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Friday, April 30, 2010

How Many Futures Are You Considering?

by Holly G. Green

How Many Futures Are You Considering?Have you ever noticed how when people talk about what lies ahead we always say the future? As if there is one, and only one, immutable future that will come to pass.

Fact is, there are an unlimited number of possible futures, and it's up to us to create the one we want. This is especially true when engaging in strategic planning.

Many leaders and managers mistakenly see strategic planning as a process of predicting the future. In reality, it's a process of creating the future, one that will provide ample rewards to the organization and all its stakeholders. Assuming that only one future exists can lock us into a course of action that may not serve our organizations well.

Despite the dangers, it's easy to see how we fall into the pattern of thinking there is only one future.

We start out by investing a lot of time and energy in crafting a strategic plan, which is nothing more than a blueprint for achieving a certain destination at some point in the future. In other words, we write a plan for creating the future we want. Once the plan is finalized and in place, we then devote all our organizational resources toward achieving that future exactly as planned.

The problem is that strategic plans never unfold exactly as written. The world simply doesn't work that way. Too many factors, both internal and external, are involved for any plan to unfold without some degree of change along the way.

But instead of making adjustments in response to changing circumstances, many leaders insist on sticking to the plan as written. They either see the changes as temporary blips to be ridden out. Or, more often, they get too locked into the future as spelled out in the plan, and fail to respond to significant changes in markets, customers and global conditions.

How can you avoid falling into the single-future trap?

Start by automatically assuming that your market is constantly changing (it is!), and monitor it on a regular basis. Then develop a formal process for managing your strategy.

Select a time, preferably once a month but no less than once a quarter, to review your strategy. During the meetings, identify any changes in your environment, review how your strategy is unfolding compared to how you thought it would, and make any necessary adjustments to the plan.

When monitoring the environment, pay close attention to uncertainties. For example, what assumptions are you making about your markets and customers, and are they still valid? What are your customers and suppliers uncertain about? What are their customers and suppliers uncertain about?

When reviewing your strategy implementation, ask questions like: What has changed, internally or externally, that might alter or undermine our strategy? Is our strategy working as expected? Are we executing correctly? If not, what do we need to refine or change in order to get back on track?

If envisioning multiple futures seems like a waste of time, consider the current plight of Toyota and General Motors. Do you think Toyota envisioned a future where they would face $16 million dollar fines and billions of dollars in lawsuits? Did GM imagine that one day they would need a massive government bailout to keep from going out of business?

Certainly they did not plan those outcomes. Yet they happened anyway. We can only wonder where Toyota and GM might be today if they had taken the time to consider many different futures rather than just the one where they reign as unchallenged market leaders.

When thinking about possible futures, I'm always reminded of the old Star Trek show (yes, I am a closet Trekkie) where the crew members of the Enterprise used a 'holodeck' to act out various possible scenarios. Obviously we don't have the technology (yet) to create fantasy simulations of that caliber.

But I would suggest that leaders and companies strive to create virtual holodecks in the minds of all employees so that they practice thinking and considering on a regular basis. Help people get in the habit of pondering what seems unreasonable, impossible or even incredulous. That way, when sudden market changes throw your strategic plan for a loop, you won't get stuck following a plan of action that no longer makes sense.

The future always seems to get here sooner than we expect. The question for business leaders is, "Which one will it be... One you created or one you have to deal with?"

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

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Monday, April 26, 2010

Crossing the Re-invention Gap - Newspapers

by Adam Hartung

Crossing the Re-invention Gap - NewspapersIs news dying, or are newspapers dying? That's a critical question. Most of us know the demand for news is not dying - and if you needed reinforcement a recent McKinsey & Company study verified that the demand for news has increased (McKinsey Quarterly "A Glimmer of Hope for Newspapers"). And a lot of the increase comes from people under 35 who are escalating their news demands. Of course, most of this increase is coming from the web and mobile media.

Too often, however, we don't see our business growing. Instead, Lock-in to old definitions make us think our business is shrinking when it is actually doing the opposite! And that's the Re-invention Gap. Manufacturers of small printing presses said demand was declining in the 1970s, when in fact demand for copies was exploding. Only the explosion was from xerography instead of presses. So A.B. Dick and Multigraphics, small offset press manufacturers, went out of business when demand for the output of their product was exploding! The market shifted, but it kept growing, and they missed the shift.

Today we see this behavior in most news publishers. Those who print newspapers and magazines are talking about how horrible business is. Only the demand for news is growing more quickly than ever. It's just not demand for print, which arrives too late for many customers. And because print is too slow a distribution method for these customers, advertisers are abandoning print as well. But only if you're Locked-in to printing do you say the market is horrible. Because with demand for news growing, if you reposition yourself to serve the growing part of the market you should say business is great!

Tribune Corporation, owner of The Chicago Tribune newspaper is still in bankruptcy. And its future relies entirely on how well it will serve the needs of on-line news readers. According to Crain's Chicago Business, in "Former Sports Editor Bill Adee Steers Chicago Tribune's On-line Strategy" print advertising revenues fell by 9% versus last year in the most recent quarter. And according to a quoted investment banker, nobody would have much interest in the value of a print newspaper. That business is destined to keep declining.

But simultaneously the volume of on-line ads tripled! And that's what a business has to do to cross its Re-invention Gap. It has to move from the old business into the new business - from the declining elements of its business into the growth elements.

What most businesses do wrong is try to apply their old business model to the new business. The old Success Formula has Lock-ins to metrics, schedules, processes, frequent decisions, decision-makers, strategic plans, etc. which the leadership tries to apply to the new business. For example, most newspapers are used to selling ads for several thousand dollars, based upon the number of subscribers. These are pretty large price points. But on-line, ads are sold per page view or per click. Now we're talking pennies sometimes. And to make money, you have to get a lot of views. Likewise, newspapers work on a 24 hour cycle of news accumulation and publishing, whereas the internet is 24x7 with the opportunity to change headlines and what's reported continuously. If a newspaper tries to apply the old Success Formulas related to sales, pricing and editorial process they fail.

And that's why crossing the re-invention gap requires a big Disruption. You have to get the organization to understand that while you are managing the old business, it is destined to eventually go under. So you have to be prepared to Disrupt the Lock-ins, to discover a new way to do the business. And that can only happen if there is a White Space team dedicated to building a business the way the new marketplace will pay for it. Totally separated from the old business. And exactly the opposite of what Tribune is doing by placing the team in the middle of the old newsroom!

At Tribune, one of the big problems is not only the ad pricing model and news scheduling, but the fact that the leadership is still trying to drive content like they did at the newspaper. Over a decade ago Tribune took a direction of accumulating less news on its own, and as a result it republished lots of content. But now on the internet republishing (or content aggregation as it is called on-line) is far less valuable because readers can go to the source. There are thousands and thousands of aggregators - making competition intense and profits negligible. Why page view a Chicago Tribune web page that's feeding info from the New York Times or Marketwatch or MSNBC when you can go directly to the New York Times or Marketwatch or MSNBC and get it yourself - possibly with other interesting sidebars? Succeeding in the new market requires developing an entirely new Success Formula - which Tribune Company has not done. It's still trying to find that magical "leverage" which will allow it to preserve its "history" (its old Success Formula) while tiptoeing into the new marketplace.

