It's time to ask better questions.

An inherent obstacle to innovation is the context, culture, history and assumptions of a current process or business. Sometimes the harder someone works on a problem, the more elusive the solution becomes. Every once in a while, the person who has the most experience can solve a problem, but only if they don't respect their own experience. Some are able to question their own past success, but they are very rare people.

Quite often, there is a need for someone with less experience to look at a problem - someone who can see it for the first time, has little knowledge of the existing orthodoxies and can blithely question the most fundamental assumptions of success. Someone needs to bump the record player when the needle is stuck, but who can do that?

1. It can be helped by an external innovation expert - usually a consultant or coach who can look at the problem from the outside, bring in new insights from customers, or help guide internal teams through a process to see a problem and solution for the first time. They can ask questions for you.
   
2. Your competitors can do it for you. Usually, innovations are developed by new and unexpected competitors that have no respect for the past - they are able to ask, "Why are things done the way they are? Can't we do it differently and make it better?"
   
3. Your own employees can come up with innovations. But they usually need good questions to answer.

In order to understand better how organizations can improve innovation, let's look at each of these three methods.

1. Innovation Consultants

There are a great number of good consultants that can help organizations innovate - each with their own areas of focus and processes for stimulating innovation and commercialization of new ideas. It would be impossible to characterize them all at this point - but there is an interesting commonality: they all ask questions.

Whether consultants are questioning employees, competitors or customers, they are working to discover key aspects of the value chain, products, services and processes that can be fixed or changed in some way. Once the opportunity is identified, they are able to recommend solutions, test and refine them with customers, then commercialize.

The innovations themselves do not occur in a vacuum. Innovation consultants don't just come up with a good idea - they come up with questions that they either answer themselves or have answered by customers and employees.

How often does a public speaker give an average or sub-par presentation followed by a question and answer session where they become interesting or even dynamic?


It is an interesting phenomenon. No matter how little creativity or originality someone possesses or however ill-prepared they may be, when they are asked a good question, they can provide a good answer. This may be the result of an educational system that emphasizes answering questions, or it may be a more fundamental survival mechanism where human beings are hard-wired to solve immediate problems such as if there is no food, figure out how to get food.


However, if a problem is unclear, ill-defined, or not immediate - it becomes much more difficult to solve. That's why experienced speakers tend to prepare by developing un-spoken questions that they can then answer in their prepared remarks. They make the problem of: "give a good speech" more clear, defined and immediate by changing the problem to, "answer this question".


The same dynamic occurs when trying to prompt innovation. In a way, consultants are the motivational speakers of innovation. Isn't it curious that most innovation consultants are also persuasive presenters?


2. Competition


The very act of competing can force one to question the status quo, especially when the competitor is far from being the dominant player. The small competitor, in order to survive, must challenge reigning orthodoxies - otherwise they will be crushed by dominant players' resources.


No one could reasonably compete with Xerox's domination of big business copying - until Canon questioned the format, the price model, the sales channel - even the customer target and transformed the entire industry (becoming the number 1 seller of copiers in the process).


United and American Airlines defined what a commercial airline was - how to make money, how to operate their business, how to talk with their customers...until start-up Southwest Airlines questioned everything from ticketing procedures to boarding to meal service. Instead of asking themselves how to become the number 1 airline, they asked how they could get another round trip out of every airplane per day, how to better incent their employees for customer service, how to appeal to customers who rarely fly...and in the process they became the most profitable airline in the history of aviation.


The innovation advantage may very well go to the new entrant. It almost seems easier to challenge what one doesn't have in the first place. What do they have to lose? Unfortunately, small companies can lose everything if they are wrong. But if they succeed, they can often transform their industry. That's why many larger companies like GE, IBM, Microsoft and Google tend to acquire small companies and their innovative products once they have been proven successful. In effect, they've "outsourced" their innovation to smaller start ups.


As Xerox, United Airlines, General Motors and many others have discovered, however, it is somewhat risky to leave innovation to the competition.


3. Employee Innovation

When you ask a team of people the right question, it's amazing what they can come up with. An inspiring story about how teams can innovate comes from the experiences of Apollo 13. When flight director Gene Kranz needed to help the stranded astronauts build an improvised air filter, he assembled a group of engineers, presented the problem, made clear what the stakes were, presented all the items the astronauts had on board the capsule, then told them to come up with a solution. He asked a better question. He made the challenge specific.


