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Innovation Excellence Weekly - Issue 36

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We are proud to announce our 36th Innovation Excellence Weekly for Slideshare. Inside you'll find ten of the best innovation-related articles from the past week on Innovation Excellence - the world's most popular innovation web site and home to 5,500+ innovation-related articles.

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Innovation Excellence Weekly - Issue 36

  1. 1. June 20, 2013
  2. 2. Issue 36 – June 14, 20131. Innovators Challenge Orthodoxies: Elon Musk ......................................... Rowan Gibson2. A Brilliantly Simple Way to Boost our Creativity …….……..……….... Jerome Provensal3. Phone as Bank: Are You Ready for Disruptive Innovation? ……......…… Holly G Green4. 4 Ways Technology Is Transforming Business……………..…………...…...... Greg Satell5. Microsoft ReOrg – Crafty or Confusing? .…………………..…...…...……… Adam Hartung6. (Mis)understanding Technology… ………………………………..…………..…. Greg Satell7. The Design Manager Comprehensive Role in Innovation Process ……...…. Nicolas Bry8. Innovation is All Relative …………………………………………......…….. Kevin McFarthing9. Using Books as Tools ……………………………………………….…….…...….. Julie Anixter10. Innovative Feelings ………………………………..……..…...…..…..…. Jeffrey BaumgartnerYour hosts, Braden Kelley, Julie Anixter and Rowan Gibson, are innovation writers, speakers andstrategic advisors to many of the world’s leading companies.“Our mission is to help you achieve innovation excellence inside your own organization by makinginnovation resources, answers, and best practices accessible for the greater good.”Cover Image credit: Mom Daughter Style
  3. 3. Innovators Challenge Orthodoxies: Elon MuskPosted on June 6, 2013 by Rowan GibsonGreat innovators tend to be contrarians. They have an almost innate tendency to challenge industry orthodoxies, upendconventional wisdom, and turn the seemingly “impossible” into the possible. For me, one of the greatest modern examplesof this is Elon Musk – of Paypal, SpaceX, and Tesla fame.If you didn’t catch Elon’s interview at the recent All Things Digital® conference, it’s a must-see video for anyone whoclaims to take innovation seriously.You can view the full video here.Let’s go back in time to the Wild Wild Web of the mid- to late-nineties, when it simply wasn’t safe or easy to move moneyaround online. Musk refused to accept that it had to be so, or that only giant financial services companies could come upwith a solution. So in March 1999 he decided to start his own Internet financial services company, called, whichquickly became one of the Web’s leading financial institutions. One year later, in March 2000, bought anotherInternet startup called Confinity and formed PayPal. In 2002, eBay bought PayPal for $1.5 billion. Today, Paypal is theleading global online payment transfer provider.
  4. 4. So what did Elon Musk do next? Sit back and enjoy his millions? Nope. He set out to take on some even bigger, andarguably much more important innovation challenges. Indeed, as Chris Anderson put it last year in a Wired magazineinterview, “he decided to disrupt the most difficult-to-master industries in the world”.The first of these challenges was reinventing space rocket technology – a field that wasassumed to be the exclusive territory of large government-funded organizations like NASA –with the audacious goal of reducing the cost of rocket launches by a factor of 10. Anotherchallenge was reinvigorating space exploration itself (NASA’s efforts were being choked bycontinuous budget cuts), with the even more audacious goal of launching a privately-fundedmanned mission to Mars within 10 to 20 years. In June 2002, Musk founded SpaceX with$100 million of his early fortune, and set out to redesign space rockets and space explorationfrom scratch, challenging a plethora of orthodoxies and assumptions that had been around since the 1960s.His initial and most fundamental question was “Why do space rockets have to be so expensive?” Musk took a look at theactual material cost of a space rocket – the aluminum alloys, titanium, copper, and carbon fiber – and found that itrepresented only about 2 percent of the typical price of the rocket itself. So, having decided that this was a crazy andunacceptable ratio, he set out to design and build his own space rockets (!) at a fraction of the normal cost.In the process, Musk identified all kinds of absurdities in the aerospace market.
  5. 5. He found that it was largely bogged down by bureaucracy, and locked into legacy technologies from the past, which waskeeping prices unnecessarily high. By challenging these absurdities, Musk was able to figure out ways of doing things thathe calculates could save US taxpayers at least a billion dollars a year.Over the last decade, Musk’s SpaceX team has designed, built and launched a whole series of next-generation rocketsthat have literally changed industry economics. In 2008, NASA awarded SpaceX a $1.6 billion contract for 12 cargo flightsto and from the International Space Station, effectively replacing the Space Shuttle. And on May 25th, 2012, SpaceXmade history when its Dragon spacecraft became the first commercial vehicle in history to successfully dock with theInternational Space Station.Another important question Musk asked was, “Why can’t space rockets be reusable?”. Most people think the spaceshuttle was reusable, but in fact the main tank was thrown away after every flight, and the refurbishment of other partsbefore each new mission was so expensive that the shuttle actually cost four times more than an expendable rocket withits sequentially ejected stages.
  6. 6. Musk’s argument is that full and rapid reusability is “the fundamental thing that’s necessary for humanity to become aspace-faring civilization. America would never have been colonized if ships weren’t reusable.” So SpaceX has made thisanother primary goal. In 2010, it became the first private company to successfully launch a spacecraft into Earth’s orbitand then bring it back. And now Musk is testing his incredibly ambitious “Grasshopper Project”, which is a huge Falcon 9rocket that can take off, go into orbit, then turn around and return to the launch site, landing vertically, like something froma 1950s Sci-fi movie.All of this has been just a precursor to Musk’s ultimate goal of colonizing space.SpaceX’s first manned flights – under a NASA award – are expected in 2015. And, after radically reducing the cost ofspace flight and making rockets reusable, Musk’s original question “Why can’t we send people to Mars?” (the questionthat drove him to found SpaceX in the first place), doesn’t seem so ridiculous after all.Oh and, by the way, in his spare time Elon Musk is also reinventing the way we drive. In 2003, he co-founded TeslaMotors to create affordable mass market all-electric vehicles for mainstream consumers. Ten years later, his Tesla ModelS is the third best-selling luxury car in California (the biggest economy in America and the 12th largest in the world), afterMercedes and BMW, with a 12.7% share of the market.The Model S has received the highest Consumer Reports score of any car since 2007, and has picked up numerousawards. Tesla has understandably become a favorite on the NYSE, with the stock up 185% this year (2013), and 72%over the last month alone. Shares are up 447% since the company went public in late June 2010. In fact, Tesla’s market
  7. 7. capitalization has risen by more than $4 billion since May 8, hitting a recent high of $10.7 billion, putting SpaceX on a par(in terms of market cap) with Staples, Tiffany and Whirlpool. The company has recently raised a billion dollars of newcash, and has paid off its half-a-billion dollar federal loan (part of Obama’s clean energy program) almost a decade early.Not bad for a venture that everyone in the automobile industry predicted would be a disaster.Again, Musk’s whole success story is based on his propensity for challenging industry orthodoxies. In the “All ThingsDigital” interview mentioned earlier, he talks about two false assumptions that have dominated the thinking of Detroit’ssenior executives for decades. First, “that you couldn’t make a compelling electric car – one that was aestheticallyappealing, long-range, and high performance.” And, second, “that even if you did all those things, people would still notbuy it because it was electric.” There also were other deeply-held and widely-shared beliefs that had put the brakes on theelectric car opportunity for years (following GM’S failed foray into this space in the 1990s with the EV-1). Musk had beentold, “You’ll never be able to bring it to market, you’ll never be able to produce it in volumes, and you’ll never be able tomake a profit.” But, although it’s early days and the jury’s still out, it would seem that these industry “experts” may all havebeen completely wrong.In addition to transforming space travel and automobiles, Elon Musk is transforming energy with SolarCity, a startup thatleases solar-power systems to homeowners as well as educational, commercial and governmental users. And he has alsohinted at another breakthrough project he has been working on in secret, called Hyperloop. He admits that he was irritatedwhen he found out about the Californian government’s proposal to invest $60 billion in a bullet train project from LA to SanFrancisco, because, as he argues, it would be “the slowest bullet train in the world at the highest cost per mile”. As analternative, Musk is proposing a hypothetical mode of high-speed transportation that he describes as a “cross between aConcorde and a railgun and an air hockey table”. He estimates that the cost of his SF-LA Hyperloop would be about $6billion, one tenth as costly as the proposed high speed rail serving those cities.