I don't know any newspaper or magazine publisher that has really attacked its Lock-ins, really Disrupted, or set up a true White Space team to explore how to make money in the growing new news market. News Corp. had the chance when it bought MySpace.com, but failed as it destroyed the MySpace business by "helping" its leadership. This market requires understanding how to get the news and report it cheaply and very fast, to computer and mobile device users. That is necessary to obtain the traffic which would be valuable to advertisers. And simultaneously the new team must package ad sales so as to maximize revenues from page views. Most are far too reliant on single ad sales, and not effectively linking the right ads to the right pages to generate more click-throughs as well as views.

The Re-invention Gap
Re-invention Gaps emerge because we let Lock-in blind us to growth opportunities. We define the business around the Lock-ins (such as printing a newspaper) rather than defining it around what the market wants (news). Then when revenues stumble, starting a growth stall, the energy goes into preserving the old Success Formula (and its Lock-ins) first with cost cuts, and later with efforts to "synergize" or "leverage" the old Success Formula into the new market. And this never works. The growing part of the market is entirely different, and requires developing an entirely new Success Formula. That's why even in growing markets businesses fail, unless they commit to Disrupting the Lock-in and using White Space to move back into the growth Rapids.

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Adam HartungAdam 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."

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Saturday, April 24, 2010

Seven Ways to Get Ready for Change

Seven Ways to Get Ready for Changeby Mike Brown

It is important to keep a creative and innovative perspective going amid dramatic change. The seven lessons below, originally shared in an abbreviated form on Twitter, were written across several days of thinking strategically about how Brainzooming is progressing and how to move it ahead even more dramatically.

If you're in a situation where you're contemplating making a dramatic change, consider these ideas and how you can get a head start now, before the change takes place:

  1. Flexibility is freeing. Design your life strategically to create future options for yourself. You never know when you'll need them.

  2. Create situations where you can make as many of your learning mistakes as possible before it really matters. While the intensity will naturally be less, you'll be that much more ready when everything counts.

  3. It's one thing to build a network. It's quite another to effectively use it to benefit others and yourself. Beyond simply helping others in your network, work on how you can and will ask others for their mutual assistance as well.

  4. Never depend on any one thing as a 'sure' thing. Always be prepared for what you'll do "just in case."

  5. You may not have your elevator speech down pat the first time you get on the elevator. It may take a lot of elevator rides to refine it. Start the process now.

  6. Borrow liberally and tweak ideas. But be sure to extend credit even MORE liberally than you're borrowing!

  7. Don't be crippled by someone telling you, "It's the worst time in the world," to do what your attempting to do. In reality, it's the worst time in the world to tell someone it's the worst time in the world to pursue their dreams.

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

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Tuesday, April 20, 2010

More Microsoft in the Soup

Harvard Business Review getting it wrong!

by Adam Hartung

More Microsoft in the SoupTwo readings recently have really surprised me.

First, Dawn Beaupariant from the public relations firm Waggener Edstrom contacted me regarding my Forbes column. I learned this firm is the PR agency for Microsoft. They took exception to my Forbes column ("Microsoft's Dismal Future"). But not because any facts were inaccurate.

Rather, it was their point of view that because OS 7 is now the largest selling OS of all time that demonstrated it was a successful product. Of course, when the television standard was changed in the USA to digital and everyone had to transition set-top boxes those also became big sellers. But it wasn't because everybody wanted the new product. More, it was the impact of a monopolist. We all know Microsoft has had a near monopoly in PC operating systems (even though every year it is losing share to Linux), so the fact that they can force people to use a new one on new machines, or upgrade, is less than an enthusiastic market endorsement of the product. For every "reviewer" who likes OS 7, there are 100 users saying "this gives me bells and whistles I don't need or want, and complicates my life. Can I simply keep my old product, or do my work on my smartphone?"

The Forbes column didn't debate whether Microsoft was likely to remain dominant in PC operating systems - that is a foregone conclusion. The issue is that markets are shifting away from PCs to mobile devices. And Microsoft has lost 2/3 its market share in mobile operating systems. And it is not developing a strong product. If people keep shifting from PCs to Blackberry's, iPhones and Androids - and PC sales start declining - in 10 years Microsoft could dominate PC OS sales (and Office applications) but it may not matter. Too bad the PR firm didn't get that.

Secondly, the PR firm claimed that Microsoft could put forward new products readily, leading to capturing dominant share in new markets. Their one claim that Microsoft had accomplished this was xBox. The PR person conveniently ignored the smartphone market, the Zune-style handheld market, the market for mobile applications (where Apple sold 2billion apps in its first 18 months), the search market (where Microsoft lags Google and would be nowhere without picking up Yahoo!'s declining business) and a host of other markets where Microsoft simply let the horse out of the barn.

To make matters worse, as Microsoft has invested to Defend the PC operating system and office products business, xBox is losing market share (exactly the point I made in the article - using the smartphone example instead)! According to IndustryGamers.com "PS3 'Steadily Increasing' Market Share Across the Globe" (Feb, 2010). Bad pick Dawn!
  • The PS3 is dominant in Japan and Korea, and as of June 2008, has begun to outsell the Xbox 360 in Europe. It is also steadily increasing its market share in all other regions across the globe, including in the North American market
  • PS3 sales have been surging (44% over the holidays) and SCEA senior vice president of Marketing and PlayStation Network, Peter Dille, recently insisted that PS3 will eventually overtake Xbox 360

Most commenters have reflected my viewpoint, saying that they see Microsoft so horribly locked-in to its old business that it is almost GM-like in its approach to new products and markets. Not a good sign. Those who defend Microsoft simply take the point of view that Microsoft is huge, has high share in PCs, and is very profitable in OS and Office Product sales. Wow, just like people defended GM was in the 1970s comparing to offshore competitors! These defenders completely miss the point that the marketplace is now rapidly shifting to new solutions, and the companies driving that shift with the most product are Apple, Google and Research in Motion (RIM)! Microsoft may look like Goliath, but it would be foolish to ignore the slings of new technology being brought to the battle by these David's with their smartphones, Chrome OS, mail products, etc.

I was struck this week at the backward thinking offered on the Harvard Business Review blog posting "Is This Innovation Too Disruptive for My Firm." The author justifies companies sticking to their defensive positions, just as Microsoft is doing, simply because most companies fail at moving away from their "core." He seems very content to offer that since most companies can't really move into new markets well, so they might as well not try. Exactly what they are supposed to do as revenues dwindle in their "core" markets he never resolves! I guess he'd rather management simply not try to grow, and go down valiantly with the sinking ship.