When GE's jet engine unit asked customers about the repair of their jet engines and showed them how they were repairing those engines faster than ever - their customers told them something to the effect of, "I don't care how fast you repair the engines, I'm still not able to fly the plane until it gets back on the plane." The team of engineers at GE realized that they could probably deliver a faster turnaround if, instead of shipping the engine to the factory they brought the factory to the plane. By getting a specific challenge from their customers, they went from simply working faster to working smarter.


There are many innovation programs and initiatives going on inside organizations to encourage this kind of employee problem solving, but too often they don't deliver real innovation. They seem to ask too broad a question - something like, "how can we make our company number 1?" or "how can we reduce costs and increase revenues?", or even worse, "how can we become more innovative?" There seems to be too much of an emphasis on open brainstorming or collection of ideas and best practices. It is still possible to innovate without specific and immediate problems to solve, but it can be difficult at best. At worst, these kinds of programs either lead to small adjustments or to innovations that don't really matter to anyone beyond a very small interest group.


There is a better model to encourage innovation. Instead of asking for best practices, companies should learn to ask their employees specific questions - then reward anyone who answers them well. This process has been proven to yield incredible results.


In 1919, Raymond Orteig offered $25,000 to the first pilot who could fly non-stop between New York and Paris. There were no restrictions of how that pilot could develop his or her plane, how they flew it, or who financed them. A great number of entrepreneurs, pilots and engineers tried to answer this question. They used any number of strategies and designs, but ultimately, the innovation that helped create the $300 billion commercial aviation industry didn't come from a known organization or blue chip company. None of the airplane manufactures drove the innovation. Instead an unknown airmail pilot named Charles Lindbergh, experimenting with a simple plane design and powerful single engine, made the trip alone in 1927.


Recently, the X-Prize Foundation offered $10 million to whomever develops a production ready, reasonably priced car that gets the equivalent of 100 miles to the gallon and that can win a multi-day staged race across the country in the summer of 2010. A very specific, immediate question that will likely lead to the next blockbuster efficient car in the US. The industry has spent far more than $10 million trying to deliver this kind of innovation, but I won't be surprised if this investment will lead to a far greater breakthrough than GM or Chrysler could ever manage.

Beyond the X-Prize, there are a good number of organizations such as NASA, Google, Netflix and the Department of Defense who are asking questions and offering prizes to anyone who can answer them. They have found that asking a simple, direct and immediate question along with a financial incentive for whomever is willing and able to answer it, yields surprising innovation, productivity and speed to market all at a fraction of the cost of traditional R&D.

The impossible can become commonplace because someone asks the right question.

Therefore, a more effective innovation program inside companies would not ask for best practices or innovation ideas, it would ask simple questions and incent anyone and everyone to answer them.

No one wants to innovate - they have to.

Why would anyone want to innovate?

Despite the excitement of finding something new, despite the potential success of a breakthrough concept, despite the honor history affords to innovators like Thomas Edison, Steve Wozniak, Orville and Wilbur Wright, Madame Curie, Galileo, Henry Ford and many others, innovation remains a high-risk, difficult and painful process. Innovators routinely face mistakes, dashed hopes, financial stress, and constant uncertainty. It’s hard, painful, unpredictable, and sometimes even embarrassing. Innovations that are ahead of their time have a tendency to fail. Innovations that are too late are usually eclipsed by others. Recent history is filled with expensive and publicly known failures such as the Apple Newton, the Sony Betamax, credit default swaps, the Bush doctrine and Crystal Pepsi. Most organizations have any number of failed new projects and initiatives that no one really wants to talk about.

Most people and organizations aren’t very good at innovation. It requires them to challenge everything they know to be true, and it quite often doesn’t work.

It’s far better to continue doing things the same way you did before. It’s far more rational to keep things going as long as you can. It’s far easier to keep selling the same stuff over and over again to customers and clients. Why innovate, when you can just gradually improve? Why innovate if you can get better at what you are doing now? Why innovate when it might cannibalize your existing products and services. Why innovate if you can apply proven formulas to solve problems?

A terrific way to avoid actual innovation is to create an innovation or best practices program. Most programs ask employees to submit their innovation ideas through some kind of application process. Ideas are then collected centrally - sometimes through sophisticated database applications, sometimes through varying versions of the old suggestion box. Once collected, they are judged by a panel of some kind, to determine which ideas are awarded recognition, prizes and ultimately implementation.

