The Performance Paradox

by Stephen Shapiro

Every leader dreams of finding the magic bullet that will increase creativity, boost productivity, and improve morale. Surprisingly, one of the most effective solutions may be the most counterintuitive: sometimes less effort, not more, yields optimal results.


Keep Your Eye on the Present

A few years ago, I worked with a Formula One racing team. Pit crews, consisting of 19 people, serviced the ultrafast, high-tech race - refueling cars, changing tires, and performing required maintenance in a matter of seconds. The crew members continually shifted positions to find the best combination for the optimal configuration of the team. As they practiced, they used a stopwatch to measure their time to milliseconds. Yet, ultimately, no matter how hard they tried, they couldn't work any faster. They had hit their performance plateau.

Then, they tried a new approach. They decided not to concentrate on their time, but on their style instead. Now, their movements became more significant than their speed. Astonishingly, the crew shaved several tenths of a second off their best time, even though they "felt" they were moving more slowly. This experiment reinforces the concept that the more you focus on your goals, the less likely you are to achieve them. By worrying about the future, you take your eye off the present.

In higher intellectual activities, the results are even more pronounced. Take the true story of a high school student who became increasingly anxious over passing her upcoming final exam in math, always her weakest subject. She studied hard, all the time focusing on her goal of passing her exam. In spite of her efforts, she failed. She pleaded with her teachers to give her one more chance. They did. This time, instead of concentrating on the goal, she used a powerful creativity technique.

Her first conscious thought each day when she awoke was to visualize herself as Condoleezza Rice, the U.S. Secretary of State, a very successful, highly educated woman. Dr. Rice wouldn't worry about a high school math exam, right? By imagining she was someone else, she stopped agonizing and gained more confidence daily. By focusing on the present rather than the result, she scored a 93%, her greatest performance with less effort.


Dare to Be Different

Does this also apply to sales? Can we perform better when we don't focus on our sales goals? A woman's clothing store had a competition to determine who among its employees could sell the most in two months. The winner would receive a bonus and, possibly, a raise. All had their eyes on the prize, except for one sales rep who decided on a different approach. Instead of trying to make a sale, she zeroed in on serving the customer. If a customer needed help for eight hours to pick out a blouse, that's what she would do. If she felt customers would find a better product at a competitor, she would send them there. After two months, this sales person who was not trying to make sales outsold everyone else by a significant margin.

We have seen similar results in many sales and service organizations. We all know (and believe) the expression, "You get what you measure." But a serious question arises: will you get what you want? Often, targets and goals create stress and dysfunctional behavior.


Less Motivation, More Performance

The concept of reducing goal-obsession to improve performance is not new. In the early 1900s, Robert Yerkes and J.D. Dodson developed the eponymous Yerkes-Dodson Law. The premise is performance increases relative to motivation only to a point, after which performance drops. Typically, it is drawn as an inverted U-shaped curve.

If you lack motivation, the result is low performance. This is not surprising. As your motivation increases, your performance increases - to a point. This point is the sweet spot of optimal performance. Then, as you become more goal-obsessed, performance paradoxically decreases. Goals increase stress and cause you to fixate on the future rather than the present.

Yerkes and Dodson suggest that different tasks require different levels of motivation. For example, physically demanding tasks often require higher levels of motivation. This explains why professional athletes are inclined to be very goal-driven. Even so, as demonstrated by the pit crew example, too much goal orientation will hurt even athletic performance. In 2004, the New England Patriots broke the records for the longest winning streak in NFL history - 20 games in a row. At a press conference after the game a reporter asked the team's coach, Bill Belichick, to comment on this winning streak. He replied, "We did not have a 20-game win streak. We had 20 one-game win streaks." His philosophy was for the team to play each game to the best of its ability. Setting your sights too far ahead is a sure recipe for failure.


Creativity Has its Own Rewards

Within the business world, Yerkes and Dodson found that intellectually challenging tasks required lower levels of motivation. The more creative the work, the less motivation required to hit peak levels of performance. Studies reveal that creativity diminishes when individuals are rewarded (externally motivated) for doing their work. Why? The desire to achieve the goal overtakes the personal interest in the endeavor. A myopic focus on the outcome overshadows the intellectual stimulation of the process. As a result, risk taking becomes reduced and creativity vanishes.