Quite concerning is that he takes up the mantle of "core capability." He points out that most of the failures happen when companies move away from their "core" and therefore he recommends that all innovation remain close to the "core." His big argument is that this is lower risk. Well, Xerox remained close to core with laser printers - and how'd that work out for long-term value growth? Apple remained close to its Macintosh core and was almost bankrupt in 2000 before jumping into music and smartphones. Polaraoid stayed close to its core of instant film photography, and Kodak stayed close to its similar core. Now one is erased from the marketplace and the other is a no-growth inconsequential competitor.

Analogies are risky, but here goes. For the HBR author, his arguement isn't a lot different than "Over the last 200 years we've noticed that ships which sail out past the horizon often never return. Therefore, we recommend you never sail beyond the horizon. Clearly, this is risky and returns are uncertain - so don't do it. Ever. Very likely, there is nothing out there you will ever capture of value." Sort of sounds like those who wouldn't back Columbus - good thing he finally convinced Queen Isabella to give him three ships.

In 2008 and 2009 we've seen many great companies driven to bad returns. Layoffs abound. Growth has disappeared. Listen to HBR, and behave like Microsoft, and you'll never grow again. In 2010 we need a different approach - a different solution. Companies must realize that focusing on "core" capabilities, customers and markets has rapidly diminishing returns these days. You cannot succeed by focusing on defending your business - even if it is a near-monopoly like PC operating systems! Why not? Because markets rapidly shift to new solutions that obsolete your products and even when you have high share, and high margins, sales can disappear really fast (like Xerox machine sales or amateur film sales - and probably laptop sales). If you aren't putting a big chunk of resources into GROWING in new marketplaces, by using White Space teams to drive that learning and growth, you will eventually become a historical artifact.

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Adam HartungAdam 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."

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Monday, April 19, 2010

A Tribute to CK Prahalad

by Rowan Gibson

CK PrahaladOf all the management 'gurus' I have met and worked with, CK Prahalad will always stand tall. His sad and sudden departure a few days ago has robbed the world not only of a great mind, but also of a great heart. I bid him farewell.

CK and I first joined forces in 1995, when I was writing the manuscript for "Rethinking The Future." Our conversations back then taught me a great deal about strategic renewal - the capacity to maintain continuity by constantly creating new sources of profit. In fact, this principle went on to become a cornerstone of my work in the field of business innovation. I therefore feel I owe it to CK to repeat some of those strategy lessons here by way of a tribute. Think of the following words (which are CK's own) as a last lecture - a legacy - from a true intellectual giant:

"With the tremendous turbulence and the speed with which industries are changing today, you can't just sit around and wait. While high levels of profits from existing businesses are a must, companies need to be reinvesting in a consistent fashion to create new businesses, and new products, and to shape the pattern of market evolution. They need to imagine new markets for tomorrow, and to build new core competencies that will give them an advantage in those markets. So it's about creating a virtuous cycle in the organization, where you are continuously increasing the capacity for leverage and profitability within existing businesses, but you are also continuously redeploying resources to invent new sources of profit - new strategic growth opportunities.

Senior managers should therefore be spending less time looking inward and backward, and more time looking outward and forward. They need to be thinking about the implications of new trends and technologies, and about how their industries might be different in five or ten years. Of course, operational issues are important and legitimate - how to reduce overheads, how to respond to a competitor's last move, how to improve quality or reduce cycle time - but unless you are growing new markets, new businesses, new sources of profit, you will find yourself on a treadmill, always trying to improve the ever-declining margins and profits from yesterday's businesses.

It's not enough to imagine the future - you also have to build it. Many companies have had incredible industry foresight, but they lacked the capacity to execute it. Xerox has probably had more technology, and yet missed more opportunities, than any other high-tech company. In order to build the kind of future business which you have imagined, you need to develop this capacity for execution. You need to make a strategic blueprint for turning the dream into reality - a link between the present and the future. You need to carefully work out which new competencies you should be building, which new customer groups you should be trying to understand, which new distribution channels you should be exploring, in order to create a winning position for yourself in a new opportunity arena.

Two things seem to characterize most of the companies that succeed in capturing future opportunities. First, they have aspirations which lie outside the resource base of the company, and they manage to stretch and enlarge their resources in order to succeed in this new market. Second, successful companies have come to a view of the future that provides a sense of direction, a sense of common purpose, a sense of destiny, a single-minded and inspiring challenge which commands the respect and the allegiance of every person in the organization. The role of senior management is to make sure that the company develops this broad aspiration, and in addition that it is clearly articulated, understood and continuously reinterpreted. Every two or three years, management should again interpret its aspiration and say, 'This is what it means to us in the next two years', so the challenge is always renewed but the overall strategic intent remains consistent.

A company must also learn to look at itself as a portfolio of competencies, of underlying strengths, and not just as a portfolio of business units. Business units are focused on products and markets, whereas core competencies are focused on customer benefits, such as Apple's 'user-friendliness'. Organizations should identify their core competencies and ask themselves what strengths they could leverage in new ways as they move into the future, and what they could do that other companies might find difficult.

Companies are going to have to unlearn a lot of their past - and also to forget it! The future will not be an extrapolation of the past. Like a space rocket on the way to the moon, a company has to be willing to jettison the parts of its past which no longer contain fuel for the journey and which are becoming, in effect, excess baggage. That is particularly difficult for senior managers - those who actually built the past, and who still have a lot of emotional equity invested in it. If you want to escape the gravitational pull of the past, you have to be willing to challenge your own orthodoxies, to regenerate your core strategies and rethink your most fundamental assumptions about how you are going to compete. Most often it takes a crisis before a company is willing to do that. It takes a sense of urgency, a sense that the company's future success is not inevitable.

Of course, to create the future you do not have to abandon all of your past. There is a need for selectivity. But essentially, the success recipes from your past may no longer be the success recipes for your future. For example, quality was a source of competitive advantage in the past. That is where the efforts of many companies have been focused. But quality is now merely the price of market entry, so there is a need to move on. The most important source of competitive advantage for the future is the capacity to create fundamentally new products and businesses.

With new product development costs escalating, if you want an appropriate return on your investment, you have to develop products for a global market. In other words, you have to get access to critical channels of distribution around the globe and then quickly drive the new product to the market in as many of these countries as possible. In other words, the issue becomes not just time to market but time to global preemption. Ed Artzt, former Chairman of P&G, put it this way: 'If we don't do it early on globally, someone else will.' Ultimately, the race to the future becomes a mad dash to the finish line.

Go back and look at the Fortune 500 or the Fortune 100 over the last 50 years, and ask yourself how many companies have disappeared from the list, and what the survivors do to stay in that league. You will find that they are continually looking forward, not backward. They are continually changing the rules of competition, rather than following the accepted rules. They are regularly defining new ways of doing business, pioneering new product concepts, building new core competencies, creating new markets, setting new standards and challenging their own assumptions. They are taking control of their future. You can't do that if you are not willing to change and to move from where you are today. The opportunities are out there for everyone, but capturing new business opportunities is like shooting flying ducks - you can't do it with fixed gun positions."

