What is innovation, really, and how do we get some?

Innovation is both more difficult and less mysterious than we have been led to believe.

Innovation goes far beyond the laboratory - far beyond Silicon Valley startups, institutes or technology incubators. Innovation is less an activity or product as it is a lifestyle or way of thinking. The best innovators are able to change their frame of reference, see a system, a process or a problem in a way that few others can - then find ways to manipulate, change and ultimately improve what they see. And their innovation can occur anywhere, anytime – lab or no lab.

Innovation can be high-tech; but more often it happens at the level of an individual charting a new path for their life, a company creating a new business model or a new way to sell to their customers, an organization finding a more direct path to their objectives. Innovation isn’t just the creation of a new technology, but also the everyday thinking required of anyone to survive and succeed in a rapidly changing environment.

Anyone can innovate and everyone must innovate…every day.

Too often, innovation is described as something done only by magical geniuses. Stories dwell mostly on the flash of insight, or "Eureka" moment. How many profiles of innovative companies describe the beginning with a brilliant ideas that led to great success? Scott Berkun, in his marvelous book, The Myths of Innovation, describes this as "They myth of epiphany"

"Even if there existed an epiphany genie, granting big ideas to worthy innovators, they would still have piles of rather ordinary work to do to actualize those ideas. It is an achievement to find a great idea, but it is a greater one to successfully use it to improve the world."

I worry that too many people are waiting for the "great idea" to solve their problems. For every Fortune 100 company that started from a brilliant invention in a garage - there are millions of people with great ideas that never went anywhere. And yet, entire industries have been built up to serve the faith of ideas. Consultants, executives and businesses spend money and time to brainstorm, to elicit and evaluate new ideas. Investors often make decisions based on a valuation of an idea or business model. Politicians are evaluated by voters based on the perceived value of their ideas.

And yet, the success of the company or the government is only partly determined by the quality of the ideas. Ultimately, inventors are only successful if someone is willing to pay for their invention. Businesses become profitable not because they have a great business model, but because they persuade enough customers to pay more for something than it costs. Politicians become good leaders through competent management, sound decision making, and quite a bit of slogging back and forth in order to persuade people to work together...the ideas they sold during the election are often left behind or reworked once they enter office.

Sit inside a coffee shop and you can hear any number of brilliant ideas. But unless those ideas are turned into something real, the ideas are worth less than the coffee.

The best ideas don't win. Good ideas that are used for actions, products and new behaviors can win...sometimes.

Think about the most successful companies, the most successful leaders, the most successful countries. Did they have the best ideas? Or did they have good ideas that they translated into good products, services, markets, companies, laws, governments, and treaties. If you look close enough, you can find any number of really bad ideas that those successful entities have used to succeed despite themselves.

So why do we think that ideas are so valuable? Why do otherwise rational people believe that the best ideas will save their company, their country, their family?

Perhaps it's because ideas, brainstorming, planning are much more fun than the reality of innovation. The reality of innovation is much like the reality of scientific discovery - as exciting as it is to imagine how something works, that imagining is only part of the process.

In very broad terms, the process known as "the scientific method" can be broken down into the following steps: Observation, Hypothesis, Testing/Experiment and Evaluation. Innovation follows the same process:

First, in order to innovate, it is necessary to Observe reality as closely as you can to discover what is currently happening.

Second, the innovator gets to have fun with ideas - (s)he forms a Hypothesisof what might work better.

Third, that hypothesis needs to be tested in an Experiment prototype or pilot, where a small form of reality is compared to the hypothesis.

Fourth, measurements from the experiment are used to Evaluate the original hypothesis - did it do what was expected? Can that hypothesis be changed in order to affect the desired change?

Mysterious? not really. Both scientists and innovators follow a process, evaluate data and find new answers to old problems. Science and innovation isn't magic, it's just a way to find the truth - about physics, about business, about politics or about how we live - and then act on that truth in a better way than before. As the Harvard business professor and author Theodore Levittonce said, “Creativity is thinking up new things. Innovation is doing new things.”

Easy to understand, but quite often hard to do…and yet, innovation can become a little easier when faith in "the great idea" is put aside - and "good enough" ideas are put to the test of a scientific or innovative method.