Wonderful ideas are usually acquired in this kind of program, and very quickly, employees will figure out what kinds of ideas are most likely to win recognition and prizes....ideas that help reduce costs always do well, as do ideas that can easily and quickly be implemented - usually referred to as "low-hanging fruit". Employees feel like they are part of an innovative culture, managers feel like they are innovating their company, and everyone is rewarded for good ideas.

Programs like this are easy-to-do, inexpensive and a lot of fun. Unfortunately, they don't actually innovate. They can incrementally improve existing models, but they can't really create new ones.

It's a paradox of innovation and human nature: Everyone wants to innovate and wants to create breakthroughs, but they rarely do. Our governments talk up the need to innovate and our politicians note that our country's success is built upon constant innovation. Our businesses constantly claim innovation as a differentiator and as a key to success. Individuals talk about reinventing themselves, becoming better people, losing weight, becoming more enlightened or quitting smoking. Everyone wants to innovate...but unless they have to innovate, there are too many reasons not to.

Innovation sometimes reminds me of dance. When anyone witnesses a great dancer such as Fred Astaire, Margo Fonteyn, Mikhail Baryshnikov, Martha Graham, or Cyd Charisse, it is likely that they want to dance as well. Who wouldn't want to tap accross the dance floor like Fred Astaire with Ginger Rogers on your arm? Who wouldn't want to glide through the air as elegantly and beautifully as Cyd Charisse? Everyone wants to dance - just like everyone wants to innovate.

Professional dancing, however, is an incredibly difficult profession. It takes years to learn how to perform most dances even adequately. Dancers endure brutal days of practice, constant exhaustion, little time for intellectual or social pursuits, permanently damaged feet and destructive diets all for the chance to make little money in a short career that is over before they reach 35 years of age.

Although everyone may want to dance, very few actually go through the difficulties and sacrifices in order to become a dancer. This was very well understood by the choreographer George Balanchine who said, "I don't want people who want to dance, I want people who have to dance."

Innovation, like dance, doesn’t happen because we want it to happen. It happens when we have to do it...when there is no other choice.

Innovative people and organizations tend to become innovative for one of three reasons:

1. They are unable to function, compete or thrive within the existing model - so they change the model to suit themselves.

Individual innovators find themselves inventing new products, new ideas and new ways of doing things because they are incapable of thriving with the old ways. Even if they wanted to conform, it might not be possible for them to do so. Most innovators find it very difficult if not impossible to follow directions – instead, they find it easier to innovate. How well for example, would Richard Branson do if he applied for a job at an established Fortune 50 company? Could Steve Jobs fit in well as a manager at IBM? How often do entrepreneurs continue to serve as a manager when they are acquired by another company?

I recently spoke with a colleague that consults companies on innovation projects, and he confessed to me, "It would be so much easier if I could just do things the way everyone expects. I would probably make more money, I would have more time off, and I wouldn't be so stressed out all the time...but I don't know how to do that. I have to innovate, there's no other choice for me."

2. They are new to a market, organization or game, and can't hope to compete with the existing leaders - so they change the rules of the game to favor themselves.

Xerox dominated the copying business for decades. Whenever a new competitor like IBM tried to gain a foothold in that market, Xerox always won. They were just too big, had too strong a relationship with their customers, and had too much of a head start. But then came a camera company called Canon. They didn't bother to play at the Xerox game of selling large photocopiers to large businesses - instead they came up with a small, less productive, less expensive copier that small businesses could buy and put on top of a desk.

In a few years, the small business market became the small and mid-sized business market - then large companies realized that they would do better with a larger number of small photocopiers vs. a few large Xerox copiers. Canon is now the giant in photocopying, and Xerox is playing catch up.

Canon's innovation changed the rules of the game so they could win. Without innovating, they couldn't even enter the market - so they had to do it.

3. The environment has changed so much that an individual or organization can't thrive anymore, so they change to adapt to a new reality.

This is where almost everyone finds themselves today. The economy has fundamentally changed, and only those who innovate will survive, much less thrive. The current downturn reflects two fundamental assumptions that everyone depended on and built their organizations upon whether they realized it or not.

In the 1990's and into the new century, business models assumed, conciously or not, that there was an unlimited and reliable supply of energy. With oil easily available and less than the cost of bottled water, everything from manufacturing to professional services could do more in a larger geographic footprint at a lower price than ever before. Now, without a consistent supply and price, it is difficult to make those business models work as well as they did only a few years ago. Without cheap and plentiful energy, we have to innovate alternatives.

