Thursday, May 31, 2012

An Innovation Lesson from a Chinese Bamboo Tree

I came across an interesting blog post by Emma Tiebens in which she shares a story told to her by a friend about the patience, diligence, and perseverance required in planting and caring for a Chinese bamboo tree.  To plant a Chinese Bamboo tree, you prepare the soil, pick the right spot, then plant the seed. You water it and wait… and wait… and wait… You continue to water it for an entire year and nothing appears. No bud, no sprout, nothing. Amazingly, this will continue for the next four years! Finally, in year five, one day you see a tiny green stub sticking out of the dirt. From that day on progress is fairly rapid and within six weeks the bamboo tree is over 80 feet tall!

Really? Did it really grow 80 feet in 6 weeks?

No… it grew 80 feet in five years!

The Bottom Line - Innovators should take inspiration from the above as they nurture their own "Chinese bamboo idea seeds." Remember Principle #2 from my book, Living in the Innovation Age, that "Innovation is a Journey not a Destination." Be patient as success might be just around the corner!

Wednesday, May 30, 2012

Who in Your Company Can Say "Yes" to Innovation, Without Permission? - Vijay Govindarajan and Mark Sebell - Harvard Business Review

An interesting blog post from Vijay Govindrajan and Mark Sebell on the disconnect between the people who would like to innovate and the people who can say "yes" to innovation without permission. Innovation has the best chance of success when these two groups of people are aligned, or better yet, one and the same!

Who in Your Company Can Say "Yes" to Innovation, Without Permission? - Vijay Govindarajan and Mark Sebell - Harvard Business Review

Monday, May 21, 2012

Innovation is a Team Sport

In my book, Living in the Innovation Age, one of the ways I discuss to make innovation work in your organization is recognizing that innovation is a team sport. I also discuss why the concept of "skunkworks" often fails to spur the innovation senior leaders had hoped for. As those of you who have been reading my blog posts might already know, I've been reading the "classics" on strategy and innovation in an attempt to better understand where we are today. One such book is Tom Peters and Robert Waterman's In Search of Excellence. They list a “bias for action” as the first of eight attributes that distinguish excellent and innovative companies from their peers. To promote such a bias they further advocate the creation of skunkworks organizations where creativity is embraced and action is encouraged.

But how can this be? Today, as I discuss in my book, we know that most skunkworks projects are doomed to fail even before they get started. So did Peters and Waterman miss the mark? The answer emerged as I delved deeper into the crux of the book. The real problem is not with the concept of a skunkworks as described by Peters and Waterman. Rather, the problem is that most organizations have completely butchered it into something that it was not meant to be. These companies have somehow equated skunkworks with R&D laboratory operations that produce papers and patents by the ton, but rarely new products. These companies are besieged by vast interlocking sets of committees that drive out creativity and block rather than promote action.

So, what did Peters and Waterman imply when they talked about a skunkworks task force? Here are a few guiding principles to help set you on the right path:
  • Skunkworks task forces must be small – usually ten or less. 
  • Skunkworks task forces must be of limited duration; they solve a problem and then disband.
  • Membership should be voluntary. There’s nothing more likely to kill a project than having a task force filled with people who think it’s a waste of their time.
  • The task force should be pulled together quickly, without a formal chartering process. Formal charters are a sure sign of bureaucracy setting in.
  • Follow-up should be swift. If a task force can’t accomplish its goals in a reasonable period of time, it should be disbanded.
  • Task forces should have no assigned staff. Permanent staff is another sign of the beginnings of bureaucratic sclerosis.
  • The focus must be on outcomes rather than output (aka documentation, reports, white papers, etc.) In fact, documentation should be informal, and scant. Fifty-page reports tend to be written with an eye to showing how much energy has been expended; one-page summaries force the group to focus on conclusions and outcomes.

The Bottom Line - A properly designed skunkworks task force is not in contradiction to promoting innovation as a team sport because brings together the right people for a limited duration to time, encourages them to think creatively and outside the box, and promotes collaboration and action over process and bureaucracy.