Since CK first spoke those words to me over one and half decades ago (and they are just as relevant today as they were then), my respect and admiration for his insights has only grown. After his seminal HBR article The Core Competence of the Corporation, and the incredible global success of "Competing For The Future", co-authored with Gary Hamel, he went on to pioneer the concept of "co-creation" with an organization's customers in "The future of Competition". But the crown of his achievements was undoubtedly "The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits", which was both brilliant and humanitarian. With this masterstroke, he changed forever the way global corporations view emerging markets, and helped improve quality of life for countless underprivileged people, particularly in his homeland, India.

I will remember CK Prahalad as a man who made our world a richer place, not just in terms of business knowledge, or in terms of company profits (for those who were smart enough to listen to him), but also in terms of economic prosperity in the Third World. Thank you, CK. You will be sorely missed.

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Rowan GibsonRowan 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.

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Saturday, April 17, 2010

Wal-Mart's (Latest) Identity Crisis

by Steve McKee

Wal-Mart's (Latest) Identity CrisisWal-Mart is a study in contrasts.

Its low prices are awesome. Its shopping experience, not so much. Its positioning is terrific, but its advertising leaves something to be desired. It serves well its paycheck-to-paycheck customers, but panders too much to the politically correct.

Wal-Mart has a rock-solid heritage in founder Sam Walton, but too often loses sight of what makes it special. The latest example came in the form of an announcement last week that the company was cutting prices on some 10,000 items. With any other retailer that would be cause for celebration, but with Wal-Mart it's just disappointing.

Wal-Mart = Low Prices. Period. Not margins. Not promotions. Not rollbacks. If prices are always as low as possible - as Wal-Mart has worked so hard for so long to convince us of - how then can they be cut, especially across such a wide swath of products? In one of its "rollback" TV commercials, Mike the truck driver says, "just by driving smarter routes and making sure our trailers are packed fuller, we save millions of dollars on fuel costs." Does the world's leanest company expect us to believe that it just figured that one out?

In an April 9 story about the price cuts, the Wall Street Journal's Miguel Bustillo and Timothy W. Martin cited a J.P. Morgan analyst whose regular Wal-Mart price survey resulted in a bill 2.3% higher than it was in the previous month. That's a pretty big jump. While it's any company's prerogative to raise or lower its prices, Bustillo and Martin wondered "...whether Wal-Mart is committed to pushing the envelope on pricing as it did in the days of its late founder, Sam Walton, or is it merely hyping promotions as it pursues a more margin-driven approach?"

Judging from what Wal-Mart CMO Stephen Quinn said of the cuts, it appears to be the latter: "We felt we needed to increase the intensity and excitement with our customer, especially the feeling that Wal-Mart has great deals."

Yuck. "Great deals," "hyping promotions" and "a more margin-driven approach" are what you'd expect from Kroger or Macy's, not Wal-Mart. I don't know about you, but I expect the "great deals" at Wal-Mart to be baked into its everyday low prices, not used as underpinnings of a grand promotion.

Like many companies trying to cope with slowing sales, Wal-Mart can be its own worst enemy. Instead of fiddling with margins and flirting with upscale customers, Wal-Mart should aggressively tout its all-the-time, every-day, low-low-lowest prices. Always. It's the one company with the credibility to do so, and promotions like this threaten that very crediblity. Wal-Mart needs its customers to believe that it always - always - gives them the lowest prices it can.

That's what made Wal-Mart, Wal-Mart. It shouldn't mess with success.

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Steve McKeeSteve McKee is a BusinessWeek.com columnist, marketing consultant, and author of "When Growth Stalls: How it Happens, Why You're Stuck, and What To Do About It." Learn more about him at www.WhenGrowthStalls.com and at http://twitter.com/whengrowthstall.

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Friday, April 16, 2010

Are You a Helicopter Manager?

by Holly G. Green

There's been a lot of talk in the media lately about the dangers of over-protective parenting. In fact, it's gotten so bad that psychologists have coined a new phrase - 'helicopter parents' - for the moms and dads who get over-involved in their kids' lives.

These are the parents who yell at the soccer coach when Emma doesn't get enough playing time during the game. These are the parents who intervene at school when Dylan receives a B instead of an A, even though he turned the assignment in late and poorly done. And these are the parents who constantly hover over their kids and swoop down to rescue them any time it looks like they might stub their toe or suffer some minor distress.

Helicopter parents mean well. But they end up doing real damage to their children by being way overprotective and micro-managing every aspect of their lives. Their kids never learn how to solve problems or deal with the harsher realities of life. So when they go off to college or enter the workforce, they struggle to deal with everyday challenges in the adult world (especially when those parents hover in those worlds as well)!

Unfortunately, the business world has its share of helicopter managers as well.

These are the managers who make most or all of the decisions for their employees.

They tell people what to do, when to do it, and how to do it. They withhold information for fear of upsetting people, and tend to avoid conflict rather than addressing the underlying issue. Worst of all, they solve problems for their employees rather than letting people figure it out for themselves.

Like their parental counterparts, helicopter managers mean well. But the result is the same. By micromanaging every aspect of people's jobs, they stunt the growth and development of their employees. And in doing so, drastically limit what the organization as a whole can achieve.

Helicopter managers aren't bad people; they're just stuck in the past. They're using management concepts and techniques that no longer jibe with current market realities. In a world where everything you know about your customers and your industry can change in a flash, you can't afford to get stuck in the present, much less the past.

In the old days managers got results by hovering and micromanaging. Today's market conditions require a very different approach. For starters, employees will no longer put up with being told what to do, when to do it, and how to do it. If you don't offer them some input into how they do their jobs, they will go elsewhere.

More important, to succeed in constantly changing markets you must have a flexible, adaptable organization that can change direction on a dime. And you get that by having empowered, enabled employees who can perform at high levels and achieve goals and objectives without someone constantly hovering over them.

As a manager, your job isn't to make decisions for employees. It's to teach them how to make decisions that are good for the customer and the organization. Your job isn't to solve problems for employees. It's to coach them to creatively solve problems on their own. Your job isn't to micromanage every aspect of your employees' jobs. It's to give them the information and resources they need and then get out of the way and let them do their jobs!

And don't confuse this approach with withholding answers if your employees ask you for them. There is nothing worse than a manager who thinks he/she is teaching an employee how to think by asking questions versus telling them what you know. If you know the answer or have strongly held opinions about how something needs to get done, give the answer and expose your thinking process to get it. Your employees learn more that way and won't talk bad about you in the break room or on twitter!