Also in the 1990's, equity and debt financing became so easy to obtain and so inexpensive that companies could create much higher margins from almost any activity. Whether we realized it or not, much of our activities were based on different forms of leverage. Now that capital is difficult to source and ultimately more expensive, we have no choice, we have to innovate what we do and how we do it.

Innovation only happens when there is no other choice. With the changing of our economy, many more companies and individuals have to innovate for the first time. In the past, a few individuals and companies innovated to make things better for themselves, to allow themselves to win when they didn't have all the cards in their favor. Now, everyone is in a position where they must innovate if they wish to survive.

Why would anyone want to innovate? They don't.

But they must innovate if they want to succeed.

Don't just throw money at it - innovate it.

One of the more exciting movies in 1978 was a film about Vietnam called "The Deer Hunter" directed by Michael Cimino.  It won five Academy awards that year, including best picture and best director.  Vincent Canby of the New York Times wrote:

"Michael Cimino's "The Deer Hunter" is a big, awkward, crazily ambitious, sometimes breathtaking motion picture that comes as close to being a popular epic as any movie about this country since "the Godfather."'

It seemed that this was the first time that a popular, mainstream Hollywood movie captured the national anguish of the Vietnam War in a way that many people could relate to and understand. Although Mr. Cimino had directed a successful film before, "Thunderbolt and Lightfoot", this was his first film that made everyone take notice.  It was a breakthrough for American popular culture as well as for Mr. Cimino.

The film cost about $15 million to make and grossed over $50 million. 

In 1980, Mr. Cimino's next film was released, Heaven's Gate. It was a breakthrough of another kind - one that almost destroyed his career as well as United Artists.  Vincent Canby's review from the New York Times included the quote:

"...an unqualified disaster..."

The film cost about $40 million to make and grossed less than $3.5 million.

Although there are many reasons why one film was successful and the other was not, (most of which I am not qualified to comment on), there is something instructive here for innovation:

New projects may not always do well when too much money is thrown at them.  

Although an investment is required - paradoxically, too much money can have a stifling effect. Innovation and problem solving on a movie set (or with a product or a company) is difficult and risky. When there is ample money involved, the tendency is not to risk it. One can always buy a solution if you have plenty of money to spare. Conversely, when money is scarce and resources hard to find, it is easier to take chances, to experiment and to innovate.  

Interestingly, there is a footnote to "Heaven's Gate".  Even though the initial release was not very successful, it spawned innovation anyway.  Jerry Harvey of the Z Channel (a cable pay TV channel) released a revised "Director's Cut" of the film that was reasonably successful with their subscribers as well as on VHS and DVD releases.  It may have been one of the first "Director's Cut" releases - and since then, "Director's Cut" VHS and DVD releases have enjoyed brisk sales for other notable films.  "Heaven's Gate, the Director's Cut" was a video marketing innovation.

My guess is that Mr. Harvey felt there wasn't that much money at stake to try something new with a movie that wasn't successful.  The risk was relatively low and the reward was high enough to make it worth while.

Innovation, whether it is in movies, in science, or in business, is a difficult, risky, dirty and often painful process.  If a situation is too easy - it might not be worth the trouble to innovate.  Most of the big innovations of the computer age seemed to have started in garages.  Some of the best ideas inside companies come from those pilot projects that few people even know about.  The most effective marketing can come from companies short on cash but long on need to reach out to new customers.

Here's a simple example that I came across recently that shows how a lack of money can encourage innovation:

Recently, my dentist of the last dozen years, (Dr. Shawn Post) handed me a stack of business cards.  Business in the current recession is challenging, as many patients are putting off their regular visits in order to save money.  He is the best dentist I have ever worked with and most of his other clients are as fiercely loyal as I am.  Over the years, I have referred a number of friends and associates to his care.

Like most small medical practices, he has limited resources for marketing his services, and no sales force to help find new clients.  Instead he decided to outsource his sales and marketing to his clients.  

On the back of each business card is a $50 gift certificate.  Any new client who brings the card in for a dental visit, will get $50 off.  Plus, anyone who gives this card to that new client will also get $50 off.  My dentist is paying his clients $50 for each new client they bring in!

The simplicity as well as the sophistication of this tactic is striking.  It is measurable, it leverages the fierce loyalty of his clients, and it undoubtedly will lead to new business.  All of this for the up-front cost of a box of business cards.

Of course, this kind of tactic wouldn't work for a successful Fortune 500 company...or would it?

Now that resources are tight and the need for new business more imperative than ever, all the right conditions are in place.  No more throwing money at a problem - now it's time to innovate.