“We have planes, trains, automobiles and boats,” Musk says. “What if there was a fifth mode?”. And here is his owntantalizing description of this “fifth mode of transportation”:“How would you like something that can never crash, is immune to weather, it goes 3 or 4 times faster than the bullettrain… it goes an average speed of twice what an aircraft would do. You would go from downtown LA to downtown SanFrancisco in under 30 minutes. It would cost you much less than an air ticket or than any other mode of transport. I thinkwe could actually make it self-powering if you put solar panels on it, you could generate more power than you wouldconsume in the system. There’s a way to store the power so it would run 24/7 without using batteries.”Nobody knows exactly what Musk has in mind. But his track record as an innovator affords him enough credibility to betaken seriously, even if he’s talking about “a ground-based Concorde” or a kind of “railgun” without rails, that can travel atspeeds of more than 685 mph (1,102 km/h). Let’s face it, with ideas like these, anyone but Elon Musk would bediscounted as a nutcase. But it’s exactly by delivering on his big, radical ideas (remind anyone of Steve Jobs?) that he
  8. 8. has become such an innovation icon. This week, Rolfe Winkler of The Wall Street Journal wrote, “Each time Mr. Muskdelivers a better, less-expensive electric car or launches another rocket successfully, he proves his doubters wrong”.Jon Favreau, director of the first two Iron Man movies, famously modeled the on-screen character of Tony Stark, theeccentric billionaire inventor, on Musk. And in an article for Time magazine’s “100 Most Influential People in the World”,Favreau described Musk as “a Renaissance man in an era that needs them.” That’s as good a description as any for thisremarkable innovator.INVITATION FROM THE AUTHOR:“Challenging Orthodoxies” is one of The Four Lenses of Innovation I describe in my bestselling book Innovation to theCore (Harvard Business Press) – the other three lenses are “Harnessing Trends”, “Leveraging Resources”, and“Understanding Needs”.I’m currently collecting other compelling examples of “Challenging Orthodoxies” from all kinds of companies,industries and individual innovators. If you have a brief case, example or story you want to share, either from your ownexperience, reading or research, or from your own company, I’d love to hear from you either by email or as a comment on this article. And of course I’ll give you a big, personal acknowledgment inmy upcoming book, which is published next year. So, what are the one or two best innovation examples of“Challenging Orthodoxies” you can think of?Email me or simply comment on this article today.image credits:; teslamotors.comRowan Gibson, co-founder of, is one of today’s foremost thought leaders on business innovation.He is co-author of the bestseller Innovation to the Core and a much in-demand public speaker in 60 countries around theworld. You can follow him on Twitter @RowanGibson
  9. 9. A Brilliantly Simple Way to Boost our CreativityPosted on June 8, 2013 by Jerome ProvensalPsychological DistanceIn this fascinating Scientific American article, the authors (Oren Shapira andNira Liberman) tell us that creativity is not bound by the sole innatecharacteristics of an individual and can in fact be changed based on situationand context.Consider this experiment: 2 groups of participants from the Indiana Universitywere asked to list as many different modes of transportation as possible. Thefirst group was told that the task had been developed by Indiana Universitystudents studying in Greece and the second group was told instead that thetask had been developed by Indiana University students studying in Indiana. The first group was able to generate morenumerous and original modes of transportation that the second group.How can such a minute detail have any significant influence on creativity?!This phenomenon is referred as “Construal Level Theory (CLT) of Psychological Distance”, i.e. anything that we donot experience as occurring now and here. Attempting to take another person’s perspective or by thinking of a question asif it were unreal and unlikely, also fall in to that category of “psychological distant”.According to CLT, psychological distance affects how we mentally represent things, where distant things are representedin an abstract way. Once classified as abstract (vs. concrete), it seems that the mind get an extra boost of creativity insolving or manipulating those abstract things.Studies have also shown that projecting an event into the remote future can enhance creativity. In a series of experimentsexamining how temporal distance affects performance of insight and creativity tasks, participants were asked to imaginetheir lives a year later (distant future) or the next day (near future), and then to imagine working on a task on that day inthe future. Once again, participants who imagined a distant future were more creative and insightful.Finally, evidence shows that study participants were more successful at solving problems when they believe that theywere unlikely to encounter the full task.
  10. 10. These findings have interesting practical implications. One can take simplesteps to increase creativity by: travelling (in person or just thinking about it) to faraway places, envisioning distant future and considering improbable alternatives to reality.So, next time you are stuck on a problem that requires creativity, just picture yourself in a faraway place, in a far future,dreaming up of unlikely scenarios.Now, if you do this in a shower, there will be no stopping you!Questions/Comments? Use the comment box below.image credit:érôme Provensal is Director of Software Development for a leading FinTech company and blogs from LightBulbBites.He is a Software Engineer by training and passion, with a MS in Computer Science and IT Systems from UniversitéPierre et Marie Curie. Born, raised and educated in France, he’s resided in the US (Los Angeles) for 20+ years.
  11. 11. Phone as Bank: Are You Ready for Disruptive Innovation?Posted on June 7, 2013 by Holly G GreenDoes your bank fit inside your cell phone?If not, it soon will. And if today’s banks don’t come to terms with this fact very soon (as instarting yesterday), they may no longer exist in 10 or even five years. How’s that fordisruptive innovation?I just finished reading Bank 3.0 –Why Banking Is No Longer Somewhere You Go ButWhat You Do by Brett King. If this book doesn’t convince you that the world is changingfaster that most of us can imagine, nothing will! It also puts to rest a common thought bubble that many business leadersare desperately clinging to: new technologies may shake things up a bit, but they won’t disrupt my industry.In his well-researched book, King asserts that the mobile phone (in conjunction with the Internet) is causing a shift in bankpractices and distribution models like nothing that has come before. Very soon, this will result in a highly mobile, portablebanking world that is light years away from the traditional model of delivering goods and services through branch offices.Banks that fail to adapt to this new model will be replaced by upstarts (i.e., industry outsiders) that use new technologiesto completely redefine what it means to bank.The most fundamental change is that instead of heading to the nearest branch to conduct our banking needs, we willliterally carry our bank with us wherever we go. The institutions that succeed in this radically new banking world will bethose that use digital technologies to facilitate seamless mobile financial transactions whenever and wherever thecustomer wants.The implications, not just to bankers but to all types of financial institutions, are staggering!Imagine that you’ve spent the last quarter of a century developing and refining a business model that revolves aroundbuilding large numbers of physical branches. Now, your customer is saying, “I don’t want to come to your branchesanymore. I want to bank wherever I am. If you don’t offer that kind of mobility, I’ll take my business to someone who will.”This not only demands that banks change virtually everything they do, it also leads the playing field wide open for newplayers that aren’t encumbered with billion-dollar investments in branch assets and entrenched ways of thinking.How do you prepare for change of this magnitude in your industry? Here are a few suggestions as you head down thisuncertain but necessary path:Get out of denial. Disruptive change is here to stay. If it hasn’t hit your industry yet, it’s only a matter of time. So pull yourhead out of the sand and start thinking about how your industry will change and when.