If your company is struggling to respond to changing customer expectations and market realities, land your helicopter, turn in your pilot's license and start learning a new and more flexible way of leading your organization. Helicoptering works great during police chases and traffic reports. Not so much in parenting. And in today's markets, it won't get the results you need for your business either.

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

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You Don't Grow a Plant by Pulling On It

by Yann Cramer

You Don't Grow a Plant by Pulling On ItThe Work Foundation published the results of an interesting study: Exceeding Expectation: the principles of outstanding leadership. Amongst the differences that make the difference between good and great leadership, I picked this distinction: Delegate task v. Delegate space for autonomy

The distinction most definitely applies to innovation leadership. You do not grow a plant by instructing it to do so, or worse by pulling on it. You do not get people to innovate by tasking them with innovating. You grow a plant by providing the Soil, the Space, the Sun... and letting it happen. You foster innovation by providing:
  • The Soil - access to internal and external knowledge and experiences where people can extend their roots,

  • The Space - the autonomy, as opposed to breathing down their neck,

  • The Sun - letting people draw their energy from their own passions,

  • The Strategy - direction and challenge.

... and letting it happen.

Great leadership in general and innovation leadership in particular call for leaders to invest their energy and trust in people, not in action lists and delegation tracking systems.

"Not everything that counts can be counted and not everything that can be counted counts." - Albert Einstein.

An executive summary of the study can be found at the Work Foundation.

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Yann Cramer is an innovation learner, practitioner, sharer, teacher. He's lived in France, Belgium and the UK, he's travelled six continents to create development opportunities with customers or suppliers, and run workshops on R&D and Marketing. He writes on www.innovToday.com and on twitter @innovToday.

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Thursday, April 15, 2010

Innovation is Solving Problems Without Constraints

by Jeffrey Phillips

Innovation is Solving Problems Without ConstraintsAs a person who started out as an engineer, I know that most engineers like to solve problems that are useful to society. Often this means that there are tradeoffs and constraints associated with any problem. Cars that get higher gas mileage may need to be lighter, but lighter cars don't survive crashes as well as heavy cars. So when we are presented a problem to solve or an opportunity to address, we often start out by trying to define the constraints.

These constraints could be based on technology issues, but are often based on other factors, like legal or regulatory issues, pricing or cost issues, distribution or transportation issues and so forth. When we as innovators agree to work within a set of bounds or constraints to solve problems, we are like the kids in kindergarten who are encouraged to "color within the lines" - that is, we accept the constraints and our thinking is guided by nudging right up next to the constraint, but never violating or ignoring the constraint. In this manner the constraint conforms our thinking and becomes a barrier. We don't challenge the constraint but accept it, and that governs the outcome. Since every other firm in the same space or industry is challenged with the same constraints, most of the solutions look very similar. We've become prisoners of our own thinking, happily limited in our degrees of freedom by constraints we've accepted.

Now, good innovators will tell you that what we need to do, at least temporarily, is to ignore the constraints and push beyond those barriers to generate solutions, then examine our recommended solutions to determine if they can deliver the same, or better, outcomes while conforming to the constraints, or changing the constraints to offer an even better solution. This approach considers the most optimal outcome, then seeks to determine whether or not it can fulfill the original constraints, or if those constraints can be changed. Innovation happens when someone in an industry, or, more typically, someone outside an industry who rejects the group think within the industry, decides to set aside the accepted norms and constraints and to think more expansively about the problem or opportunity. Then, with a number of possible solutions in hand, the innovator seeks alterations that will allow the new idea to fit within the constraints, or seeks to modify the constraints based on the value of his or her solution.

Recently I heard the VP of Innovation from RJR talk about their process for setting innovation guidelines. He called it a "fence setting" exercise. After all, we all want to know the "space" where we can innovate. His team is responsible for setting the "fences" which dictate the important "space" where the teams should generate ideas, but I suspect their approach is probably less focused on specific constraints and more focused on providing strategic guidance.

A combination of fence setting - to direct teams to focus their efforts on strategic innovation spaces or markets and unconstrained thinking - to move outside of the "color within the lines" mentality that limits our thinking - will drive new ideas within your organization that have real value.

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Jeffrey PhillipsJeffrey 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.

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35 Critical Thinking Strategies

by Mike Myatt

35 Critical Thinking StrategiesCritical thinking skills are not a luxury for senior executives - they're a survival skill. In today's hi-tech business world we have become reliant on any number of available business tools to help us achieve better results and to perform at higher levels. We attend classes, workshops, webcasts, conferences etc., and we read books on how to master everything from the newest software application to the latest management theory. We seem to have an insatiable thirst for anything that will provide us with a perceived competitive advantage, yet we often ignore the one tool which can provide an unequaled return on investment if developed to even a fraction of its potential... the human mind. In today's post I'll examine the virtually unlimited benefits of becoming a better critical thinker.

Most professionals intellectually understand that learning is a life-long endeavor, but the reality is that many executives and entrepreneurs invest very little in the development of the human mind once they have finished their formal education. Given that the human mind is without question the greatest and most powerful tool we possess, and that we all have free and equal access to it, I find it odd that it is also the most underdeveloped tool for many professionals. It has been my experience that business people tend to overestimate their intellectual ability, and as a result, they often fail to make investments in endeavors of intellectual development.

Developing sound critical thinking skills are a requirement for CEOs and entrepreneurs. Being both quick of mind, and intelligent in approach to your mental analyses of a given situation simply results in fewer mistakes in judgment. The external perception with regard to a person who possesses excellent critical thinking skills is often that they have great wisdom and discernment. Critical thinking skills while related to intelligence, are not one in the same. A great critical thinker may or may not be the sharpest tool in the shed, but they will have a disciplined, fluid approach in thinking things through that often gives them the appearance of being a genius. Strong mental acuity is a competitive advantage not to be taken lightly.

Paul, Binker, Jensen, and Kreklau (1990) developed a list of 35 dimensions of critical thought. While the following list can get a bit academic, if implemented consistently, these tactics will help you better navigate the complexities of the business world:

Affective Strategies
  1. Thinking independently
  2. Developing insight into egocentricity or sociocentricity
  3. Exercising fair-mindedness
  4. Exploring thoughts underlying feelings and feelings underlying thoughts
  5. Developing intellectual humility and suspending judgment
  6. Developing intellectual courage
  7. Developing intellectual good faith or integrity
  8. Developing intellectual perseverance
  9. Developing confidence in reason

Cognitive Strategies - Macro-Abilities
  1. Refining generalizations and avoiding oversimplifications
  2. Comparing analogous situations: transferring insights to new contexts
  3. Developing one's perspective: creating or exploring beliefs, arguments, or theories
  4. Clarifying issues, conclusions, or beliefs
  5. Clarifying and analyzing the meanings of words or phrases
  6. Developing criteria for evaluation: clarifying values and standards
  7. Evaluating the credibility of sources of information
  8. Questioning deeply: raising and pursuing root or significant questions
  9. Analyzing or evaluating arguments, interpretations, beliefs, or theories
  10. Generating or assessing solutions
  11. Analyzing or evaluating actions or policies
  12. Reading critically: clarifying or critiquing texts
  13. Listening critically: the art of silent dialogue
  14. Making interdisciplinary connections
  15. Practicing Socratic discussion: clarifying and questioning beliefs, theories, or perspectives
  16. Reasoning dialogically: comparing perspectives, interpretations, or theories
  17. Reasoning dialectically: evaluating perspectives, interpretations, or theories