"Working hard" may not be the best way to improve productivity and creativity. Maybe it isn't even "working smarter." As we have seen, perhaps the answer lies in trying less. Or maybe it can be found in understanding human behavior and motivation, as illustrated in the following studies.


Your Loss Could Be Your Gain

Which magazine do you think American men are more likely to buy?

• A men's health magazine with the cover, "Lose Your Gut Fast" or
  
• A similar magazine with the cover, "Get Six-Pack Abs"?

Although most people intuitively think that the second cover, "Get Six-Pack Abs," is the sure winner, when a magazine did such a comparison, it found that "Lose Your Gut Fast" sold six times more copies. Why? The answer lies in the three requirements for individuals (or an organization or a society) to change:

1. They must be dissatisfied or uncomfortable with the current situation.
   
2. They must foresee a better future.
   
3. They must believe that they can reach that better future with a reasonable amount of effort.

Point #3 is critical. Using the "gut" example, when someone is 20 pounds overweight, as are many Americans, six-pack abs may be desirable yet seem inconceivable. It's just too much work, and the likelihood of success seems poor. Only when your gut is gone will the idea of six-pack abs seem like a possibility. Similarly, only when your organization is a lean, mean fighting machine will people embrace longer-term, strategic visions.

A question I ask when I address my audiences illustrates this concept further: "Which would you choose?":

• Option 1: A guaranteed gain of $75,000 or
  
• Option 2: An 80% chance to gain $100,000 with a 20% chance of getting nothing?

Seventy-five percent of audience members choose Option 1, consistent across all groups, regardless of demographics. People are risk averse when it comes to increasing gains. What would you choose if I worded the question as a loss rather than as a gain?:

• Option 1: A certain loss of $75,000 or
  
• Option 2: An 80% chance of losing $100,000 with a 20% chance of not losing anything

Over 80% of my audiences choose Option 2. People will take risks to reduce their losses. This explains why the status quo often wins over change. Although there may be a benefit in changing, the risk of losing what you already have is too great.

People will take great risks to minimize their pain/losses yet play it safe when the option is to increase their pleasure/gains. When your organization's change plans are utopian visions of a grandiose future, your employees move to the far end of the performance curve: high motivation, low performance. They become cynical about success and feel as though you are not addressing their current pains and frustrations. Instead, fix immediate problems first, then move on to more strategic visions.


The Bottom Line

To create a pervasive culture of innovation, you must first create an environment of performance and motivation. Achieving this is often, paradoxically, the result of less, not greater, effort. Although goals and performance targets are useful tools, they can also have a detrimental impact on results. When people are too future-fixated, their creativity and overall performance diminish. Find the sweet spot of optimal performance, and you will undoubtedly see an increase in employee productivity, creativity, and satisfaction - all with less effort.


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Stephen Shapiro is the author of three books, a popular innovation speaker, and is the Chief Innovation Evangelist for Innocentive, the leader in Open Innovation.

Open Innovation Side Effects

by Stefan Lindegaard

Open innovation will not only lead to new ways of making innovation happen. Innovation leaders and their executives will also experience side effects. I think most of these effects will be positive, but some will be mixed or perhaps even negative.

As innovation leaders and their executives implement open innovation practices, they can just as well start figuring out how to deal with side effects of open innovation such as described below:

• Open innovation is very much about managing change. If a company can handle the change process related to implementing open innovation, then they have learned valuable lessons that can be used in change management situations. In the current and future business climate, I think everyone should appreciate working in an organization that is agile and prepared for changes.


• Often, the biggest enemy of innovation is the company itself as the company begin to focus more on its needs than the needs of the market. When you begin to innovate with partners, you will see that these partners either focus on their own needs - and then innovation will definitely fail - or you will see that they come together and funnel their resources towards a market need. If the latter happens, then you have a great chance to succeed with innovation. Pressure from external partners can shift awareness from internal needs to market needs and this move can be helpful beyond the innovation process.


• Open innovation can bring along new organizational structures. As open innovation becomes the way to innovate, the functional/divisional or matrix organizational structures as we know today will change - or perhaps even break down. I am not sure what will be next...