  12. 12. Do an industry status check. How much has your industry changed in the last five years? 10? 25? Industries with theleast amount of change are the ripest for disruption.Examine your assumptions. The more you’re absolutely, positively sure you know what your customers want, theyharder it is to let go of old ways of thinking. When was the last time you checked your thought bubbles against real,quantifiable data?Expand your idea of competitive threats. Stop focusing just on existing competition and start looking at where youmight be vulnerable to threats outside your industry. For example, VISA and Mastercard require a huge, globalinfrastructure for their credit card transactions. Very soon, however, all that will be required to facilitate payments is a cellphone and the appropriate apps. Goodbye barriers to entry; hello wide-open playing field.Stop resisting social media. It took five to 10 years for companies to really figure out how to do business on the Internet.We’re now reaching that point with social media. Stop seeing it as just a tool for blasting marketing messages to yourtarget markets. Start exploring ways to use it to facilitate delivery of your products and services.Expand your data sources. Even when you expect disruptive change, it can be hard to see where it will come from andwhat it will look like. Make it a habit to gather data from outside your industry. Look at how other industries are gettingblown up and see how those lessons might apply to yours. Ask yourself, what new technologies could remove existingbarriers to entry in our industry? Who might jump in once they are gone?Personally, I’m looking forward to not having to go to a bank anymore. Which begs two very important questions. Whatare your customers looking forward to not having to do anymore? And who will give it to them — you or someone else?Call to action: Read Bank 3.0 and apply the principles to your industry.image credit: money.howstuffworks.comHolly is the CEO of THE HUMAN FACTOR, Inc. ( and is a highly sought after and acclaimedspeaker, business consultant, and author. Her unique approach to creating strategic agility, helping others go slow to go fast,will change your thinking.
  13. 13. 4 Ways Technology Is Transforming BusinessPosted on June 6, 2013 by Greg SatellWhen Clayton Christensen was a newly minted professor at HarvardBusiness School and began his famous study of why companies fail, hetook an unusual approach.He wanted to look not just at any companies, but successful ones. Thekind whose stocks were once high flyers and whose CEO’s graced thecovers of top business magazines. Not the losers, but the winners whostumbled and fell. What he found was startling.While he expected to see once great companies who lost their way, whathe found was firms that followed all of the best practices taught atbusiness schools like his. In other words, he found that technology shiftscan radically change business principles. Today, as the technology continues to evolve, we need to take these four shiftsinto account.1. We Think in Linear Terms, but Technology Moves at an Exponential PaceBusiness schools teach us to be logical and methodical, but the truth is that we’re not as rational as we’d like to think.Executives need to make thousands of decisions and speed is important, so we take short cuts, relying on rules of thumbto fill in the gaps in our data.Therefore, we often extrapolate, using personal experience to make common sense judgments. The problem is thattoday’s business environment is fraught with S-curves and non-linear digital laws, not the step-by-step advance that weexperience on a journey in the physical world.What’s driving the change is the increasing informational content of our products and services. We used to operate in aneconomy of atoms, in which value was created by transforming matter and energy. Nowadays, value is often created bydesign through informationally driven technologies such as CAD software, 3-D printing and genomics.Technology pioneer Ray Kurzweil predicts that in the future, “all technologies will essentially become informationtechnologies, including energy.” So exponential rates of progress will increasingly become the norm.
  14. 14. 2. Scale Advantages Have DiminishedBanks used to be situated in large, ornate buildings that radiated size and power. The idea was that scale meant safety.Doing business with a big company meant that you could be sure that they would be around in the future and could standby their promises. In those days, no one ever got fired for buying IBM.That was then, this is now. Of the 500 companies on Fortune’s original list of the largest companies, only 71 were stillthere as of 2008 . Their scale provided little insulation from market forces. Meanwhile, companies like Google, Facebookand Instagram spring up out of nowhere, becoming billion dollar companies overnight.That’s the essence of the new semantic economy. Upstarts can get access to resources that used to be available only tolarge ones. Whether it’s infrastructure in the cloud, outsourced manufacturing or capital from angels, VC’s andcrowdfunding, very few industries still have significant barriers to entry.About the only real advantage that incumbents have these days is the ability to hire lobbyists through trade associationsand that is often more a sign of weakness than of strength.3. Business Models No Longer LastIn the industrial age, a company’s business model didn’t change much. The way a firm would create, deliver andcapture value could stay fairly constant for generations. The practice of management was mostly focused on execution. Ifyou could move men and material efficiently, buy for a dollar and sell for two, you’d be successful, sometimes enormouslyso.As Saul Kaplan rightly points out in his excellent book, The Business Model Innovation Factory, that’s no longer true.We have come to expect a number of upheavals in any given industry during the course of a career or even within adecade. With scale advantages disappearing, no one is immune. We all have to adapt.
  15. 15. What’s more, the process is accelerating. As technological cycles compress and planning cycles struggle to keep up,we need to experiment more and plan less. This is creating a strategic shift where strategy becomes more emergent,collaborative and Bayesian.4. The Lunatics Run The AsylumWay back in 1969, while hippies were making their pilgrimage to Woodstock and Niel Armstrong was preparing for hismoonwalk, Peter Drucker was predicting the oncoming of a new age, which he called the knowledge economy, wheremanagers would have to supervise subordinates who had expertise that they themselves lacked.One of the key ramifications that he foresaw was that we have to treat almost everyone as if they were a volunteer. Noamount of monitoring and auditing can suffice. Control becomes a dangerous illusion in a knowledge economy.The result is we’re at the mercy of the lowest common denominator. No one cares what the CEO says in the annual reportif the front line people aren’t performing well and making good decisions. Business moves too fast and is far too complexfor rules and regulations to drive competent performance.The lunatics run the asylum, the best that managers can do is help them run it right.
  16. 16. The Ramifications of an Information Economy and Accelerating ReturnsWhile there is no lack of discussion about the digital age, I’m not sure that we’ve fully accepted the consequences of thetransition from atoms to bits.It’s not just that technology is moving faster, the rate of change is actually accelerating and that alters the logic bywhich we need to operate. Our intuition and experience lead us to assume a much slower pace.Further, as the informational content of products and services increases, the economics change. While material andenergy costs become less important, the information component is becoming exponentially more efficient. We’ve seenthis in computer hardware and software, but now we’re seeing it in life sciences and even manufacturing.Everywhere you look, efficiency is being automated. From robots in factories to pattern recognition software thatautomates analytical tasks, machine capabilities are replacing human ones in every area except one: our ability to interactwith each other. That’s the essence of the new passion economy.In a fully automated age, the only truly valuable asset will be the human spirit.image credit: hbr.comGreg Satell is an internationally recognized authority on Digital Strategy and Innovation. He consults and speaks in theareas of digital innovation, innovation management, digital marketing and publishing, as well as offshore web and appdevelopment. His blog is Digital Tonto and you can follow him on Twitter.