Thursday, May 10, 2012

Innovation - What's in an Org Chart? More than you might think...

In my recent book, Living in the Innovation Age, I talk about "rethinking workspace design" as one of the ways you can spur innovation in your organization. Most people will agree with what Franklin Becker once said about organizations and employees performing either better or worse because of the way their workspaces are planned, designed, and managed. Scott Adams has made a fortune by mocking bland, dreary, and bureaucratic workplaces in his Dilbert cartoons. It might actually be funnier if it weren't so true! As I explain in my book, one reason innovative companies succeed is because they realize the disconnect between how traditional organizations are designed and what is really required for innovation to occur. They realize that enabling collaborative workspaces internally, on campus grounds, and virtually can unlock areas for workers to be inspired, socially energized, and refreshed. Organizations such as P&G, Google, and Mattel have boldly redesigned their workspace to reflect their innovative culture. They realize that their workplace design is not only a means of demonstrating this culture, but also a way to breed and strengthen the execution and delivery of innovative ideas and their implementation.

But workspace design is only half of the equation with organization design being the other half. As Chris Trimble explains in his recent blog entry on HBR, To Innovate, Turn Your Pecking Order Upside Down, executing breakthrough innovation requires breakthrough organizational design. One example of this is rethinking hierarchy. As Trimble explains, when Electrolux, the European appliance maker, decided that it needed to push its product line up market, it created a special team in which market researchers and industrial designers were at the top of the pecking order instead of engineers. This decision was specifically made to overcome the company's inertial tendency to design high-reliability but dull and mid-priced products.

The Bottom Line - Innovation, by definition, deals with uncertainty. Dealing with certainty requires challenging the status quo, both in workspace design and organizational design. In other words, if you really want breakthrough innovation, you must be willing to break through the barriers to innovation that exist in your organization and workspace!

Tuesday, May 8, 2012

Reverse Innovation - Apple Beware?

I just finished reading Reverse Innovation by Vijay Govindrajan. As expected, the book is a fascinating read with numerous case studies. One point that came through loud and clear was that although the concept of reverse innovation is quite simple, implementing it with success is anything but. The traditional flow of innovations in our economy has been from the developed to the developing nations. Vijay calls this phenomenon "glocalization" in which companies take successful products that they have created for customers in their Western markets and modify them, most often by stripping off many of their features, for distribution all around the world at lower price points. And while glocalization has proved effective in reaching the top segments of the market in developing nations—buyers with needs and resources similar to those in the developed world, it has not proved to be an effective market penetration strategy. The reason - most growth opportunities in emerging markets are not at the top but in the middle market and below, where the gaps between customers’ needs and those of their developed-world counterparts are enormous. Reverse innovation promotes a new, bottom up approach that starts with the recognition that if you want to succeed in emerging markets, you must innovate for them. While success in ripe developing markets might be reason enough to embrace reverse innovation, there is more good news. Because the global economy is richly interconnected, innovations developed for emerging economies can be extended to the developed world. And as Vijay demonstrates with detailed case studies, such "extensions" generally occur in two phases - first in under served, niche areas of the developed markets and then "disruptively" in the mainstream markets.

Now, what was that about Apple?
Today I was reading an HBR blog entry that was talking about some of the problems Apple is facing with its hugely popular and successful iPhones in China. One critical problem is input. To date Apple's U.S.centric R&D efforts have failed to produce a Chinese-friendly input system. This is a serious problem, because texting is an integral part of Chinese life. As a workaround, Chinese iPhone owners jailbreak their phones and install third-party software that drastically simplifies the process. And then there is Siri - the most attractive new feature in the iPhone 4S. Well, Siri does not work in Chinese and even struggles in English if you have a strong Chinese accent.