• Open innovation will be one of the key drivers in bringing in new types of communication tools into the organization. Think LinkedIn, Twitter and Facebook. Once the initial resistance has been defeated, this can benefit many business functions.


• Customers are one of the first places to look for external input. Although, there are dangers involved in listening to customers when it comes to innovation, the increased focus on customers can lead to better relationships with them. This can change the role of sales and marketing units as they need to get even more involved in innovation.


• At a recent open innovation conference, Cisco said that they are trying to move from a culture of competition to a culture of shared goals. This was by large driven by a desire to make innovation happen with external partners. There is much talk on changing the not-invented-here culture, but perhaps open innovation will drive even more corporate culture change.


• As you work with external partners, you are exposed to other ways of getting things done. You bring diversed thinking into the organization. This can make you consider whether your current practices are good enough, whether you have to adjust these or perhaps even develop new next practices for your organization. An example: You get new perspectives on collaboration. Perhaps this can inspire to better interaction and collaboration between business units.


• Overall creativity as well as overall complexity increase with open innovation. The increased number of actors provides new ways for people to be creative. This can also increase the level of complexity, which is also driven by fact that the organization is no longer itself in control.

Let me know what you think of this and please share your own views.


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Stefan Lindegaard is a speaker, network facilitator and strategic advisor who focus on the topics of open innovation, intrapreneurship and how to identify and develop the people who 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.

Controlling Innovation

by Jeffrey Phillips

I guess I'll never fully understand the depth of concern that many management teams have around command and control, especially in an era of constant change. It seems that the more demands are placed on an organization to create new products and adapt to environmental change, the more resistance to that change is created and encouraged at mid and senior management levels. I understand that what's "known" is comfortable and what's unknown and new is uncomfortable, but at some point every firm has to create some new products or services or it will simply atrophy.

Recently I've witnessed what I'll call "innovation in a bottle". That is, a relatively successful innovation effort that the management team approved and blessed spawned interest in innovation across the organization. People in other business units and geographies wanted to know more, and learn more, about innovation and the successful work that was done. We on the project team viewed this as a good thing - a successful innovation effort being recognized as such. It was clear that many people wanted to understand the tools and process, and implement that kind of thinking in their lines of business.

Except that the management team viewed all of that energy and excitement with concern. Why was everyone so excited? Why was everyone so interested in innovation? Yes, the recently completed project had created very valuable insights and compelling new products and services, but the intent was for that group only. I think, in hindsight, that the management team intended not for a widespread innovation effort for the firm, but a more narrowly targeted new product discovery effort for one line of business. When that effort succeeded, and other lines of business wanted to learn more and duplicate the effort, the genie was at risk of leaving the bottle, and that caused concern for the management team. After all, if several lines of business started innovating, the amount of change in the business could be dramatic.

I don't think most firms can be successful keeping innovation in a bottle - limiting it to very specific product lines or geographies. If the innovation work is done well, it will produce great results and those results will be noticed. Leaders in other organizations will want to copy the work and develop new products and services for their customers. Successful innovation is contagious, and to think the management team can limit innovation is part and parcel with command and control thinking. Yes, an executive team can control innovation, by limiting resources and stopping projects, but once the value of the methods and tools are seen, it will be hard to keep that lightning in a bottle. And probably counterproductive to do it as well.

Here's the takeaway: If your firm seeks innovation and is willing to commit to do it well, expect that with any successful effort that more and more people within the firm will want to learn more and duplicate the work in their own departments. This should be a good thing, but can be viewed negatively by an executive team worried about control. What they don't recognize is how fast the world is changing and how great the demand is for new products and services. I don't think you can keep innovation in a bottle, and I doubt it's a good idea to try.

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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 Strategy - Fight the Fear of Change

by Paul Sloane

People are naturally apprehensive about change. They fear the unknown. There is a reluctance to take risks. This can be particularly true in a successful enterprise. Success can be an enemy of innovation. Why mess with a model that works? There is little incentive to take risks and try new things. But even successful companies are at risk if they stand still. Polaroid Corporation was a leader in its field but digital camera technology dealt it a serious blow and pushed it into Chapter 11. Smith Corona was very successful making typewriters but the advent of word processors proved fatal.