  17. 17. Microsoft ReOrg – Crafty or Confusing?Posted on June 8, 2013 by Adam HartungMicrosoft CEO Steve Ballmer appears to be planning a majorreorganization. The apparent objective is to help the companymove toward becoming a “devices and services company” aspresented in the company’s annual shareholder letter lastOctober.But, the question for investors is whether this is a crafty movethat will help Microsoft launch renewed profitable growth, or isit leadership further confusing customers and analysts whileleaving Microsoft languishing in stalled markets? After all, theshares are up some 31% the last 6 months and it is a goodtime to decide if an investor should buy, hold or sell.There are a lot of things not going well for Microsoft right now.Everyone knows PC sales have started dropping. IDC recently lowered its forecast for 2013 from a decline of 1.3% tonegative 7.8%. The mobile market is already larger than PC sales, and IDC now expects tablet sales (excludingsmartphones) will surpass PCs in 2015. Because the PC is Microsoft’s “core” market – producing almost all thecompany’s profitability – declining sales are not a good thing.Microsoft hoped Windows 8 would reverse the trend. That has not happened. Unfortunately, ever since being launchedWindows 8 has underperformed the horrific sales of Vista. Eight months into the new product it is selling at about halfthe rate Vista did back in 2007 – which was the worst launch in company history. Win8 still has fewer users than Vista,and at 4% share 1/10th the share of market leaders Windows 7 and XP.Microsoft is launching an update to Windows 8, called Windows 8.1 or “blue.” But rather than offering a slew of newfeatures to please an admiring audience the release looks more like an early “fix” of things users simply don’t like, suchas bringing back the old “start” button. Reviewers aren’t talking about how exciting the update is, but rather wondering ifthese admissions of poor initial design will slow conversion to tablets.And tablets are still the market where Microsoft isn’t – even if it did pioneer the product years before the iPad. Bloombergreported that Microsoft has been forced to cut the price of RT. So far historical partners such as HP and HTC haveshunned Windows tablets, leaving Acer the lone company putting out Windows a mini-tab, and Dell (itself struggling withits efforts to go private) the only company declaring a commitment to future products.
  18. 18. And whether it’s too late for mobile Windows is very much a real question. At the last shareholder meeting Nokia’sinvestors cried loud and hard for management to abandon its commitment to Microsoft in favor of returning to oldoperating systems or moving forward with Android. This many years into the game, and with the Google and Appleecosystems so far in the lead, Microsoft needed a game changer if it was to grab substantial share. But Win 8 has notproven to be a game changer.In an effort to develop its own e-reader market Microsoft dumped some $300million into Barnes & Noble’s Nook last year.But the e-reader market is fast disappearing as it is overtaken by more general-purpose tablets such as the Kindle Fire.Yet, Microsoft appears to be pushing good money after bad by upping its investment by another $1B to buy the rest ofNook, apparently hoping to obtain enough content to keep the market alive when Barnes & Noble goes the way ofBorders. But chasing content this late, behind Amazon, Apple and Google, is going to be much more costly than $1B –and an even lower probability than winning in hardware or software.Then there’s the new Microsoft Office. In late May Microsoft leadership hoped investors would be charmed to hear that1M $99 subscriptions had been sold in 3.5 months. However, that was to an installed base of hundreds of millions ofPCs – a less than thrilling adoption rate for such a widely used product. Companies that reached 1M subscribers from astanding (no installed base) start include Instagram in 2.5 months, Spotify in 5 months, Dropbox in 7 months andFacebook (which pioneered an entire new marketplace in Social) in only 10 months. One could have easily expected amuch better launch for a product already so widely used, and offered at about a third the price of previous licenses.A new xBox was launched on May 21st. Unfortunately, like all digital markets gaming is moving increasingly mobile,and consoles show all the signs of going the way of desktop computers. Microsoft hopes xBox can become the hub of thefamily room, but we’re now in a market where a quarter of homes lead by people under 50 don’t really use “the familyroom” any longer.xBox might have had a future as an enterprise networking hub, but so far Kinnect has not even been marketed as a toolfor business, and it has not yet incorporated the full network functionality (such as Skype) necessary to succeed atcreating this new market against competitors like Cisco.Thankfully, after more than a decade losing money, xBox reached break-even recently. However, margins are only 15%,compared to historical Microsoft margins of 60% in “core” products. It would take a major growth in gaming, plus a bigmarket share gain, for Microsoft to hope to replace lost PC profits with xBox sales. Microsoft has alluded to xBox beingthe next iTunes, but lacking mobility, or any other game changer, it is very hard to see how that claim holds water.The Microsoft re-org has highlighted 3 new divisions focused on servers and tools, Skype/Lync and xBox. What is tohappen with the business which has driven three decades of Microsoft growth – operating systems and office software –
  19. 19. is, well, unclear. How upping the focus on these three businesses, so late in the market cycle, and with such lowprofitability will re-invigorate Microsoft’s value is, well, unclear.In fact, given how Microsoft has historically made money it is wholly unclear what being a “devices and services” companymeans. And this re-organization does nothing to make it clear.My past columns on Microsoft have led some commenters to call me a “Microsoft hater.” That is not true. More apt wouldbe to say I am a Microsoft bear. Its historical core market is shrinking, and Microsoft’s leadership invested far too muchdeveloping new products for that market in hopes the decline would be delayed – which did not work. By trying to defendand extend the PC world Microsoft’s leaders chose to ignore the growing mobile market (smartphones and tablets) untilfar too late – and with products which were not game changers.Although Microsoft’s leaders invested heavily in acquisitions and other markets (Skype, Nook, xBox recently) those verylarge investments came far too late, and did little to change markets in Microsoft’s favor. None of these have createdmuch excitement, and recently Rick Sherland at Nomura securities came out with a prediction that Microsoft might wellsell the xBox division (a call I made in this column back in January.)As consumers, suppliers and investors we like the idea of a near-monopoly. It gives us comfort to believe we can trust in amarket leader to bring out new products upon which we can rely – and which will continue to make long-term profits. But,good as this feels, it has rarely been successful. Markets shift, and historical leaders fall as new competitors emerge;largely because the old leadership continues investing in what they know rather than shifting investments early into newmarkets.This Microsoft reorganization appears to be rearranging the chairs on the Titanic. The mobile iceberg has slashed a hugegash in Microsoft’s PC hull. Leadership keeps playing familiar songs, but the boat cannot float without those historical PCprofits. Investors would be smart to flee in the lifeboat of recent share price gains.image credit: cnetAdam Hartung, author of Create Marketplace Disruption, is a Faculty and Board member of the Lake Forest Graduate Schoolof Management, Managing Partner of Spark Partners, and writes for Forbes and the Journal for Innovation Science.
  20. 20. (Mis)understanding Technology…Posted on June 9, 2013 by Greg Satell…Why 140 Characters is Better than a Flying CarProgress is a funny thing. As Bruce Gibney noted in the Founders FundManifesto, we were expecting to have flying cars by now, but ended up with 140characters instead. What gives?And Mr. Gibney isn’t the only one to question progress. From Nassim Taleb toEvgeny Morozov, a fair number of highly intelligent and very well informedpeople are arguing that, for all of the hubbub, what we consider to betechnological progress isn’t really all that meaningful.I believe that much of the criticism stems from a misunderstanding about the function and purposeof technology.While skeptics are right to point out that the basic functionality of many inventions hasn’t improved for decades (or evencenturies), our goal for the future should not be to merely improve upon the past, but to advance beyond it.The Great DebateProbably the strongest critic of technological progress is Robert Gordon, who published an influential paper on thesubject. His argument is twofold. Firstly, he contends that we are facing six headwinds (e.g. aging population, debt,pollution, etc.) that reduce productivity growth.Secondly, he points to indications that the progress of the industrial age was driven by one-time events, such as thediscovery of the steam engine, the internal combustion engine and electricity, while the productivity improvements of thecomputer age have been short lived and won’t be able to overcome the six headwinds he identified.On the other side is Erik Brynjolfsson who argues in his book (along with Andrew McAfee) that information technologyprovides accelerating returns which are just beginning to filter into the physical world. In his view, the new industrialrevolution, driven by robots and algorithms, has just begun.