So, in other words, Chinese users are cobbling together an iPhone experience from a variety of sources, and the overall experience is not very good. All of this is good news for Apple competitors Samsung, HTC, and Microsoft/Nokia. Chinese consumers are hungry for someone to develop an ecosystem that makes smart phones easy to use in their ecosystem/context/environment. Or maybe the winner will be a local player such as ZTE and Huawei. In any case, the winner will more than likely not be a company that develops its hardware, software, and the ecosystem from a U.S. perspective. (Hint - can anyone say reverse innovation?)

The Bottom Line - While Apple is the dominant force in the global smart-phone market today, that dominance could be very short-lived if Apple is not careful. It seems that Apple's leadership would be well advised to read Vijay Govindrajan's latest book on Reverse Innovation.

Saturday, May 5, 2012

On Strategy, Innovation, and their Convergence

In the past month I have been reading books and articles on several different but related topics. First, I have been reading and trying to really understand Michael Porter's views on corporate strategy. Second, as some of you might know based on my recent blog entry, I just finished reading Peter Drucker's classic "Innovation and Entrepreneurship" that he had written way back in 1985. Finally, I have been studying what insightful people such as Walter Isaacson have been trying to teach us about the management and innovation lessons from the legendary late Steve Jobs.

Most of us are familiar with Porter's "five forces" theory on the analysis of industry structure, his seminal work in value chain analysis, and defining competitive advantage. His groundbreaking ideas have unfolded over three decades with some of his latest work being in ways to distinguish good strategy from bad. One of the five tests he advocates for testing the "goodness" of your strategy is taking an honest look at whether your strategy is based on trade-offs that are different from your rivals. Trade-offs are like forks in a road; you have to take one and you can never take both simultaneously. Peter Drucker might have put it as if you take one road, you would "selectively abandon" the other. Ultimately, however, trade-offs will help determine what you will not do, which is the true essence of what most people miss about strategy. Take a look at Microsoft Word. Over the years, Word has become more and more laden with features that most of us will simply never need nor use. It's interface has become more cluttered, more difficult to use, and the program itself is bloated consuming much more memory. It is a perfect example of a program that is trying to become everything for every user. In an attempt to please every user, it is actually pleasing no user. In other words, Microsoft Word has relaxed its trade-offs to offer a product for everyone and in essence has undermined its strategy and consequently its competitive advantage. On the other hand, consider the approach that Steve Jobs took after he returned to Apple in 1997. As Walter Isaacson explains, after weeks of dizzying product review sessions, Jobs had finally had enough. He cancelled all but four products focusing on two desktops and two portables; one each for regular and professional consumers. That's it. In Jobs' own words "deciding what not to do is as important as what to do." Years later, when Google co-founder, Larry Page, visited Jobs, he was given the same advice. Consequently, in January 2012, Page directed Google employees to focus on a limited set of priorities that includes Google+ and Android.

Porter also claims that capital markets and their drive to force companies to focus on a singular measure of shareholder value has been enormously destructive for strategy and value creation. It has led to companies becoming more similar to each other, which forces competition on price rather than uniqueness. Peter Drucker once said that the purpose of business is to create and keep a customer. It would seem that Drucker would agree with Porter that a singular focus on shareholder value is not the most productive way to run a business. Focusing on maximizing shareholder value encourages companies to take short-term actions to boost share prices and market capitalization. Apple's rise, subsequent near death downfall, and its amazing comeback is a case in point. As Walter Isaacson explains, when Jobs and his small team designed the original Mac in the early 1980s their focus was on their product and its positive impact on their target customers rather than on profit maximization or cost trade-offs. In the decade from 1983 to 1993 when John Sculley, a sales and marketing executive, took over Apple, their focus shifted to maximizing shareholder value. This focus proved toxic and Apple nearly collapsed. After Jobs' return, he re-shifted the focus back to creating an enduring company where people are motivated to create great products. By not focusing on shareholder value, Apple under the leadership of Jobs was able to define a clear strategy with differentiated trade-offs, which allowed it to focus on creating the right products for its customers, which in turn led to record profits. The irony of the whole story is that while the focus was never there, Apple is now the most valuable company in the world! That's the power of a good strategy and the lessons learned from the greats such as Porter, Drucker, and the late Jobs.