they look for ways to battle illegal movie downloads.

Another victim of the Internet commodity trap has been the traditional news media industry. According to a new survey by the Pew Internet and American Life Project, more Americans now get their news from the Internet than from newspapers, and three-fourths say they primarily learn of news via updates on social media sites like Twitter. So as readers (closely followed by advertisers) make a mass exodus from print to digital media, 'The Press' as we know it seems to be going the way of the dinosaur. In the face of mounting bankruptcies, mass layoffs and plunging advertising sales, some publishers have already thrown in the towel. As an example, McGraw-Hill recently signaled their despair by selling off BusinessWeek at the bargain basement price of less than $5 million.

So is there any hope for this ailing industry? Some think it might still be possible to go back to the old 'paid content' model. Rupert Murdoch, illustrious media mogul of News Corporation, has been making headlines over the last year with his plans to erect a pay wall around his media. And, if it works, others will almost certainly follow. An analogy could be the advent of cable TV in the 1960s and 1970s. At first, very few believed that anyone would be willing to actually pay for TV shows and movies after spending decades watching them for free. But today the average household in North America pays about $50 a month for Pay-TV, so why shouldn't the same principle work for the Internet? There is also new hope on the horizon in the form of emerging digital media platforms like Kindle and Apple iPad, that promise to bring fresh revenues to the news industry by charging readers to access publications in an exciting new way.

Gordon Crovitz, former publisher of the Wall Street Journal, has co-founded a company called Journalism Online to help newspapers find new payment models. These range from micropayments - where readers pay for individual stories - to "freemium" models like the one used by the Financial Times, where readers can view 10 free pages every 30 days.

One of Rupert Murdoch's properties, The Wall Street Journal already charges readers US$119 a year for an online subscription. The WSJ is also experimenting with a new kind of media mix that takes it beyond the written word. Last September, its Digital Group rolled out News Hub, a twice-daily video news series. In January The Wall Street Journal Network delivered a record 5.5 million streams, with about a million or so views being generated by News Hub. This February the group launched Digits, a video series focused on technology which streams live each weekday, and plans are now in the works for several other original live series.

As whole industries see their traditional business models sucked into the Internet commodity trap, their only hope of escape has become radical innovation. For content providers of every stripe, success and survival in the future will be based on the ability to fundamentally rethink, re-imagine and reinvent themselves by innovating around who they serve, what they provide, how they provide it, how they make money, and how they differentiate from the rest. Stewart Brand's maxim may have famously stated that "information wants to be free", which is at the heart of utopian Internet democracy, but the cold reality is that every business has to make money. That means that whether you produce books, newspapers, magazines, music, movies or TV shows, somebody somewhere has to pay somehow. Figuring out who that could be - and how the financial model would work - is one the greatest business battles of our age.


Related Articles - "Content is No Longer King" - Part 1 - Part 2 - by Stephen Shapiro


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Rowan Gibson is widely recognized as one of the world's leading experts on enterprise innovation. He is co-author of the bestseller "Innovation to the Core" and a much in-demand public speaker around the globe. On Twitter he is @RowanGibson.

Are You Prepared to Lose Control of the Idea?

Photo by chavals
by Glen Stansberry

People are awfully protective of their ideas (myself definitely included). There are plenty of reasons for not sharing ideas:

• We're afraid people won't like them, or worse, won't understand them.
  
• Someone might steal them
  
• They might, in reality, be total crap
  
• They're hard to explain, especially when the proverbial ink is still dry in the mind
  
• etc., etc., etc.

But the biggest fear I have of sharing ideas is losing control.

There is an awful lot of ego that gets attached to our ideas, (see: the God Complex), and the thought of losing that grip is crippling.

One of the most intoxicating aspects of having an idea is having control over the idea. We thrive on building, planning, analyzing, almost anything but actually doing.

It's not just little companies or amateurs that struggle with letting go. Some of the biggest companies in the world suffer from these 'idea insecurities' listed above.


Microsoft's Decline In Innovation

I read an interesting sad article about the causes of the downward spiral of Microsoft's innovation. For the past ten years, Microsoft has been playing catch-up to companies like Google and Apple. Instead of creating breakthrough products that once made the software giant famous, the company has relied on a monkey-see, monkey-do approach to production.

The article goes on to explain that the top brass at Microsoft were directly responsible for the void of innovation, simply by harboring the fears listed above. Products were never made because of petty differences between divisions. The main reason for the lack of innovation was the stubbornness of division heads to work together on technologies.

They were afraid of losing their ideas in favor of someone else's better idea.


Letting Go of the Idea

Some people never understand that if they hand over control of the original idea, something better might come out of it. Flickr was set to be a gaming company until the founders discovered a really efficient way to serve photos. There are plenty of examples of this happening throughout history.