  21. 21. (Brynjolfsson and Gordon presented and then debated their arguments at TED 2013. I’ve included the videos at the endof this post).With all due respect to both men, I feel that their arguments fall short in that they focus on dueling statistics and largelymiss the underlying societal change that technology brings about. As longtime technology observer Rishad Tobaccowalaoften says, the future does not fit in the containers of the past.(Mis)Understanding TechnologyAt the heart of the confusion is a misunderstanding of what drives technology. Both Gordon and Brynjolfsson focus on thethings that we build. However, as Martin Heidegger argued in his landmark 1950 essay, we don’t build technology asmuch as we uncover it and put it to use in a particular context (a process he refers to as “enframing”).He gives the example of a hydroelectric dam:The hydroelectric plant is set into the current of the Rhine. It sets the Rhine to supplying itshydraulic pressure, which then sets the turbines turning. This turning sets those machines in motionwhose thrust sets going the electric current for which the long-distance power station and itsnetwork of cables are set up to dispatch electricity. In the context of the interlocking processespertaining to the orderly disposition of electrical energy, even the Rhine itself appears to besomething at our command.So the dam itself isn’t technology, but its agent, much like Facebook and Twitter aren’t social networks, but tools foruncovering particular truths about human relationships that have always existed. It is through unlocking those forces thatwe advance.Therefore, to compare computers with steam engines and electricity desperately misses the point. It is not the tools oftechnology that we should be focusing on, but the opportunities that we are presented with when natural forces arerevealed and put to good use.Building Dwelling ThinkingEverybody is deeply affected by the particular context in which they live and work. Gordon, for example, is a 72 year-oldeconomist who dedicated his career to the study of broad macroeconomic trends, while Brynjolfsson is a 51 year-oldeconomist who works alongside the technological wizards at MIT.
  22. 22. Heidegger, was a German who was deeply affected by World War II. In the late 40’s and early 50’s Germany was inshambles; physically, economically and in spirit. It was during this period that he wrote, Building Dwelling Thinking, inwhich he argued that rebuilding Germany would entail much more than the mere construction of edifices.However hard and bitter, however hampering and threatening the lack of houses remains, the realplight of dwelling does not lie merely in a lack of houses. The real plight of dwelling is indeed olderthan the world wars with their destruction, older also than the increase of the earth’s populationand the condition of the industrial workers. The real dwelling plight lies in this, that mortals eversearch anew for the nature of dwelling, that they must ever learn to dwell.It is much the same way with technology. The forces we uncover and put to use will have a profound effect on what webuild, how we live and how we think. Much like the automobile enabled suburbs, shopping malls and the consumerculture, the new information age is changing how we work, design our cities and see our place in the world.Therefore, it is misguided, if not dangerous, to try to judge new technology in the context of old paradigms. Completelydifferent forces are being uncovered and put to wholly distinctive uses. A supersonic flight will always be subject to thelimits of Newtonian physics; a Skype call is not.In my own particular context of spending most of my adult life in the emerging economies of Eastern Europe, I have beenable to see this effect up close. While it takes decades to build infrastructure, the benefits of the information age arediffused at lightning speed. Research suggests that the effect in Asia and Africa may be even more dramatic.However, it is not the forces of energy trapped in chemical bonds or even the awesome power of the atom that we arenow beginning to unleash, but human potential itself. While that may not manifest itself in large physical artifacts orsupersonic speed, it matters, possibly more so than anything that has come before.The Economics of Well-BeingThe advancements of the 20th century were impressive. Human and animal labor were replaced by machine power,enabling us to build massive structures and overcome the limits of time, distance and physical endurance. The result wasa massive increase in economic output and life expectancy and an equally important reduction in povertyHowever, while everybody would like to have more material wealth, there is a growing body of evidence that suggests thatbeyond a certain point it does us little good. For example, Nobel laureate Daniel Kahneman has found that there is littlebenefit from income gains beyond a household income of $75,000.
  23. 23. And so, by evaluating new technology through old metrics we ignore the economics of well-being and risk confusingvalue creation with value capture. Does a banker with a multimillion-dollar bonus really represent a greater contributionthan Tim-Berners-Lee or Linus Torvalds? .In a similar vein, is the Skype call between my child and her grandmother on another continent really worthless becauseits free? Should we evaluate fossil fuels, which are detrimental to our health and contribute to health care costs, the sameway we do clean technology that has a much smaller environmental footprint?In the final analysis, the value of a technology isn’t its capacity to improve on achievements of the past but to unlock thepotential of a better future.image credit: 140characters.ieGreg Satell is an internationally recognized authority on Digital Strategy and Innovation. He consults and speaks in theareas of digital innovation, innovation management, digital marketing and publishing, as well as offshore web and appdevelopment. His blog is Digital Tonto and you can follow him on Twitter.
  24. 24. The Design Manager Comprehensive Role in InnovationProcess – Patrick Le QuémentPosted on June 7, 2013 by Nicolas BryWhat is a design manager? Is it someone who is active in designmanagement?Well yes and no, or rather not completely as it implies only a part of theresponsibilities of a design manager and that, in some companies, designmanagement is not the Design department’s responsibility, it’s often in thehands of the Marketing activity.Design management and managing design teamDesign management is principally concerned with the brand, creating avision, developing it into a plan, deploying it, making regular checks on how it is progressing, correcting the trajectorywhenever that is necessary, making a step by step journey towards excellence, towards creating even more value… Aimtowards that nirvana for our brand that we all aspire to reach.(Also read the “design ladder” model which provides three levels for design: design seen as style, performance orstrategy)Yes but, a design manager what does that mean if it is not related to design management? The very notion of the verb«manage» is interesting, it suggests to achieve by whatever means, to carry on despite difficulties or again, to succeed inaccomplishing despite obstacles… as in : «I managed to get the last 2 tickets to the cup final».I manage a group of designers, or I’m the design manager? Managing a team of designers does not seem to warrantfurther explanations, or does it?Let me tell you that looking after the destiny of a team of designers, on a daily basis, is no picnic. Managing them is a littlelike watching with great attention a saucepan full of milk on a gas stove. Stressing! as the risk of spilling over if you waittoo long are real, and the consequences annoying, but if you take the saucepan off the stove too soon, the risk maybethat you will have to face a mug full of lukewarm milk, which I don’t know about you, but it always makes me feel sick.
  25. 25. So, what is a good design manager? It’s someone who will leave the saucepan on the stove long enough to be at the righttemperature, keeps himself focused, and takes a timely decision, what else?A timely professionalA design manager must be an excellent administrator who encourages beyond reproach behavior in order to avoid theprejudice associated with «arty types», which would reduce to ashes the carefully built edifice of creative excellence. If theteam of a design manager is often referred to «that bunch of artists» the thing is beyond repair. The worm is in the apple,it signals the end is not far, the fruit will soon crash rotten to the ground.A good design manager will know how to orient his team towards excellence in order for it to be acknowledged as a wellmanaged team. It will, for example, always arrive on time, (I never want to hear again : «We’re just waiting for Design»), itwill anticipate, prepare its presentation meticulously, communicate beforehand with its partners, its logistics will be be atthe very best level, it will not allow its monthly reporting systems to be late : be it its overtime statements, the projectsworked upon or its traveling expenses.