Cognitive Strategies - Micro-Skills
  1. Comparing and contrasting ideals with actual practice
  2. thinking precisely about thinking: using critical vocabulary
  3. noting significant similarities and differences
  4. Examining or evaluating assumptions
  5. Distinguishing relevant from irrelevant facts
  6. Making plausible inferences, predictions, or interpretations
  7. Evaluating evidence and alleged facts
  8. Recognizing contradictions
  9. Exploring implications and consequences

If you want to do everything possible to ensure your success as a C-level executive or entrepreneur, don't rest upon your laurels, but rather continue to make investments in your personal and professional development. Good luck and good thinking!

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

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Wednesday, April 14, 2010

Don't Believe the 98% Innovation Failure Rate

It Is Just A Myth. Here Are My Top Five Innovation Tips.

by Idris Mootee

Don't Believe the 98% Innovation Failure RateInnovation is hard in many ways. What is hard about innovation? Finding new ideas is not hard. Building an innovative culture is hard. Turning ideas into product/services that people love is hard. It all begins with a piece of paper and a pencil. Innovation is hard because there are so many myths about innovation and consultants are selling snake oil. Innovation is not something that is taught in MBAs and not part of any MFA curriculum.

You can look at it from a process view, a strategy view, an organizational view and a toolkit view. Everyone's journey is a little different and what works for one organization may not work for another. There is no one size fits all solution. Creating an innovation culture is easier said than done. There is no magic bullet for creating innovations, but there are many ways to develop a culture that encourages innovation. Developing an innovation culture takes a lot time and many companies have the will but not the time, you need to look for help externally. What will bring the organization together overnight to translate product and service initiatives into sustained results? The process one is a tricky one and here are some quick tips:

1. Challenging Orthodoxies And Overcoming Dogmas.

This is an important starting point and no good ideas will be seriously looked at without overcoming thee orthodoxies. There are orthodoxies in service such banking, healthcare and hospitality as much as in products such as CPGs, consumer electronics and personal care products. You can start with challenging your own orthodoxies or look at industry level dogmas. Think media, music, computing, beverages, travel etc. Forget the value chain for a second and start playing Lego. Challenge everything!

2. Participative Design and Co-Creation.

The customer is King, Queen and Jack. Any innovation efforts will fail eventually if the end user is not driven to use your new product or service. Most consumers are intelligent and can contribute so much to the process. It is true that people can not always voice their needs and desires in a way that makes sense, but our job is find creative ways to understand their attitudes, values and behaviors and figure out how to include them in your innovation process.

3. Innovation Sponsor and SWOT Team.

The majority of innovation teams start when a mandate from the CEO and followed by the appointment of an executive sponsor. Without top level support, you may never get the resources needed to get things done.

Even a CEO have challenges finding the resources to invest in innovation, if there are multiple established businesses, the P&L owners of each of those businesses are going to fight for resources. The CEO often must take dollars away from yesterday's businesses and give them to future's businesses and untested ones. That takes guts. Innovation is not for everyone. Majority of people are not ready or motivated to make innovation happen.

When putting together your innovation team, pick people from across different functions and business units, find people who have nothing to lose in their careers and willing and ready for some risks. People who have imagination and who have always been acting as the voice of the customers. Start with a small team and gradually expand to add more people. At some point, you will be ready to make this an organization-wide undertaking and ready to harness the collective creative energy of people from all parts of the organization.

4. Demonstrate Progress Often and Show Them the Prizes.

Any innovation efforts cannot be done in a black box, these activities should be tracked and measured. The quality and quantity of foresights and insights, the number of unique idea contributors, the total number of ideas generated and total number of ideas that have been prototyped, etc. And when you do get a big or small win, make sure you communicate them across the company. Innovation needs publicity.

5. Defy The 98% Failure Rate Myth.

A client of mine once told me that their success rate of innovation was 90%. I immediately felt off the chair and responded that it was probably because there weren't any real innovation at all. People in the room laughed as I explained that they were most likely talking about some incremental improvements and called them innovation. On the other side, when people say their failure rate is 98%, I would think that they're simply not doing it right and probably lack a systemic approach of scanning, visualizing, imagining and early commercialization of ideas. If you do it right, your failure should fall below 70%. Yes, failure is part of any innovation process, but improving the chances of success is also part of an innovation strategy.

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Idris MooteeIdris Mootee is the CEO of idea couture, a strategic innovation and experience design firm. He is the author of four books, tens of published articles, and a frequent speaker at business conferences and executive retreats.

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Tuesday, April 13, 2010

What You Don't Know Can Kill You - Facebook, Twitter, iPad, Kindle

by Adam Hartung

What You Don't Know Can Kill You - Facebook, Twitter, iPad, KindleNancy Munro of Knowledgeshift.com posted a great blog "Technology was Blago's Enemy Again." Although many people watch The Apprentice, I'm not one. Apparently the former governor of Illinois was a contestant, and when he was challenged to lead a project team his lack of technology skills got in the way of effectively doing the job. Although he's a smart lawyer and politician, his tool set had become outdated. A competitive team leader who was very good at texting and other state-of-the-art technologies was able to best Governor Blagojevich's team, and the ex-governor was "fired" by Donald Trump from the show.

On the surface, this is a funny story. But Nancy points out how it reflects the very real issues of using technology when competing. All businesses compete every day. Those that learn to use new technologies are able to get more done, faster and more effectively. Those who fall into a routine of doing things the same way, and don't advance their tool set, run the risk of being knocked out of the competition. Mr. Blagojevich's inability to use modern technology killed his chances of winning the competition.

Will you, or your business, go to any trade shows or conferences this year? Probably. But you'll limit attendance because you're still worried about financial performance. How will you select where you go? Probably by attending the ones most closely associated with your industry or business. But think about it, are those the ones that will be most valuabl? You'll probably mostly hear what you already know, and reinforce your existing beliefs about the business. Is that really an effective spend?

Instead, shouldn't you use the funds to learn about what you don't know? Like how to be a world-class social marketer? This is an amazingly fast growing area where early adopters are gaining new sales. For example, Guy Kawasaki and the world's leaders in social marketing will be talking about how to get sales and profits from Twitter and Facebook at something called "The Smartbrief Social Media Success Summit." I'm not a shill for the conference (I'm not even speaking there), but this kind of event offers the very real opportunity of learning something you don't know - rather than reinforcing old Lock-ins and keeping you doing what you've always done.