Letting go is one of the absolute hardest concepts to grasp as an entrepreneur. But sometimes our idea outgrows us. The trick is to swallow the thick pride and embrace the potential of what could happen.

If the powerful suits at Microsoft had put aside petty differences and allowed other departments to improve their products, who knows what Microsoft would be today. They might have had a Google killer, or the iPod. We'll never know.

This wasn't an excuse to single out Microsoft. Every single company and entrepreneur deals with control issues at some point. I know I have. The important thing is recognizing when we're holding on a bit too tightly on what's "ours" and not recognizing the full potential of the idea, with the help of others.

Related article - Microsoft and Creative Destruction - by Scott Berkun


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Glen Stansberry writes at LifeDev, a blog that helps people make their ideas happen. You can follow him on Twitter here.

The Innovation Paradox

by Mitch Ditkoff

My big insight about innovation these days would make Nobel Prize winner, Niels Bohr, proud.

"Now that we have met with paradox," explained Dr. Bohr, "we have some hope of making progress."

Innovation is full of it - paradox, that is.

On one hand, organizations want structures, maps, models, guidelines, and systems. On the other hand, that's all too often the stuff that squelches innovation, driving it underground or out the door.

The noble search for a so-called "innovation process" can easily become a seduction, addiction, or distraction whereby innovation is marginalized, deferred, over-engineered, and worn like a badge.

True innovation is about allowing room enough for paradox to be a teacher and guide - and to accept, at least for a little longer than usual, ambiguity, dissonance, and discomfort - the age-old precursors to breakthrough.

Remember, there's a big difference between Six Sigma and Innovation.

Six Sigma is about reducing variability. Innovation is about increasing it - and that often means allowing the kind of "messiness" that process-mavens interpret as a problem needing to be fixed, rather than a pre-condition to breakthrough and the resulting commercialization of that breakthrough that most people refer to as "innovation."

Yes, process, structures, systems are necessary, but they don't have to become overly pre-emptive. If you stay in an innovative mindset and can adapt to emerging needs, they will eventually become self-organizing when the soul of innovation is allowed to flourish.

Can we help the "innovation process" along with the right application of strategy, infrastructure, and planning?

Of course we can.

But beware! "Helping" the process too much often becomes counterproductive - much in the same way that attempting to catch a milkweed floating through the air with a bold reach of your hand actually repels the object of your desire.

Innovation Physics 101.


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Mitch Ditkoff is the Co-Founder and President of Idea Champions and the author of "Awake at the Wheel", as well as the very popular Heart of Innovation blog.

Adopt, Adapt, Improve and Innovate

by Paul Sloane

Adapting ideas that have worked in one environment and using them in another is one of the most successful of innovation techniques. Let's look at some examples.

In 1916, a young American scientist and inventor called Clarence Birdseye went to Canada as a fur trader. He noticed that people in Labrador kept their food frozen in the snow for extended periods in the winter. When he returned to the U.S. he developed this idea and launched a line of quick-frozen foods and persuaded retailers to stock them in freezers. He created the frozen food industry. Birdseye subsequently sold his business to General Foods Corporation and made his fortune. He saw a good idea, adapted it to his business environment and implemented it.

Alexander Graham Bell studied the workings of the human ear. He adapted the idea of the eardrum vibrating with sounds into the workings of a metal diaphragm which led to his invention of the telephone.

The motto of the Round Table is adopt, adapt, improve and it is an excellent guideline for implementing new ideas in your business. Taking ideas from other environments and adapting them for use in your situation is one of the best ways of implementing novel solutions. Amar Bhide of the Harvard Business School studied the origin and evolution of new businesses. He found that over 70% of successful start-ups were based on ideas that the founders had adopted from their previous employments. They took a promising idea in a field they understood and made it better.

The person who invented the roll-on deodorant was looking for a new way to apply a liquid. He copied an idea from another field, writing, where the same problem is solved. He adapted the concept of the ballpoint pen to create the roll-on deodorant.

Samuel Morse was the inventor of morse code. He encountered a problem sending signals over long distances on the telegraph - the signal became attenuated and weak. Then one day when he was travelling by stagecoach he noticed how the coach changed horses at relay stations. He adapted this idea to put in relay stations for telegraphs that boosted the signal.

In 1941 George de Mestral went for a walk with his dog in the Jura mountains in Switzerland. On their return he noticed that many plant burrs were attached to his trousers and to the dog's coat. They were hard to remove. He examined them under the microscope and saw that they contained tiny hooks that caught in the loops of his clothes and in the dog's hair. He developed an artificial material to mimic nature and in doing so he invented Velcro.