Overcoming the fear of change is a key objective for innovative leaders. They will need to take this issue head-on. They must engage people in a dialogue and discuss the risks and benefits of standing still or of innovating. The types of messages they strive to convey are:

• We are doing well right now but we need to do better


• We must fight the risk of complacency


• If we don't find new ways to reach and delight our customers then others will do it for us


• There is a risk in innovating but there is a bigger risk in standing still


• Change can be a big positive for us if we can drive it in the direction we want

Leaders must promote a dialogue where, in addition to telling these messages, they listen to people's concerns and solicit their input. You can turn negative people around by asking for their views on how to make things better. When asked, they will often volunteer great ideas for how we can make the change a big success.

Here are some tools you can use in the battle to win the hearts and minds of your people:

• Stories about companies that focussed on what they did well and who missed the next big wave


• Examples of how we lost business to more innovative competitors


• Examples of how we won business by doing something new


• Praise for risk-takers and entrepreneurs within the business who have helped to drive change - successfully or unsuccessfully

Innovation involves taking risks, changing things that work and coping with failures. Many people find it an uncomfortable journey. It can be a very bumpy ride but the alternative is to stay in the same place and slowly wither.


Conclusion

Innovative leaders constantly evangelize the need for change. They replace the comfort of complacency with the hunger of ambition. We are doing well but we cannot rest on our laurels - we need to do even better. They explain that while trying new ventures is risky standing still is riskier. They must paint a picture that shows an appealing future that is worth taking risks to achieve. The prospect involves perils and opportunities. The only way we can get there is by embracing change.

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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.

Managing Your Innovation Gap

by Drew Boyd

Once you have a systematic and routine way to innovate, you are confronted with a new problem - how to decide how much innovation is enough. For many, this is an odd question. If innovation is essential for survival and growth, most people would want all the innovation they can get. But that is oversimplifying. Too much innovation can overload the system, confuse the organization, and lead to ideation fatigue. So how much is enough?

Here is a useful analysis that can tell you how many ideas are needed to reach your specific growth targets called "Mapping the Innovation Gap."

The steps are:

1. Determine your revenue goals in each year over a specific time horizon. Base this on your firm's strategic planning time horizon (usually 3 to 10 years depending on the industry). Use the actual revenue targets from your company's business plan.


2. Break these annual revenue targets down over a mix of products, new and existing, in each year. Some firms call this a revenue cascade or revenue waterfall. It shows for each year how much of the revenue comes from existing products and how much comes from new products.


3. Estimate your Innovation Yield (number of new ideas needed to produce one new product). This varies by industry and by company depending on factors such as level of investment, core competencies, and access to technology. Various think tanks and consultancies have estimates such as the curve pictured above.


4. Estimate your typical idea-to-launch Lead Time (how much time it takes to develop and launch a product once it is conceived). As with the Innovation Yield, this will vary. Take a look at past product development experience and determine an average time (in years).


5. Plot the number of new ideas needed in each year to produce the necessary new products in subsequent years. Take the number of new products needed in a specific year and divide it by the Innovation Yield. Then plot this number back in time by the amount of Lead Time to develop ideas.

What you end up with is the number of new ideas that need to be generated each year to have a realistic chance of achieving future revenue growth targets. It can be a sobering number depending on how aggressive your targets are. With this number, a general manager can then task the team to "schedule" innovation, and then hold them accountable for generating the necessary number of ideas.


Bottom Line: To grow, companies need a systematic innovation method, and it needs to be applied systematically.


Download "Mapping the Innovation Gap" here.

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Drew Boyd is Director of Marketing Mastery for Johnson & Johnson (Ethicon Endo-Surgery division). He is also Visiting Assistant Professor of Marketing and Innovation at the University of Cincinnati and Executive Director of the MS-Marketing program. Follow him at www.innovationinpractice.com and at http://twitter.com/drewboyd

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.