October 19th Innovation Roundtable

How are we going to innovate when everyone’s hiding under their desks?

Markets are tight and unforgiving. Budgets are almost non-existent and customers scarce.

Trying something new isn’t exactly the easiest thing to pull off right now. And there are so many reasons not to innovate. But in a market where everything has changed – where capital is difficult to obtain, energy uncertain, and customers reluctant to buy. Companies that do not innovate will not thrive.

So what do we do now?

The second of a series of Business-to-Business roundtable summits on October 19th will focus on implementing innovation – how to effect change in individuals, in processes and in organizations.

Go to the Roundtable Overview to learn more.

Experience: Friend of Foe to Innovation?

At the heart of innovation lies a difficult paradox. The greatest obstacle to innovation is experience. At the same time, experience is essential to make innovation happen.

When someone has experienced a process, a market and product – and understands what works, what doesn’t, what is reasonable and what is impossible, it is rational to view any new approach with a great deal of skepticism. If something worked before, it is only logical that it will work in the future. And it is reasonable to then avoid or even dismiss innovation. A lot of crazy and wasteful ideas are avoided when experienced people are in charge.

And yet… before recent times, it was foolish to believe that people could fly. If someone managed to fly, it would never be economically viable. Given such a tangible reality, the more reasonable course of action would be to ignore any new developments in aviation and concentrate on building faster trains or ships.

Going to the moon, of course, was ridiculous and obscenely expensive to consider, and satellite-based navigational systems were the stuff of dreams, not serious business plans.

At one time, offering free education to all children was seen as an unnecessary expense with little meaningful return and perhaps even a corruption of working class values.

Segregation was an accepted practice in the U.S., and only the most radical would consider that an African-American would ever be able to eat a sandwich at the same lunch counter as a Caucasian, much less become president.

Of course, for every innovation like flight, or desegregation, there are any number of ideas, good and bad, that never become meaningful innovations, usually because experienced people are certain that they are impossible, impractical, or even irrelevant. Experience can stop innovation with the most solid arguments:

• It hasn’t worked before, it’s not worth trying it again.
• We’ve always done it this way before, why risk making things difficult?
• Why change, technology doesn’t fundamentally change things, it just improves or complicates them, why not just add on to what we already have?
• Let’s not cannibalize what we already have – our customers don’t really want that much change.
• People will never really change, why even try?

And for a while, the experts can be right. Quite often the same practice can and should be repeated while new ones ignored or put off. After all, most companies only start to make money after they’ve repeated a process or sold a product many times. If everything were always changing, modern capitalism could not create anywhere near the wealth it does today.

But nothing lasts forever. Change always happens – eventually. The short-sighted arrogance created by experience can trick people into believing that change can’t happen. The challenge is to perceive opportunities for improvement, imagine a different world, understand that no one has all the answers, then make something happen – even when most experienced peopleknow that it’s impossible. A couple of currently evolving examples include:

• Electric cars? The are too expensive, too strange and GM found it to be impossible to make a practical electric car that could be sold for less than $50,000….
  and yet at least 5 models of electric cars are expected to be broadly marketed in the next two years while a $23,000 electric gas hybrid, thePrius was in the top ten list of cars sold in July of 2009 in the US.
• Solar Power? Too expensive and impractical….and yet the market for solar power grew by about 40% a year between 2000 and 2005, reaching about $11 billion. (source: the Economist)
• Web based social networking? Just a kids’ toy – no one will use such things for serious business…and yet 95% of companies use LinkedIn as a primary tool for find employees (source: Jobvite Social Recruitment Survey ), and the fastest growing segment of Facebook users is women between the ages of 55 and 65. (source: Inside Facebook Blog)

In each case, the experienced view that these innovations can’t work is being revealed as invalid. Does that mean, then, that only non-experienced people can innovate?

Actually, experience is essential for innovation – but the arrogance that can come from experience is not. Beginners can be very good at understanding how something might be innovated – but without a deep appreciation for how things work, it is very difficult for them to actually implement something useful. Innovators aren’t beginners but they behave as if they are. Usually, they have or acquire in-depth experience – and at the same time always look at their products, their organizations and their customers as if for the first time.