Putting this creativity technique to work

If you have a problem try to force fit a link with a random event or animal or institution. Then adapt some ideas from that environment. Say your problem is how to motivate a lethargic team and you choose at random the Olympic Games, a tiger and a Ballet school. What sorts of ideas would that trigger? You might offer medals as recognition for top performers. You could keep records of who has achieved the fastest qualified lead or the fastest assembly time and post them on the wall or the extranet in the form of Olympic records. The tiger might suggest face painting as a trick for raising morale or it might suggest hunting - you could have a treasure hunt in the office or organise a 'hunt for sales' competition. And so on. The ballet school students practice all their exercises each day before they perform a dance. This might suggest a high-energy group practice session each morning before work proper begins. Ballet dancers practice in front of mirrors - what if we installed systems that gave us feedback to build the team's motivation?

Alternatively, try to adapt a combination between your organization's main strength and that of other organizations or people. Say you provide high level training courses and you choose at random a hospital then you might come up with the idea of a consulting accident and emergency clinic where people turn up with their problems and you help diagnose them on the spot. Or you may ponder that many people forget what they learn on training courses. In a hospital patients have ongoing physiotherapy sessions to aid recovery. This idea could be adapted so that you send out "physio trainers" to top up the learning of participants after they have completed their courses. Alternatively, if you think of the Boy Scouts then you might imagine a summer camp for some of your top clients or a "bob a job" campaign where you offer short introductory courses for new clients.

Lateral thinking is about finding new ways to solve problems. It is very likely that the current problem you face at work today has been faced and solved by other people. Maybe they were in your line of business or maybe they confronted a similar problem but in an entirely different walk of life. Why do all the brain work yourself when you can adapt someone else's idea and make it work for you?

Tips for finding ideas you can adopt and adapt:

• Deliberately gather inputs from unrelated settings.
  
• Take time out to discuss your problem with people from entirely different backgrounds. If you are a businessman then ask a teacher or a priest or a musician.
  
• Read a different magazine, visit a different environment, see a foreign movie, drive a new route home, find some new inspiration in a different source.
  
• Place yourself in a different environment and it will help you see concepts and ideas you can adapt. If you visit an Eskimo in his igloo, like Clarence Birdseye, you may come back with an idea as good as the one that built the frozen food industry.
  
• Identify analogous situations in other fields and ask how they would be handled.

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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.

Free Range Innovation

by Jarie Bolander

Cowboys love the wide open plain. The vastness of the prairie ignites a self-reliance that few others can comprehend or handle. The cowboy is free to drive his cattle the route he feels best, yet his end game is always clear - get them to market. The cowboy struggles to keep his herd moving and might even loose a few along the way. His satisfaction comes when the herd is safely to market and the wage he earns hardly pays for his trouble but that does not matter - he's in it for the journey.


The Cowboys of Innovation

Innovators are like modern day cowboys that peer out onto the vastness of the world and chart a course to get their ideas to market. They do it for the love of the journey and the results of seeing something they invented being used by millions. Companies tend to fence innovators in by overburdening them people with process, procedures, arcane organizations and stifling bureaucracy. These conditions severely limit the creative mind to the point of stalling out any sort of innovation.


Wander Within Limits

The innovation cowboy needs to wander around and seek the best path forward. This means his organizational structure has to be flexible enough to wander yet sets limits to get to market. The best structure for this is the automatous team that has flexibility to get stuff done but has clear objectives and timelines. Guidance from the boss should be the high level goals and objectives not micro-managed tasks and rigidly defined parameters. Doing this allows innovators to chart their own course while still having some guidance.


Failure is Always an Option

Innovation is full of failure. So much so that most people can't stomach the constant setbacks and uncertain future. The ideal culture for innovators is one that embraces failure, learns from it and moves on. This culture will always out innovate a punitive structure where everyone is afraid to make one little screw-up. The other vital cultural trait is one where intellectual curiosity is encouraged, especially outside the companies field of endeavor. More innovative ideas have come from cross-over problem solving (i.e. Taking a solution from another industry and applying it to something else), then just staying within your companies comfort zone.


Bonuses Don't Work

The journey is the incentive for innovators to invent. No other incentive is as strong or as effective as working on a challenging problem that you enjoy. In fact, the open source movement has taught us that creative people will work for free and give away their work product for something they find interesting. The organization can apply these incentives by giving innovators a support and recognition network that allows them to invent, be recognized and feel respected. The only monetary bonus that seems to work is one that treats everyone the same (e.g. The janitor to the CEO gets 'the same bonus'). Anything other that than, is ripe for gaming and defeats the purpose of incentives.


Rugged, Yet Refined

Free range innovation is all about respecting the rugged innovator that takes on the world yet still delivers products to market. It's the realization that innovation takes flight when you give creative people the space to move, explore and grow. No fancy organizational structure, no complex cultures and no silly incentives - just smart teams, building innovative products by driving their ideas to market the way the range tell them too.


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Jarie Bolander is an engineer by training and an entrepreneur by nature. Jarie blogs about innovation, management and entrepreneurship at The Daily MBA and has recently published his first book, "Frustration Free Technical Management". You can also follow him on Twitter @thedailymba.