The Impact of Trends on Business

by Mike Myatt

Today's post was inspired by a witty piece authored by Wally Bock on the topic of fads. If you're not familiar with Wally's work, I'd recommend checking him out on a regular basis. When you looked beyond the humor, Wally made some great points about the impact (or lack thereof) of the latest fads, trends, business theories, gimmicks, concepts conveyed in business books, etc. Trends have a significant impact on business. Does your business exploit trends or do they exploit your business? What was the latest fad chased or trend adopted by your business? Why did your management team jump on the band wagon? Has the trend or fad generated an increase in revenue or gains in efficiency and/or productivity? In today's blog post I'll examine the impact trends can have on your business.

Let me also point out that trends and fads don't necessarily constitute innovation. In fact most often the organizations that demonstrate a "herd mentality" when rushing to adopt the latest trends are the farthest thing away from being innovative. The result is that they will likely experience little more than yet another in a long line of great adventures that ended in frustration due to the time wasted and the investment squandered. The reality is that many businesses are quick to recognize great ideas, but they often have no plan for how to successfully integrate them into their business model.

My advice to you is not to let your business get caught up in trends and fads, at least not without some initial analysis being conducted to determine the likelihood of success. Failed initiatives are costly at several levels. Aside from being costly, a flawed execution can cast doubt on management credibility, have a negative impact on morale, taint the brand, adversely affect external relationships and cause a variety of other problems for your business.

Every sound business initiative begins with a solid strategic plan. However while most anyone can cobble together a high level strategic plan, very few can author a strategy that can be successfully implemented. In order for your enterprise to turn a trend or fad into a monetizing and/or value creating event you should develop a strategic plan that attempts to measure the idea against the following 15 elements:

1. The trend or fad should be in alignment with the overall vision and mission of the enterprise.


2. If the initiative doesn't provide a unique competitive advantage it should at least bring you closer to an even playing field.


3. Any new project should preferably add value to existing initiatives, and if not, it should show a significant enough return on investment to justify the dilutive effect of not keeping the main thing the main thing.


4. Put the idea through a risk/reward and cost/benefit analysis.


5. Whether the new initiative is intended for your organization, vendors, suppliers, partners or customers it must easy to use. Usability drives adoptability, and therefore it pays to keep things simple.


6. Just because an idea sounds good doesn't mean it is You should endeavor to validate proof of concept based upon detailed, credible research.


7. Nothing is without risk, and when you think something is without risk that is when you're most likely to end-up in trouble. All initiatives should include detailed risk management provisions.


8. Adopting a trend or fad should be based upon solid business logic that drives corresponding financial engineering and modeling. Be careful of high level, pie-in-the-sky projections.


9. Any new initiative should contain accountability provisions. Every task should be assigned and managed according to a plan and in the light of day.


10. Any trend being adopted must be measurable. Deliverables, benchmarks, deadlines, and success metrics must be incorporated into the plan.


11. It must be detailed and deliverable on a schedule. The initiative should have a beginning, middle and end.


12. Strategic initiatives must not be disparate systems, but integrated solutions that eliminate redundancies, and build in tactical leverage points.


13. It must contain a road-map for versioning and evolution that is in alignment with other strategic initiatives and the overall corporate mission.


14. A successful initiative cannot remain in a strategic planning state. It must be actionable through tactical implementation.


15. Senior leadership must champion any new initiative. If someone at the C-suite level is against the new initiative it will likely die on the cutting-room floor.

The bottom line is that new ideas are beautiful things. Properly implemented, capitalizing on trends can keep business from stagnating and cause growth and evolution. Just follow the 15 rules above and stay away from being an agent for change for the sake of change.

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

Will Your Strategy Kill Your Company?

by Rowan Gibson

Many companies once believed - and some of them evidently still do - that business models were essentially immortal. The prevailing attitude was that while product portfolios might need to be refreshed every now and again, successful strategies would remain successful for the rest of time. Shell would suck oil out of the ground, General Motors would make cars, Xerox would make copiers, and that's the way it would always be.

In a world where nothing much changed - or where things changed very slowly - the assumption was that a company could pretty much do the same thing forever. Innovation therefore became a calm, unhurried exercise in developing "new and improved" versions of existing products, funding ongoing technical research and filing industry patents. How many firms thought there was ever going to be a need to innovate more deeply and more strategically - at the level of the business model itself? Or to fundamentally rethink and re-earn their company's right to exist on a year by year basis?