Have you purchased a Kindle or iPad yet? If not, how do you know what they can or can't do? At SeekingAlpha.com "Thoughts on the iPad" offers one person's reflection on what the iPad does well, and doesn't, and where it might evolve - as well as how it compares to the Kindle. These devices are selling in the millions - so are you and your business thinking about how to use one to help sell more products or make more money? Yahoo and Google are both launching ad models for iPad (see Mediapost.com "Yahoo Readies Launch of Online Advertising Model"). Are you considering using this media to reach new customers? Have you considered how one of these products embedded in what you sell might offer you a competitive advantage? If you and your colleagues haven't tried one, experimented, how would you know?

Our businesses rarely get into trouble from something we know well. It's what we don't know, what we ignore, that gets us in trouble. Like Craigslist.com wiping out newspaper classified ads. The newspapers didn't even see it coming. On the other hand, if they had investigated and used Craigslist they could have prepared, and maybe even developed a competitive on-line product to grow new revenues!

It's incumbent upon us to constantly expand into new markets. We have to constantly keep White Space alive where we use resources to experiment in areas outside traditional permission. It's easy to keep throwing all our resources into what we know, but in the end, it's what we don't know that will knock us out of the game - like poor Blago.

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Adam HartungAdam 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."

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Monday, April 12, 2010

Think What Nobody Else Thinks

by Paul Sloane

Think What Nobody Else ThinksHow can you think of things that no-one else thinks of? The answer is by deliberately taking a different approach to the issue from everyone else. There are dominant ideas in every field. The innovative thinker purposefully challenges those dominant ideas in order to conceive new possibilities.

Albert Szent-Gyorgyi, who discovered Vitamin C, said, "Genius is seeing what everyone else sees and thinking what no-one else has thought." If you can identify the standard viewpoint then survey the situation from a different viewpoint you have an excellent chance of gaining a new insight. When Jonas Salk was asked how he invented the vaccine for polio he replied, "I imagined myself as a virus or cancer cell and tried to sense what it would be like."

Ford Motor Corporation asked Edward de Bono, who originated the concept of lateral thinking, for some advice on how they could clearly differentiate themselves from their many competitors in car manufacturing. De Bono gave them a very innovative idea. Ford had approached the problem of competing from the point of view of a car manufacturer and asked the question, "How can we make our cars more attractive to consumers?" De Bono approached the problem from another direction and asked the question, "How can we make the whole driving experience better for Ford customers?" His advice was that Ford should buy up car parks in all the major city centers and make them available for Ford cars only. His remarkable idea was too radical for Ford who saw themselves as an automobile manufacturer with no interest in the car parks business.

The spectators at the Olympic Games in Mexico City in 1968 were amazed to see a young athlete perform a high jump with his back to the bar. Until then, every high jumper 'rolled' over the bar with his or her face down. Dick Fosbury, and American, introduced an entirely new approach, the 'flop', leaping over with his back close to the bar and his face up. Fosbury was ranked 48th in the world in 1967; yet in 1968 he caused a sensation when he won the Olympic Gold Medal with his unprecedented technique and a leap of 2.24metres. What he introduced was literally a leap of the imagination - and it revolutionized high jumping. Nowadays all the top jumpers use his method. He thought what no-one else thought and conceived a new method.

How can we force ourselves to take a different view of a situation? Instead of looking at the scene from your view try looking at it from the perspective of a customer, a product, a supplier, a child, an alien, a lunatic, a comedian, a dictator, an anarchist, an architect, Salvador Dali, Leonardo da Vinci and so on. Apply the What if? technique. Challenge all the common assumptions. If everyone else is looking for the richest region, look for the wettest. If everyone else is facing the bar then turn your back on it.

If you had to study a valley, how many ways could you look at it? You could look up and down the valley; you could scan it from the riverside or stand and look across it from each hillside. You could walk it, drive along the road or take a boat down the river. You could study a satellite photo. You could peruse a map. Each gives you a different view of the valley and each adds to your understanding of the valley. Why not do the same with any problem? Why do we immediately try to frame a solution before we have approached the problem from multiple differing perspectives?

The great geniuses did not take the traditional view and develop existing ideas. They took an entirely different view and transformed society. Picasso took a different view of painting; he saw cubes, shapes and impressions instead of accurate images. Einstein imagined a new approach to physics; a world where time and space were relative. Darwin conceived a different view of the origin of species; he saw how they might have evolved rather than been created. Each of them looked at the world in a new way. In similar fashion Jeff Bezos took a different view of book retailing with Amazon.com, Stelios took a new perspective on flying with Easyjet, Swatch transformed our view of watches and IKEA changed the way we buy furniture.

If we can attack problems from entirely new directions then we can think of things that conventional thinkers miss. It gives us unlimited possibilities for innovation.

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

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Friday, April 09, 2010

Importance of Storytelling to Innovation

Equipping new ideas to survive the journey through the corporation

by Yann Cramer

The Importance of StorytellingThe word storytelling immediately evokes the past: "Once upon a time" is after all how traditional childhood stories (used to) begin. But for a story to become inspirational it's got not only to be deeply rooted but also to connect with what we can do now to reach a better future.

Henry V inspires his men by telling them what, in the future, they will be able to tell their children about what they are going to accomplish today:

"This story shall the good man teach his son [...] (And) we in it shall be remembered, we few, we happy few, we band of brothers. For he today that sheds his blood with me shall be my brother."

What does this have to do with innovation?

Well, new ideas typically face a long and arduous journey through the organizations they are born into and that to some extent they need. At every turn of the road there will be a well-intentioned devil's advocate ready to deal a fatal blow, there will be legions of giant worms clustering around the idea to caution it and slow it down, there will be armies marching in a different direction and pressing more men into their ranks. There will be the nights of self-doubt when even the innovator feels like abandoning the field.

A good story is what will sustain the innovator's morale, convince people to follow, slice through the worms, and tell the devil's advocate to go to hell.

The ingredients of a good story are:
  • The characters, people with qualities, limitations, a past with its successes and failures, humans rather than super-heroes
  • A fix, a happy past that has gradually or suddenly been marred with a growing problem that is now casting too long a shadow to be ignored
  • A dark vision of how worse the future will be if the problem is not addressed
  • The key, the magic formula that will change the course of history
  • A bright vision of how great the future will be if indeed we put the key to good use
  • A road map for the next steps of the journey.

Storytelling is not just a skill for captains to inspire their troops. Individuals who want their ideas to survive the journey towards a business home where they can settle and thrive, have to get them on the back of stories that will carry them through the long and arduous journey across the corporation. And in the end,

"He that outlives this day and comes safe home, will stand a-tiptoe when this day is named... Then shall our names, familiar in his mouth as household words,... Be in their flowing cups freshly remembered."