They have what is called Shoshin in Zen Buddhism, or “Beginner’s Mind”. This state of consciousness occurs once a certain level of mastery has been achieved, when it is possible to be open to possibilities without preconceptions, to be humble, and to see things as they truly are – not as we assume or want them to be.

Beginner’s Mind is experience without arrogance.

So how does someone with experience acquire a “Beginner’s Mind”? There are any number of ways to get there. Consultants and advisors can help give teams a new perspective. Studying other industries where one does not have experience can help bring new perspective. Talking to customers, partners and suppliers and trying to understand how they perceive the process is also a popular method for getting beyond the biases of experience.

Sometimes, Beginner’s Mind can emerge from crabbiness. As my colleague Buckley Brinkman recently put it, “In order to change things, I have to be irritated – not miserable, not in a good mood – but almost cranky.” If one is too unhappy, one is resigned to the way things are. If one is too happy, there’s no reason to change. If someone is tetchy enough, they can see things for what they truly are, recognize the imperative for change, then do something about it.

Innovators are experienced people who are able to defy the arrogance of experience. They may be irritated, but they are certainly willing to change something when it makes sense. To innovate is to see things for the first time.

One Year Blog Anniversary!

Thank you, everyone who has followed this blog. After one year of writing posts, hearing comments from subscribers, and continuing to hone ideas around innovation and marketing, I continue to be excited about working in the "blogosphere". After learning so much about blogs and blogging in the last year, I finally feel ready to be a beginner blogger.

Although I plan to continue posting blogs at this address, I encourage all my subscribers to change their subscriptions to my new and improved web site/blog address: www.bransonpowers.com. If you go to that site and subscribe, I will manually remove you from this list so you only receive one e-mail per posting.

Why switch? The new site, which was created in WordPress, allows for a design that is easier on the eyes, and much more pleasant to follow. It should also be easier for readers to comment on what they read.

If you like what you see, please also feel free to tell your friends, colleagues and family members to sign up. I look forward to everyone's comments and feedback.

Gunnar

Jump the Groove with Beginner's Mind

Innovation is both simpler and more difficult than most realize. It’s difficult, as it involves risk, change and the unknown. It’s simple, as innovation is as natural to people as breathing. It’s what human beings have done since the beginning of time. But quite often we forget how to do it, so we rely on innovation processes.

Innovation doesn’t have to be a 2-step, 6-step or 10-step process. It doesn’t require specialized techniques, experts, off-sites, focus groups, task forces, laboratories or even “skunk works”. All these things are useful, but the process is not innovation – it’s just process. A mad genius, an expert or a task force can innovate, but so can regular people in their everyday work.

Quite often, innovation is seen primarily as an expensive, risky and time consuming activity that only big government or big business has the resources or patience to undertake. Entrepreneurs, with their addiction to risk are also known for innovating – but only by working out of a garage, mortgaging their house, running up their credit cards and more often than not – failing. Only crazy people and well funded companies innovate.

Special innovation processes are popular. Even though they can be expensive and time consuming, they help people feel a little less risky and a little more reasonable. The process helps everyone feel more “normal”.

Of course, process, techniques, teams, tools and special work spaces do help. A skunk works is a very comfortable environment for innovators to work. Getting away from the office with a good facilitator can help stimulate new thinking. Working through a formula or process can give people comfort when facing the unknown. It can also help determine what is likely to work and what won’t before too much money and time is invested.

But it is important to understand that most of these innovation activities are not what makes innovation happen. Innovation is not an activity, a process, a building, or a department…

…it is a way of thinking, a way of seeing, a way of living.

When people are not innovating every day, they tend to behave like a scratched vinyl record. Before explaining this metaphor, it may be helpful to explain vinyl records to anyone who is not familiar with this older technology.

Before compact discs and MP3 recordings became commonplace, most music was distributed by vinyl records played on a rotating turntable. Sound was encoded on the record on a long groove that started on the outside of the record and spiraled into the center. The groove itself had bumps and valleys inside it that could be read by a small pointed needle or stylus that tracked through the groove and transmitted the sound ultimately to the speakers. The needle was attached to a flexible tone arm that allowed the needle to be dragged through the grooves at an even speed.