Go back a few decades and the focus was generally on developing increasingly efficient processes for delivering more of the same. But, today, with the sheer underlying speed of change in the external world, "more of the same" can very quickly lead to strategic obsolescence.

For some companies, it's a technological discontinuity that causes all the trouble. This is what happened to Wang in word processing, and to Atari, and later Sega in videogames, when the next wave of technology superseded the old. The same fate befell Schwinn, the original leaders in the U.S. bicycle market, when their business was destroyed by the disruptive advent of the mountain bike. Remember, too, that the venerated Encyclopedia Britannica was knocked off its proud pedestal almost overnight by something as banal as Microsoft Encarta, when a simple CD-ROM displaced a shelf-filling set of printed volumes.


"What got you where you are today is seldom what will keep you there."


For other firms, the disruption might come from a market discontinuity. Suddenly, they find themselves facing new and very aggressive competitors who have a more effective business model than they do. Remember Xerox in the early 80s, for example. The company didn't even notice the threat from the Japanese until its earnings dropped 50% in one year alone - 1982. Or it could just be a sudden shift in consumer tastes. In the U.S., for example, Krispy Kreme doughnuts were doing just fine until lowcarb diets reshaped the food industry. That's how quickly and mercilessly the market can change.

These days, strategies can have a very short shelf life. Their underpinnings are being regularly shaken and they die much more quickly than in the past. "This company will be going strong 100 and even 500 years from now," said C. Jay Parkinson, president of U.S. based Anaconda Mines - just three years before Anaconda was bankrupt.

The bottom-line message here is that linear thinking is useless in a nonlinear world. The things that got your firm where it is today are seldom going to be the things that will keep it there. The challenge, therefore, is to routinely consider the unthinkable - to regularly rethink everything about your company and the business you are in, even when things appear to be going well. To illustrate the point, Meg Whitman, president and CEO of eBay, holds strategy meetings not once or twice a year - but several times each week!

Quite frankly, the line between success and failure has never been finer. Hence the imperative to continuously reinvent your success with radical new product concepts, new ways of doing business, new markets, new capabilities, new customers and new sources of profit. Unless you are taking deep, strategic innovation very seriously, your company's days might already be numbered.

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Rowan Gibson is a global business strategist, a bestselling author and an expert on radical innovation.

Leading Change Isn't Hard

by Mike Myatt

Is leading change difficult? Only if you don't know what you're doing. As much as some people want to create complexity around the topic of leading change for personal gain, the reality is that creating, managing and leading change is really quite simple. In fact, catalyzing and leading change isn't very daunting at all if you understand a few key principles. To prove my point, I'll not only explain the entire change life-cycle in three short paragraphs, but I'll do it in simple terms that anyone can understand...

1. Identifying the Need for Change

The need for change exists in every organization. Other than irrational change solely for the sake of change, every corporation must change to survive. If your entity doesn't innovate and change with market driven needs and demands it will fail...it's just that simple. The most complex area surrounding change is focusing your efforts in the right areas, for the right reasons, and at the right times. The ambiguity and risk can be taken out of the change agenda by simply focusing on three areas:

1. Your current customers...what needs to change to better serve your customers?


2. Potential customers...what needs to change to profitably create new customers?


3. Your talent and resources...what changes need to occur to better leverage existing talent and resources?

2. Leading Change

You cannot effectively lead change without understanding the landscape of change. There are four typical responses to change:

1. The Victim


• Those that view change as a personal attack on their persona, their role, their job, or their area of responsibility. They view everything at an atomic level based upon how they perceive change will directly and indirectly impact them.


2. The Neutral Bystander


• This group is neither for nor against change. They will not directly or vocally oppose change, but neither will they proactively get behind change. The Neutral Bystander will just go with the flow not wanting to make any waves hoping to perpetually fly under the radar.


3. The Critic


• The Critic opposes any and all change. Keep in mind that not all critics are overt in their resistance. Many critics remain in stealth mode trying to derail change behind the scenes by using their influence on others. Whether overt or covert, you must identify critics of change early in the process if you hope to succeed.