  26. 26. Its reflexions will be nourished by a 360° approach, whilst making the team’s right hemisphere work at full power, after all,it is their most precious asset. A good design manager will run his team like a high level sport organization, in order toobtain a highly creative output.And that, only allows you to have a right to speak, not to be relegated as being a group of teenagers, nice bunch ofpeople, but that cannot be trusted for the more serious stuff. But if, by chance, a design manager understands theimportance of passing the day to day examination, that finally allows the word designer to be associated with the wordrigor… Well then, the Design entity will not only have a say in the company but more than that, it will be able to claim astrategic role, if of course it has the intellectual qualities, that is…A listening leaderBut then what is a design manager as viewed by his own team? It’s someone who ensures that his team remains at it’shighest potential level of creativity. He will be attentive to maintaining a careful balance, knowing that a good team spirit issomething very delicate to nurture, particularly as today, teamwork has replaced the solitary genius.And yet the design manager knows that within his team, he has champions but also close seconds, and others… thateven though we may find the George Orwell citation from Animal Farm cruel : «Everybody is equal, but some are moreequal to others», a team could be looked upon as being made up of losers and winers, the losers being the majority ofthose whose projects have not been chosen. The design manager has to be able to handle such a sensitive momentwhen a designer learns that the project he has worked upon for so long has not been selected. He will make sure that noone loses face in this peer to peer relationship, he will know how to deal when that moment comes and someone realizes: «My project has not been chosen».
  27. 27. For design is a question of feelings, of engagement, of what I am, of the deeper me. So is this an impossible mission inwhich our design manager can only but fail? And what if… What if the design manager shared openly with the whole teamthe project? What if he sponsored each of the propositions made by the individual designers, encouraging each one to persue an individual path, promoting the notion of a design open house where each one is given a specific mission?For then, at the moment the choice is made by the client, the projects that have not been selected can no longer bedescribed as failures, they will have all taken part in the team’s exploratory phase, each one contributing to a part of thecreative overview, leading to the emergence of the selected project. And that is for me the key to a team in full bloom.In the case where designers work within multidisciplinary teams, be they as members of an innovation team, or perhapsa feature team, the design manager should not step back and abandon his team member to the manager in charge of theentity. This is what I have too often witnessed, and it invariably leads to the creation of animosity and organizationaldysfunctions. On the contrary, it’s all important that the design manager maintains an even closer relationship with thedesigner, helping him, coaching him to better contribute to the project team as a whole, and amongst other things : todistill creative free flowing approaches that might not be common practice to other members of the project team.So all is well, our Design team is in high spirits but, vis à vis the outside world, out there it can be cold and hostile, is ourradiant team performing at its best level as a whole, or is it starting to purr like a self satisfied cat?A holistic chefA design manager is not only responsible for the performance of his team at a given moment, he also has theresponsibility to make sure that, where it is going is not a dead end. How many design teams have corked theChampagne following a well deserved success without noticing that it was driving on an almost empty fuel tank, that it
  28. 28. was feeding itself on petits fours and forgetting to nourish it’s source of inspiration? How many designers entered theboulevard of mediocrity without even noticing?Without inspiration, without external influences coming from the parallel worlds that exist all around us, we designers canbecome rapidly experts in our thing, we can lose the contact with the real world, the people, their habits, the permanentlychanging culture, the appearance of weak signals.I’ve always been struck by this phenomena so often to be found with impassioned individuals, as for example automobiledesigners. Of course automobile design can become addictive, it can very quickly materialize in a closed world to outsideinfluences, it then becomes a selective passion which eventually turns out to be an exclusive obsession. That is why, inthe year 2000, when I clearly noticed that the creative inspiration of our team was waning, I proposed to our automobiledesigners to participate in a program called Trend Missions (which phonetically is close to Transmission): we took themout of their close environment, their comfort zone, we took them to the Milan Furniture Fair, we accompanied small groupsof 5 to 6 designers for a 3 day discovery, meeting and exchanging with remarkable designers coming from other planets,be it Ross Lovegrove, Tom Dixon, Ingo Maurer, Patricia Urquiola, Richard Sapper, or Jean-Marie Massaud…We also visited extraordinary cities like Stockholm, Barcelona, London, Berlin, Tokyo, Moscow or New York. Each timewe encouraged debates to take place, meetings, exchanges, and we made videos in order to share with those who werenot lucky enough to join the trip.
  29. 29. Soon enough the videos were shared with our closestcolleagues in other departments, Product Planing,Marketing, Advanced Engineering and then it spread likea bush fire, and the President himself was always keento have his review and ask pertinent questions.Thus Corporate Design was able to instill an overture, toencourage a far greater sense of curiosity to itsdesigners, which progressively turned into a new wind ofchange within the whole company. And that is also themission of a DESIGN MANAGER, which we then canwrite with capital letters.Patrick le Quément is a world famous Car Designer. Patrick’s motto is Design = Quality; his structural changes of Renaultdesign were to develop an independent and innovative formal language, turning Renault Design in an effective brandname.Patrick is now working as independant Designer, and President of the Advisory Board “the Sustainable Design School”.image credits:,,,,,blog.padmapper.comNicolas is a senior VP at Orange Innovation Group. Serial innovator, he set-up creative BU with an international challenge,and a focus on new TV experiences. Forward thinker, he completed a thesis on “Rapid Innovation”, implementedsuccessfully at Orange, and further developed at He tweets @nicobry
  30. 30. Innovation is All RelativePosted on June 10, 2013 by Kevin McFarthingMany words and expressions are clearly relative, such as “larger” or“smaller”. These are easy adjectives as they often invite the word“than” after them. Other words are more subtly relative, likeinnovation; not grammatically but inherently.These thoughts were crystallized in an online discussion with JorgeBarba on the subject of innovation failure. Innovation often failsbecause companies are beaten to market by a competitor whoscoops your offering on performance, timing or another element ofcompetitive advantage. The creative concept may have beencompelling and original; the project execution done perfectly to plan;the launch implemented flawlessly. You called everything right, except for one thing. Relative to your innovation,somebody else did it better.All innovation requires comparison to be successful. Companies often exhort their innovation teams to produce initiativesthat are, for example in the case of Unilever, Bigger, Better and Faster. It always begs the question, “than what”? Whatexactly will the new innovation surpass in terms of size, performance and speed? In an ideal world, the innovation that isintroduced to a particular market will work better, hit the market sooner and only as a result of that become bigger in termsof market share and revenue.Very often the comparators for the Bigger, Better and Faster are existing internal projects that don’t reach the company’sstrategic objectives. This is just a start but only tells you that you are improving against your own internal benchmark.Introspection may leave you with the warm fuzzy feeling that you’re getting better but doesn’t remove the vulnerability toexternal threat.It’s much better to take an external perspective. It enables prioritization of those projects that will make the biggestdifference; it will allow redirection of resource to improve those options with the greatest opportunity to have competitiveadvantage, and to those that are under the biggest competitive threat.The choice of comparator, whether company or product, is a crucial element of any innovation project. It’s very easy tostick with the “usual suspects” of existing products in existing markets from existing competitors. It may be fine to do this ifthe market in question is robust, growing and resistant to rapid change, commoditization and disruption. However if thereis an opening to disrupt a key element of the offering, innovation must take that into context as a minimum, and ideallyseize the opportunity presented by the change in market dynamics.