When the vinyl records scratched or accumulated dust in the grooves, there was a tendency for the needle to get “stuck”. The music would play normally up to a certain point in the song, then, unable to continue, the needle would be pushed back to a previous point in the song. The song would continue until it hit the obstruction again and started over once more.

If nothing was done to fix the problem, records would continue to play the same few moments of a song over and over again.

There were a couple of ways to solve the problem. Listeners could hope that eventually the needle would push the obstruction out of the way and the song would continue playing on its own. Occasionally that would work, but it would often take a long time to get there. More effective were a variety of strategies to jump the groove; to get past the obstruction by hopping over it to the next section of the song. Those strategies included lifting the needle off the record and moving it past the obstruction, hitting the side of the record player so the needle would “jump” to the next groove or even stomping on the floor so the vibration would jump the needle for you.

In order to innovate a process or product, it’s important to find a way to jump the groove as well. Just as the record player gets stuck doing the same thing over and over with the same disappointing result, companies and organizations often get stuck as well. Perhaps a product no longer sells as well as it used to no matter how hard the sales force works. Perhaps a financial system is no longer providing safe leverage to businesses. Perhaps energy sources aren’t as reliable or as safe as they once were. In every case, the immediate instinct is to try doing the same thing until eventually the needle becomes unstuck by itself. Alternatives are usually seen as too difficult, too risky or perhaps even impossible.

The job of an innovation process is to jump the groove. Just like the record player, once an organization is able to see the problem from a different context, once they are able to jar their sensibility in such a way that they can see alternatives, then innovation is not only possible, it becomes a more rational, safe, even accepted activity. The best processes focus on pushing people out of their current thinking and into a place where they can start over again with a “beginner’s mind”.

As it was eloquently put by Shunryu Suzuki-Roshi, ”In the beginner’s mind there are many possibilities, but in the expert’s there are few.”

But jumping the groove doesn’t have to wait for a special brainstorming session, a project, or for the skunk works. It can be as simple as looking at an old problem for the first time. Instead of assuming that the needle must progress on a straight path through the groove, maybe there is a way to jump out of the problem. Just as Toyota’s Kaizen or Continuous Improvement empowers individual employees on the assembly line to find ways to eliminate waste, improve a process, or even stop the assembly line if something isn’t working, if everyone is encouraged to look at their work for the first time, every time – innovation becomes as natural as breathing.

At least, that’s how habitual innovators do it. I doubt that Thomas Edison, Richard Branson, Steve Jobs, Albert Einstein, Thomas Jefferson, and many other innovators ever had trouble jumping the groove in their minds. To them, every problem, every process, every business was a new one. When they looked at something, they looked for the first time, no matter how much experience, knowledge or success they had in the past. That’s how they are able to re-imagine and rebuild answers to questions of products, technology, physics, government. They jump the groove, not by doing what was done before, but by looking at the problem for the first time.

Surprisingly, solutions that are found through everyday innovation are quite often far less expensive and far less time consuming than the alternatives. There are very important innovations that take a significant amount of capital, planning, time and process, but so many opportunities abound for everyday innovation as well. It may be time to encourage everyone to look at their problems for the first time once more.

Beware the Cover Art

Change is really hard.

Whenever one considers changing a system, even if it's to innovate and improve that system, there are always a number of good reasons to avoid the change altogether and keep things as they are. Is it worth the effort, the risk and the cost to change something that works now? Will the old way be missed? Will something valuable be lost if there is change? These are all legitimate and often used questions that can and occasionally should stop innovation.

My favorite reason - often persistent, often misunderstood and always ultimately wrong - is the cover art.

In the 1940's and 1950's record companies began to illustrate the covers of records to help sell their products, differentiate performers, and catalogue collections. In the 1960's, 1970's and 1980's, record companies increasingly referred to the cover illustration as "art". In many cases, the cover art seemed to transcend the record album itself. Anyone listening to music in those decades remembers certain album covers in detail and with fond reverence - in many cases, part of the experience of listening to music was related to the imagery on the cover.