4. The Advocate


• The Advocate not only embraces change, they will evangelize the change initiative. Like The Critics, it is important to identify The Advocates early in the process to not only build the power base for change, but to give momentum and enthusiasm to the change initiative.

Once you've identified these change constituencies you must involve all of them, message properly to each of them, and don't let up. With the proper messaging and involvement even adversaries can be converted into allies.


3. Managing Change

Manging change requires that key players have control over four critical elements:

1. Vision Alignment


• Those that understand and agree with your vision must be leveraged in the change process. Those that disagree must be converted or have their influence neutralized


2. Responsibility


• Your change agents must have a sufficient level of responsibility to achieve the necessary results


3. Accountability


• Your change agents must be accountable for reaching their objectives, and


4. Authority


• If the first three items are in place, yet your change agents have not been given the needed authority to get the job done the first three items won't mean much

You must set your change agents up for success and not failure by giving them the proper tools, talent, resources, responsibility and authority necessary for finishing the race.

There you have it; in three short paragraphs I've given you the formula for change, and the question now becomes what will you do with it?

If you're interested in reading more about change feel free to read the following posts:

1. Don't Fear Change - Embrace It
2. Time for a Disruptive Business Model?
3. Great Ideas Aren't Innovation
4. Creating Innovation Metrics

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

What Next?

by Rowan Gibson

It's not just a good question. It's THE question. Think about the sheer speed of change in the external world. Think about the intensity of global competition. Think about the bargaining power of today's customers. Then think about your company. How much of your business model has remained essentially unchanged for, say, five years or more? When was the last time you fundamentally overhauled your competitive strategy? How fast are you currently renewing your products and services?

In a world where what you do now can quickly lose its value and become irrelevant, the issue is increasingly what you do next. What makes or breaks you in the new Innovation Economy is whether you're capable of continually rethinking and reinventing your company - and your industry - as fast as the world is changing around you.

Thinking about "What next?" is a difficult challenge. Most of us are having a hard enough struggle trying to keep up with "What now?" Here's why: in the time it took you to read those two sentences, somebody - somewhere on this planet - added some new bit of change to the world of business. Sure, that contribution could be just a ripple on the ocean. But it could also turn into a tsunami.

To illustrate the point: MySpace went from 0 to 100 million users in just 3 years. In 2000, nobody had heard of podcasting. Today, there are more podcasts worldwide than radio stations, and circulation is growing at 20% per month. In fact, there are ten times more podcasts available online than DVD titles. Or consider Blogs. They were nowhere a decade ago. Now there are well over 60 million Blogs online, and 75,000 new Blogs are created every single day (that's about one a second). Many companies are already using these new forms of media - social networking sites, podcasts and Blogs - to reach out to customers and attract new talent. That's how fast things are changing. You blink and you miss it.

The message here is that you can't stand still in world that is moving at light speed. As the pace of change and of business accelerates, the pace at which you develop foresight about industry evolution, about incipient trends and about new technologies - and the pace at which you invent new products, services, strategies and business models - must accelerate accordingly. There is no option B.

Look around the world today and we see entire industries whose business models have gone belly up. Is it because the companies in those industries didn't see change coming, or is it because they chose to ignore it? In many cases, managers sit in denial for years and wait for their companies to go through a near-death experience before they wake up to the need for rethinking their core business strategy.

Ask yourself: is our organization already committing enough energy to innovation and strategic renewal? Will we be overtaken by what's next or will we create it? Could our senior executive team clearly articulate the three to four strategic ways in which we intend to reinvent our company and our industry over the next few years?

Organizations typically devote most of their energy to improving what they are already doing, rather than to learning about the future and creating what's next. Whenever this happens, a company is living on borrowed time.

What we need to do is siphon away some of the time, effort and bandwidth that usually go into execution, and reallocate it to understanding deep change and to generating new ideas and opportunities for growth. We need to put learning, creativity, and innovation at the top of the business agenda.

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Rowan Gibson is a global business strategist, a bestselling author and an expert on radical innovation.

Don't Fear Change - Embrace It

"Leading Change" is clearly more difficult than arriving at the realization that change is needed... If you want to validate the prior statement reflect back on all of the "change agents" that have crossed your path over the years and ask yourself the following question: How many of them have truly succeeded?