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Yann Cramer is an innovation learner, practitioner, sharer, teacher. He's lived in France, Belgium and the UK, he's travelled six continents to create development opportunities with customers or suppliers, and run workshops on R&D and Marketing. He writes on www.innovToday.com and on twitter @innovToday.

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Are You a Great Leader?

Or are you just running with the rest of them?

by Holly G. Green

Are You a Great Leader?If you were to compile a checklist of attributes for great leaders, it would certainly include the following:

Visionary? Check. JFK's powerful vision of "We will put a man on the moon by the end of a decade" is a classic example of great leadership through a compelling vision.

Great communication skills? Check. Ronald Reagan's ability to inspire others through passionate oratory earned him the moniker "The Great Communicator."

Focus? Check. During the Civil War, Abraham Lincoln saved a nation (and changed the world) with his relentless focus on keeping the United States whole.

Courage under fire? Check. When things looked their bleakest for England in the early days of WWII, Winston Churchill rallied the country with his personal courage and bulldog tenacity.

Personable? Check. Despite his other character flaws, Bill Clinton had a charm and charisma that attracted people to him in droves.

Strategic thinker? Check. The business landscape is full of great strategists who have guided their organizations to positions of market leadership. Steve Jobs of Apple. Gordon Moore of Intel, to name a few.

If you asked people which of these is most important for a leader to have, many - at least those in the business world - would probably say strategic thinker. With so many competitors in every market and with change happening in the blink of an eye, it takes a great strategy to come out ahead. It takes someone who can look around, make new connections, and connect the dots faster.

But creating a winning strategy is only half the battle. In fact, it may be the easier part. Leading effectively in today's business environment requires the ability to think strategically and to implement according to that strategy. And that's where many leaders and entire organizations are falling short.

I firmly believe that the #1 job of today's leaders and managers is constant focus on both strategy and implementation. This represents a huge difference from a generation ago, when it often took several years for a good strategy to unfold. These days, speed, the rate of change, and universal access to information have created a whole new set of demands that require your daily attention.

The key is to balance your energy and attention across strategy and execution. Find a tool (or tools) that will enable you to develop the same sense of urgency around strategy and focused implementation that you normally devote to putting out all the "emergencies" that occur throughout the day.

These tools can be as low-tech as a sticky note reminder or as sophisticated as an automated "task ping" from your PC or laptop - anything that keeps you focused on the activities necessary to turn your plan into reality.

To stay focused on implementation, pause for a few minutes and plan out your time for the week ahead. Segment it into separate activity blocks, such as collecting data on strategy X, hands-on work on initiative Y, feedback sessions, customer meetings, communication events, etc. Really think about where you are spending your time and how much of it correlates to actually achieving your strategy.

Review the percentage of time you allocate to each activity block and ask: Does this align with getting us to our destination? Am I ignoring or missing critical areas? Are there areas taking up too much of my time for the anticipated return? Of what I am doing right now, what will have an impact a year from now?

Spending all your time contemplating the future might work for think tanks and ivory towers. But in the business world, it's the day-to-day actions (communicating, providing feedback, realigning behaviors, recognizing others, etc.) coupled with the strategic thinking and doing that equates to success.

Many leaders can come up with a winning strategy. It's the follow-through and focus on getting the right things done that separates the great leaders from the good ones. Don't just run, run in the right direction!

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

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Thursday, April 08, 2010

Experiments - The Key to Innovation

by Tim Kastelle

Experiments - The Key to InnovationThere is a big problem that organisations often face: they want to be innovative, but they also want to minimise risk. This creates a certain amount of tension. If I had to pick the number one thing that I would recommend to organisations that are trying to become more innovative, it would this: experiment. Experiment all the time. Try everything that you can possibly think of to try. An experimental mindset is absolutely essential to successful innovation.

We were talking about this idea in class this week, and it clearly makes people nervous. I was suggesting that in an uncertain environment, normal strategy tools such as SWOT analysis, five forces and so on are actually pretty dangerous to use. One of the students asked "so everything is chaos, and we throw out the tools and models, then what? What are we supposed to do?"

That's a good question. I replied that in part this was a rhetorical trick - in terms of the narrative of the class, we were at a point equivalent to just before the end of the Two Towers in The Lord of the Rings trilogy: we're trapped in a castle surrounded by tens of thousands of orcs, Gandalf is missing, the hobbits are spread all over middle earth, and we have absolutely no idea what is going on. How do we navigate from this point to the five different happy endings that conclude the story?

Again, my answer is to experiment. The tools that I have talked about previously that are designed for linking innovation to strategy are all built around experimenting. The way to combat high levels of uncertainty is to spread your bets. Try as many cheap experiments as you can.

There must be something to this idea, because I've run across three different people saying basically the same thing in the past three days. The first was Dan Ariely:

"They asked me what I thought the best approach was. I told them that I was willing to share my intuition but that intuition is a remarkably bad thing to rely on. Only an experiment gives you the evidence you need...

Companies pay amazing amounts of money to get answers from consultants with over-developed confidence in their own intuition. Managers rely on focus groups - a dozen people riffing on something they know little about - to set strategies. And yet, companies won't experiment to find evidence of the right way forward."

Unsurprisingly, he goes on to make a case for the value of experimenting. Part of this reluctance is that experimenting leads to short-term losses - if you try several things to find out what works best, you have wasted resources by trying the ideas that end up not working. Or do you? Rita McGrath doesn't think so:

If your organization can approach uncertain decisions as experiments and adopt the idea of intelligently failing, so much more can be learned (so much more quickly) than if failures or disappointments are covered up.

So ask yourself: are we genuinely reaping the benefit of the investments we've made in learning under uncertain conditions? Do we have mechanisms in place to benefit from our intelligent failures? And, if not, who might be taking advantage of the knowledge we are depriving ourselves of?"

She includes a list of conditions that can lead to what she's calling 'intelligent failures', the approach that she outlines is both good and practical. Then I ran across this by Bob Sutton:

"The final point that Jeff Pfeffer and I make in Hard Facts is about failure. We emphasize that is impossible to run an organization without making a lot of mistakes. Innovation always entails failure. Most new products and companies don't survive. And if you want creativity without failure, you are living in a fool's paradise. It is also impossible to learn something new without making mistakes...

Failure will never be eliminated, and so the best we can hope for from human beings and organizations is that they learn from their mistakes, that rather than making the same mistakes over and over again, they make new and different mistakes."

To be innovative, we have to try out new ideas. Some of these will fail. If we're smart, we'll set up our experiments so that we can learn as much as possible from the ideas that don't work.

We face an environment that is filled with uncertainty. This makes planning dangerous. The best possible way to meet this uncertainty is not with intuition and guesswork, but with experimentation. If you can combine experimenting with empathy, then you'll be building a formidable innovation capability.

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(Photo from flickr/jurvetson under a Creative Commons license)

Tim KastelleTim Kastelle is a Lecturer in Innovation Management in the University of Queensland Business School. He blogs about innovation at the Innovation Leadership Network.

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