A stand out example would be The Beatles' Sergeant Pepper’s Lonely Hearts Club Band, designed byRobert Fraser, Peter Blake and Jann Haworth with a complex and expensive collage of celebrities past and present (the cover cost 100 times as much as the average cover of the time).

The Cover Art became so important to performers and their record labels that some designers and visual artists became known predominantly for their Cover Art, such as the design team Hipgnosis (Pink Floyd's The Dark Side of the Moon) and Roger Dean's work for Yes and Asia. It almost seemed as if cover art had become a separate form of art, collected and in many cases even framed by enthusiastic music fans.

Despite it's value as a branding device and marketing tool, the art on the cover of the record was ultimately of secondary importance. People bought records so that they could easily listen to the music inside – not because of the wrapper. The cover art may have helped encourage them to buy, but it was never the primary reason they did so.

When Compact Discs supplanted vinyl LP's in the mid 1980's, many skeptics of the new format pointed out that a smaller disc size did not allow for the same quality of cover art. In addition to concerns about replacing an existing library and a loss of some sound characteristics of vinyl recordings, music buyers wouldn't accept the format in some part because they wouldn't be able to enjoy the art they loved.

And yet, by the mid-nineties, vinyl records had become a niche product revered mostly by nostalgic collectors, but not a serious part of the music industry. In the beginning of the 21st century, when MP3 players such as the iPod came along with digital music downloads and almost no room for Cover Art, it only took a couple of years for mainstream consumers to throw away their love of cover art and buy songs without it. It turns out that none of the reasons for staying the same, including the cover art, are compelling enough to stop change.

The record companies were selling the vinyl records wrapped in cover art. The "art" was a powerful tool from marketing but at the end of the day, their customers were buying music - not records or art. The instant someone offered them a significantly better delivery device for the music, they would switch.

How important was Cover Art to the buyers? They liked it. They put it on their walls, they collected it. But they didn’t really ask for it; they never bought it.

Cover Art occurs in almost every mature system, whether it’s the record industry, a government, a car company or a bank, "Cover Art" can be identified by the following factors:

• It is something offered that is incidental or even immaterial to the problem a customer is try to solve. In the case of records, the customer was trying to fulfill their desire to hear music – not look at art.
• It is mostly decorative – a way to make something more palatable, more slick, more exciting – but it does not significantly contribute to the problem a buyer wants to solve.
• It is mostly used to differentiate, sell or brand a commodity product. (Branding and advertising can be very important for selling something, but when presented with an alternative to a sales pitch, buyers almost always go with that alternative, even if it costs them more money. As an example, consider television advertising. Most people enjoy well produced commercials, and yet will pay extra to skip commercials through DVR’s and premium cable channels.)
• It is expensive, time consuming and requires specialized skills to produce/deliver.
• The customer will not pay extra for it and won’t go out of their way to get it independently of the primary offering.

Cover Art occurs in all sorts of companies. For example, up until the 1990’s airlines tried to differentiate themselves based on the quality of their hot meals served during flights. Serving a hot meal on a moving airplane is a very difficult and expensive thing to do – even when the food is less than good. Initially, in-flight meal service helped airline passengers feal safe and pampered during flights - as if flying was just like taking the train. But as air travel became a common part of life, that assurance became unnecesary. The meal is incidental to the main need of a passenger – to safely and quickly get to their destination. When someone offered a more attractive alternative without meals, they were willing to switch.

While most airlines continued to spend money on their hot food programs, Southwest Airlines offered peanuts for food and a less expensive ticket price. Despite their lack of “Cover Art” hot meals, today they are the most profitable airline in the history of aviation.

Computer software and hardware makers have recently been surprised by the market’s embrace of small, less powerful computers that rely on Internet based applications and data storage. They have long thought that their customers wouldn’t give up the Cover Art of abundant features, massive hard drives and large numbers of applications. But customers don’t buy massive hard drives – they buy a way to send e-mails, type up a letter, handle their bank account and surf the Internet. As soon as someone offers them a way to avoid buying a massive hard drive, they embrace it.