  31. 31. Consumers/users/customers are the ones to define the parameters by which innovation is measured. Whatever isimportant to them should form the basis for understanding and insight; what is then tested; and what is the focus forbeating current and future competition. In addition there should be some foresight to anticipate both opportunities andthreats for disruptive innovation.When Smith Corona decided to remain the producer of the world’s best typewriters they simultaneously defined thecomparative set for any future innovation. As a result they were totally disrupted by the rapid adoption of word processing.Despite attempts to produce word processing machines, they remained firmly in the mindset of a typewriter manufacturer.They didn’t define comparators on the basis of consumer understanding.So it is important to remember that innovation is always relative. In that context, companies should: Fully understand what matters to consumers/users/customers Define innovation on that user understanding Put more emphasis on external comparison than internal options Compare existing and likely future competition on user parameters Actively include potentially disruptive options when testing innovation comparatorsInnovation is relative, so always add “than x” after “better”.image credit: word collage image from bigstockKevin McFarthing runs the Innovation Fixer consultancy, helping companies to improve the output and efficiency of theirinnovation, and to implement Open Innovation. He spent 17 years with Reckitt Benckiser in innovation leadership positions,and also has experience in life sciences.
  32. 32. Using Books as ToolsPosted on June 10, 2013 by Julie AnixterWe are celebrating and shining a spotlight on how innovators use Books as Tools™, tools for driving the shifts thatinnovation requires, with a series of the same name, and founded in on our belief that books aren’t really books. They’reincendiary tools for personal revolution and organizational change. They can and often do serve as inspiration or impetusat the right time. They don’t have to be consumed all at once like a cold beer. But they can be. And when consumed bythe sip or the drink they are windows into the different worlds that form Innovation.Innovation is such emergent field that no one map can or will suffice because everyone comes from their own entry point.That’s why we created this series. The books we’ll highlight, some new and some old, have a particular magic forinnovators, or those who simply want to own the vision, skills and confidence to move to new ways of doing, being andliving. We’ll also be taking your suggestions, and look forward to being a big fat channel and discussion forum for the mostinspiring works by, about and for people who want to innovate. Whether you’re trying to: break through some intellectual concrete, find just-in-time expertise or new ways of working, compare and contrast architectural approaches to enterprise innovation in other industries, develop your own interpretation about what is needed now, or simply find some solace, a pick me up, when the world or your own resistance is just too much, there is nothingquite like a book.
  33. 33. To quote the philosopher and inventor Dr. Fernando Flores, “reading is a conversation with the author, to which we bringour concerns.” And it seems we have no shortage of concerns when it comes to how to innovate. Which is where Booksas Tools™ began.We’re Aiming for a Non-Exhaustive Lexicon of InnovationDid We Say We Plan to Go DeeperEach of these categories is drawn from, and against the challenges of meeting organizations where they are – across thespectrum of challenges they’re facing and the relative sophistication of their experience and going in knowledge.Conversations with the Authors is the Start. As you know, we started with How Stella Saved the Farm by Chris Trimbleand Vijay Govindarajan.St. Martins’ Press and the International Thought Leaders Network, sponsored a series of Web Chats with Chris that manyof you have participated in…we started with a great spirit of discovery, and here’s what we’ve learned…there is anappetite on the part of both the authors and our audience to talk about how to usea book to drive change, where the ideas came from, what it was like towrite a different kind of book (a fable!) and so much more. This led to anow ongoing series of terrific small group discussions via
  34. 34. Abobe Connect (no firewall issues or software to download.) We will be doing more author Web Chats,sponsored or not…this has been our practice field and we’ll do our final one for the summer this Thursday,June 13 at noon edt, on How Stella Can Engage Your Students. You can join us by registering here.And of Course, the Back Stories – How to Use these Books as Tools ofInnovationIn which we highlight one book from just three of the six categories and how it can be used it to lessen innovation anxietyand stoke your courage to act. Sometimes you need to know where to start. For each of us, the innovation journey startsin a different place. When an organization is taking a first step, and many are, the validation of the past is useful, and quitecomforting. My friend the author and meta-communicator Judith Glaser is currently deconstructing the US Constitutionthrough the lens of Conversational Intelligence™, and neuroscience – to understand how this collective conversationeven occurred much less transformed history. It’s part of her life’s work – and she, like many of us, likes to ‘look back tolook forward.’[2]Historical Contextual Enterprise Team The Work PersonalI’ve used Arie De Geuss’s book, The Living Company. As head of planning for Royal DutchShell he found himself wondering “what keeps companies ALIVE?” This book summarizes theresearch he commissioned at Royal Dutch Shell to answer the questions: how manycompanies have lived to be over hundred years old? If organizations were species, how manyreally thrive and persist (it’s a very small number) and why? What he learned has profoundimplications for leaders making decisions about where and now to invest. It’s sober. One ofthe four characteristics was a strong balance sheet or “cash in hand,” while still allowing“tolerance at the margins.” That this came from Royal Dutch Shell, which has been a successful performance enginecompany with a rep for imbedding innovation makes the book all the more powerful a reference: it can be done.Historical Contextual Enterprise Team The Work Personal
  35. 35. When we intend to embrace innovation, where do we begin? The five books in this categoryeach provide sweeping, diverse interpretations of the innovation landscape – the state of thediscipline today. They each come from thinkers and doers who’ve honed their perspectives onthe anvil of the world’s most complexcompanies. One timeless example,Geoffrey Moore’s Crossing the Chasm,operationalized Everett Rogers’Diffusion of Innovation research and“made the historic and elegantly obvious argument that there is achasm between the early adopters of the product (the technologyenthusiasts and visionaries) and the early majority (the pragmatists).Moore explored those differences and suggested attitudes and techniques to successfully cross the “chasm.” Thosedistinctions are still extremely useful, still very much with us as short-hand, today, explaining why innovation must beapproached systematically.Historical Contextual Enterprise Team The Work PersonalWhile the five books in this category could each be used a primer for architecting and implementinginnovation inside of large organizations, The Lean Startup is extremely important right now as atool of change, because it’s focused on capabilities that are most often missing or atrophied inenterprises – specifically the way of working that agile software developers use: the disciplinedlearning, customer testing and iteration of new products and services. Author Eric Ries says:“Too many startups begin with an idea for a product that they think people want. They then spendmonths, sometimes years, perfecting that product without ever showing the product, even in a veryrudimentary form, to the prospective customer. When they fail to reach broad uptake from customers, it is often becausethey never spoke to prospective customers and determined whether or not the product was interesting.”This is not just true of startups, this is true of very large corporations and explains in part the large failure rate of newproduct and service introductions. Stay tuned…and let us know if you’d like information about our discussions with theseand many more authors by signing up here.Time to tool up and hit the books![1] [2] Judith Glaser; image credit:
  36. 36. Julie Anixter is a principle at Think Remarkable and the executive editor and co-founder of Innovation Excellence. She alsoserves as Chief Innovation Officer of Maga Design, a leading visual information mapping firm.The co-author of three books,she’s working on a fourth on courage and innovation. She worked with Tom Peters for five years on bringing big ideas tobig audiences. Now she works with the US Military, Healthcare, Manufacturing and other high test innovation cultures thatmake a difference.