While we've heard a lot about change of late as it relates to our current political landscape, the power of real change is trivialized when it becomes little more than a political sound-bite. Change - it can either be your best friend or your worst nightmare. Change got President Obama elected, and it may well end-up being the root of his political demise. Nobody ever said change was easy, but I'm here to tell you that change is essential. In today's blog post I'll discuss why CEO's and entrepreneurs (and not just politicians) need to become masters at catalyzing and leading change.

While there is little debate that the successful implementation of change can create an extreme competitive advantage, it is not well understood that the lack of doing so can send a company (or an individual's career) into a death spiral. Companies that seek out and embrace change are healthy, growing, and dynamic organizations while companies that fear change are stagnant entities on their way to a slow and painful death.

Agility, innovation, disruption, fluidity, decisiveness, commitment, and above all else a bias toward action will lead to the creation of change. It is the process of change which results in evolving, growing and thriving companies. Much has been written about the importance of change, but there is very little information in circulation about how to actually create it.

While most executives and entrepreneurs have come to accept the concept of change management as a legitimate business practice, and change leadership as a legitimate executive priority, in theory, I have found very few organizations that have effectively integrated change as a core discipline and focus area.

Leading change is certainly not without risk, but if implemented properly it can breathe life back into the most tired business. So, why is it that so many established companies struggle with the concept of change?

Many times it is simply because companies have been doing the same things, in the same ways, and for the same reasons for so long that they struggle with the concept of change. Consider the modern workplace... In executive circles, leaders often talk about employees who are not on-board, resist change, and are reluctant to try new things. And among the ranks of employees, conversations that take place in the hallways and break rooms often center around whether or not executives really know what they're doing, and whether the newest change initiative is just a passing fad. Actually, these reactions are reasonable, given the pace that change is occurring in most of organizations.

One of my contentions about why change is difficult to implement is that too many executives want perfection to proceed action, and the truth is that the pursuit of perfection is one of great adversaries of speed. In fact, at the risk of being controversial I'm going to take the position that perfection does not exist. I hate to break it to you, but those of you who regard yourselves as perfectionists simply exhibit perfectionist tendencies in an unrealistic attempt to achieve what cannot be had. The pursuit of perfection does not result in an increase in quality, but it will result in time delays, cost overruns, missed deadlines and unmet commitments. I would suggest that rather than seeking what cannot in most cases ever be achieved, that it makes more sense to seek the highest standard of quality that makes economic sense relative to the constraints of an ever shifting marketplace.

One of the key considerations that must be understood when implementing change is the necessity of moving quickly. There are those that would argue that speed is synonymous with undisciplined decision-making, but I would caution you against confusing speed with reckless abandon I'm a big proponent of planning, assessment, analysis and strategy, but only if it concludes in a timely fashion. "Analysis Paralysis" leads to missed opportunities and failed initiatives.

Earlier in my career I served as Director of Internet Strategy for what was at that time the world's largest web-enablement firm. While serving in that position I coined the term "e-velocity" which we trademarked and used to describe the influence that technology was having on the pace at which business had to be conducted in order to remain competitive. It used to be acceptable to take 12 to 18 months to roll-out an initiative, but in today's world you better be able to do it in 90 days or it will be obsolete before it gets to market.

When I first started in business it was usual and customary to produce 5 and 10 year business plans and today I work off a rolling 90 day tactical business plan. The latest advances in Business Process Management (BPM) have seen a reduction in the planning and budgeting cycle from 120 and 90 days to 45 days. But, is 45 days good enough? How many days constitute a responsive cycle time? Many believe the right number is between 5 and 10 days. Why is cycle time reduction important? Because shorter planning and budgeting processes facilitate greater flexibility and responsiveness.

In today's competitive business environment you must quickly be able to assess risk and make timely decisions. You cannot be successful when guided by fear and hesitation. When in doubt, remember that "Speed Kills" and that "he who hesitates is lost." Don't fear change... embrace it. I think General George S. Patton said it best: "A good plan violently executed today is far and away better than a perfect plan tomorrow."

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