Where else is there cover art? Credit card companies have been offering elite gold, platinum, and black plastic cards for years. Although people love the status of the different colors, it is incidental to what they are buying – a cash flow management system. That status is very important, and it has been a very successful marketing strategy for the commoditized offering of credit. However, if someone offers a better cash flow management device that does not include the status Cover Art, will the platinum card be as endangered as an LP or in-flight meal? Are there other places that platinum card users will look for their status symbols in the future?

There are numerous examples of Cover Art throughout industries and organizations. Valuable to any company contemplating change, an assessment of the potential Cover Art can reveal significant opportunities for innovation. Customers don't buy marketing (cover art) or delivery devices (records), they buy a solution to something (music). Even though marketing and delivery devices are essential for a successful business to sell to their constituents, they should never be confused with products and can always be trumped by a better solution.

And therefore, robust and mature Cover Art is a leading indicator that innovation and change is possible and even likely. Does your company offer the best Cover Art in your industry? Are your customers open to better delivery options?

Is it time you innovated?

Want innovation? Start laughing.

Laughter seems to be closely linked to innovation. When teams are solving problems, when individuals are able to overcome their fears and create solutions – more often than not, they are laughing. Breakthroughs and laughter often seem to go hand-in-hand. And when no one is laughing - innovation seems to slow down as well.

When Brian Marshall of the Alliance for Strategic Alliance ran a technology company in the '90's, his engineers, “worked 12, 16, 18 hours a day, sleeping in their offices…and they were high-fiving each other, telling jokes, having a good time. We just gave them a deadline, near impossible objectives, some t-shirts, beer on Friday nights and an unlimited amount of free soda pop – and they were in heaven.”

And they delivered innovation. Without the laughter, very little risk taking, developing, or building takes place. According to Patrick Lamb, Founding Member of Valorem Law Group, “you know when people are in survival mode when they aren’t laughing.”

David Johnson, CIO of Jones Lang LaSalle sees tangible risk to this loss of fun in his development teams, “It is hard to hold on to your best people when they’ve been so demoralized by cost cutting, project cancellations, and an ever increasing load of administrative work. As the markets improve, they will be tempted by new jobs in new companies that let them innovate. For this type of employee, change is a good thing.”

But maintaining a sense of humor may be a good place to start mitigating that risk. According to Buckley Brinkman, innovation consultant of Launchpad Partners, “the fun thing is trying to figure out how to get people engaged even when things are tough. The ship is burning; we’re five miles from shore, its taking on water, but stay anyway.”

Fun and laughter can be managed, and even encouraged. According to Patrick Lamb, “The people who run things need to be out there walking, talking and joking. Take a fair amount of time doing stuff that gets people comfortable. If you make it easier for people to laugh, they will laugh.” If they are laughing, they can start to solve problems.

According to Kevin Conlon, president of Conlon Public Strategies, “the intangibles of values and culture with our team and our clients make a big difference when times are difficult. We’ve even had to say no to client opportunities that didn’t fit – but staying true to our shared values and chemistry helps us weather the difficult times.”

John Ahlber, president of technology consulting firm, Waident, always tries to figure out if a candidate enjoyed his colleagues’ sense of humor, by getting people together over a meal and allowing everyone to joke around a bit in the presence of the candidate. If the prospect laughed or even joined in with their goofiness, it was a leading indicator that there may be a strong cultural fit. Laughter, for Waident is almost a requirement for collaboration.

Shared values, fun and laughter can help promote more innovative teams, but it can also indicate when people are starting to work on the problem instead of being paralyzed by it. As we begin the second half of 2009, more and more business leaders seem to be joking about how difficult business is – instead of just complaining about it or worse yet, denying that there might be a problem. This may suggest that the economy will be able to improve in the second half of 2009.

Are you laughing yet? Maybe it's time to start.

(This blog post is the final of three excerpts from a Branson Powers, Inc. B2B Executive Innovation Roundtable that was held on June 19th, 2009. If you are interested in reading the full report, you can view the pdf file. If you are interested in participating in future roundtables, please contact Gunnar at gbranson@bransonpowers.com.)