  37. 37. Innovative FeelingsPosted on June 11, 2013 by Jeffrey BaumgartnerWhen it comes to feelings, business innovation gets it all wrong. It takes intoaccount feelings when it should not and then ignore feelings when it shouldtake them into serious consideration.When You Can Ignore FeelingsTypically, the only time business innovation takes into account feelings isduring the ideation phase. Brainstorming, for instance, prohibits the criticismof ideas because to do so might hurt brainstormers’ feelings and inhibit themfrom sharing more ideas. Although this belief is widely held and applied innumerous ideation processes, it has been demonstrated not to be true1. Criticism of ideas, followed by debate anddiscussion results in a higher level of creativity. Moreover, in my own experience, allowing criticism does not lead to hurtfeelings. Rather it leads to in depth discussion of promising ideas.Likewise, most on-line suggestion schemes, crowdsourcing tools and idea management tools include a voting systemwhereby participants can vote up ideas they like. However, unless these on-line tools specify criteria for voting (and I haveyet to see a product which does so), voting is based on feelings. If you like an idea, if you feel good about an idea, youvote for it. However, on-line voting has been demonstrated to be useless at identifying particularly creative or even goodideas2.When You Should Not Ignore FeelingsAs I’ve written here in the past, people do not like creative ideas3. That seems to be because creative ideas mean changeand that change is often outside the control of the people affected by the change. A classic example of this is Coca Cola’sinfamous launch of New Coke in 19854. The people at Coca Cola researched people’s taste preferences thoroughly andused that information to change the recipe of their classic drinking product. In theory, this innovation should have workedfine. They had a product with massive global sales and they improved the flavour to make it even better. They evenproved people preferred the new flavour in blind taste tests.What the researchers neglected to do, however, was to take into account Coca Cola’s customers’ feelings about theoriginal soft drink. Sure, in blind taste tests, such people might have preferred the new drink. But when they saw that thecompany had changed their favourite drinking product, people felt upset. They felt hurt. Moreover, this change wasoutside of their control. Initially, Coca Cola did not ask their customers if they wanted a new drink. They did not offercustomers a choice. Customers had to drink the new Coke because the old one was not available.
  38. 38. As you probably know, this was a disaster. Customers were upset and they bought less Coke. Ironically, they bought coladrinks from other brands, even though that also would have tasted different from the original coke — furtherdemonstration that this dislike of the changed product was about feelings and not taste.Eventually, realised their mistake. They renamed the new drink “Coke II” and the original drink was reintroduced as “CocaCola Classic”. People had a choice and they chose Classic. Indeed, Coke II eventually disappeared from the shopshelves. By finally offering their customers a choice, Coca Cola probably saved their company!Customers’ FeelingsWhen you introduce a new product or change an existing product, your customers will have feelings about the newproduct. This will be based on the product itself as well as customers’ previous experience with your products and yourreputation. Consider Facebook. Every time the company makes a change in how it works, users are in an uproar. Theydon’t like the change. The liked the older version better. They did not get a choice and that irritates them. Users feel thatthe new version of Facebook has been implemented on them against their will. As a result, they simply do not like it — atleast until they get used to the new version. Then, they forget about the change until Facebook introduces anotherchange. Suddenly, the same users are in an uproar all over again! Suddenly, they prefer the version of Facebook thatthey complained about a few months ago. I suspect that if Facebook were to revert users to a older version of Facebook,users would again be in an uproar. That’s because people are not complaining about the functionality or quality of the newversion. It is the change, over which they have no control, that they do not like. People do not like change without controlor choice over the change.Employees’ FeelingsIf customers dislike innovative new ideas that result in change, employees truly hate such ideas. If customers feelunhappy about your new product, they don’t buy it. When employees dislike the operational changes that result from aninnovation, they cannot easily change job. They are stuck with the change.
  39. 39. This is why employees are often critical of new ideas that will change operations, particularly when those changes affecttheir own activities. Indeed, if you have ever sat in on a staff meeting when a manager announces a change, the initialreaction is almost always negative, even when the change theoretically makes employees’ work easier. Thecomputerisation of processes, for example, usually speeds up processes — however, there is typically a learning curvethat temporarily disrupts operations. In spite of the improvement in efficiency, you can be sure that employees willcomplain about the change. They do not have positive feelings towards change when they have no control over thatchange.What Can You Do?If your customers and your employees will dislike the change that results from your innovation, you might wonder whybother? What’s the point of innovating if no one likes the innovation. Unfortunately, if you intend to remain competitive intoday’s hyper-competitive market, you need to out-innovate your competitors.On a positive note, after a change has been implemented and people grow used to it, they soon forget their dislike.Facebook users quickly grow comfortable with the updates they hated a couple of months previously, readying them tocomplain about the next update!Employees too soon grow used to change. Moreover, in view of high levels of unemployment, many employees have nochoice but to accept change. But that does not mean they have to like it. And one danger you need to watch out for, wheninnovation changes operations, is employees who subconsciously sabotage change. For instance, a company islaunching a new accounting system that will streamline billing and make it easier for customers to pay. However, it willresult in substantial changes in operations in the accounting department. In order to initiate the system, the head of theaccounting department needs to provide a report together with key information. She may postpone the report, believingshe has more important things to do. Or she may present the key information in such a way that will make it more difficult
  40. 40. to implement the new system. She is not doing this intentionally. Rather, she does not like it that a new accounting systemis being thrust upon her and subconsciously she does what she can to impede the change.Clearly, your innovation efforts need to take into account the feelings of customers and employees. When evaluating newideas, do not just look at the metrics and the business analysis. Think about how those affected by the innovation mightfeel about it. If your customers love your product, they may hate any change. And if your customers hate your product (forinstance, people everywhere seem to hate their telephony companies!), they will be suspicious of any change and hate itby default!If you are lucky to have loved products, consider whether or not the new product retains enough of what our customerslove about your old product while at the same time being a sufficient improvement to bring in new customers? If yourcustomers hate you, ask if the change will make you seem like an even more heartless, evil organisation.Importantly, bear in mind that the thing customers and employees feel worst about is having change thrust upon them in away in which they feel they have no control. This is particularly true of employees. So, ask yourself, are there ways wecan make employees feel they have control over this change? Can you involve them in the evaluation process, perhapsgarnering feedback, so they feel they have some element of control in the implementation of a new idea? The dangerhere, of course, is that employees may provide only negative feedback, making it harder to implement your idea.You can also communicate to employees, in a sympathetic way, the complete story of why you are making the change,the benefit to the company and, most importantly, the benefit to the employees. You can sympathise about the initialstruggle to implement the change and show how once the change is fully implemented, it will be better for everyone. Youcan also use creativity. Run anticonventional thinking (ACT) or other creative ideation sessions to generate ideas abouthow employees can benefit from the change.For instance, a consultant implementing change in a school system came to me recently. He explained that teachers werereluctant to change their ways, even though research had shown the new methods would be better for students. I askedhim to think about how the change would benefit the teachers and suggested that he focuses some creative thinking onidentifying teachers’ benefits.Business Innovation Affects PeopleBusiness innovation affects people, lots of them: your employees, your customers, your suppliers and possibly even thegeneral public. People have feelings. If you disregard those feelings, you put your innovative efforts into jeopardy. So,don’t disregard feelings. Make them a key issue in innovation.References
  41. 41. 1. Matthew Feinberg, Charlan Nemeth (2008) “The ‘Rules’ of Brainstorming: An Impediment to Creativity?”, Institute for Research onLabor and Employment Working Paper Series (University of California, Berkeley) Paper iirwps-167-08; Jeffrey Baumgartner (2010) “Voting in On-Line Suggestion Schemes” Report 1033. “Everyone Loves a Creative Idea — Unless It Applies to Them” (2103) Report 1034. “New Coke” WikipediaJeffrey Baumgartner is the author of the book, The Way of the Innovation Master; the author/editor of Report 103, a popularnewsletter on creativity and innovation in business. He is currently developing and running workshops around the world onAnticonventional Thinking, a radical new approach to achieving goals through creativity — and an alternative tobrainstorming.
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