I was supposed to fly to Baltimore this morning to do in-home research throughout the week. With the impending “perfect storm of the century” bearing down on the East Coast, that has obviously been cancelled. I’ve been watching this storm approach since late last week trying to figure out if/how it would affect my business plans. By mid-day yesterday (Sunday) I cancelled the trip. The funny thing is, I got an email from the recruiting firm in Baltimore (that we use to help us line up consumers for the research) late afternoon stating that “we are fully planning to conduct business as usual both within our office and outside of our office”. It went on to say that if we did encounter any issues (like a delayed flight in) to please advise them, and they would help us navigate through any complications.
Unexpected delays? Really??? It turns out my flights had already been cancelled (24 hours in advance – I’ve never had that happen before). The Eastern Seaboard has shut down almost all public transportation. Baltimore alone had 7 Severe Weather Warnings as of this morning, predicting massive power outages, severe flooding, devastating winds, etc. But it’s good to know that my contact there was welcoming us in and letting us know they’d help us if we ran into any inconveniences.
Optimism is one thing. But burying your head in the sand is quite another. I’ve never personally met the guy that sent me the email, I’m sure he’s a great person. But how can anyone be so oblivious? Yet having said that… I see this in business all the time. People are warned about incoming storms, they see it on the horizon, but they remain convinced that it won’t impact them Be it economic, or personnel related most corporate crises were obvious in coming, when looking backward.
Running a business is really not that much different than planning for a storm. We need to be constantly watching the horizon, listening to the news and being aware of our surroundings. When we hear of an impending storm, we need not panic, but we should put contingency plans into place. We need to set aside ample reserves in the good times to get us through rough stretches. And we need to invest in the future to make us more resilient for future storms.
I pray that our contacts in Baltimore all weather this storm safely. But my guess is it won’t be business as usual, and they’ll probably have to deal with some unexpected delays. As for me and my business, I’m going to take this as a good reminder and lesson.
My company, Insight2, was a major sponsor of the first annual Day of Innovation (#dayofinnovation). The event was put on by Centric, a local Indy-based innovation organization. It was an incredible day featuring keynote speakers, breakout sessions, experiential activities and networking. Capping off the evening was the second annual Indiana Innovation Awards which recognized nine companies from around the state for their successful and unique new product offerings.
The beauty of this event was in its diversity. There are several other innovation groups around Indianapolis, but they are all very focused on their segment (e.g. tech-sector, medical products, start-ups, non-profit). This was the first event that really reached out to all segments and provided value from a variety of sources. One panel discussion alone included a consumer products company, an alternative energy solution and a B2B branding company. The topic was Effective Innovation. It was fantastic to see both the similarities and the differences between these three groups in terms of what is effective and what drives effectiveness.
Each of us should continually expose ourselves to ideas and philosophies that fall outside of our normal circles. We learned about a non-profit that went from losing money to triple-digit growth based upon ethnographic research. We heard about the value of conflict in the innovation process and we heard 9 key steps to successful innovation form our keynote speaker Deborah C. Stephens. No typical conference would have each of these types of speakers or presenters. This was truly a great day. And I for one, and extremely proud to have been a part of it.
Today I have a true Shower Musing… My shower at home has two shower heads on opposing walls. While this will upset water conservationists, I admit to loving to use both at the same time. It’s a wonderful feeling to have so much water coming from two directions and totally envelope me. It’s impossible to tell where one starts and the other stops, and I love that.
This morning after my run I jumped in the shower (typically a cool shower to help me cool down). But one shower was turned on hot and the other turned on cold. My first reaction was to adjust them to be the same temperature, but then I decided not to. I adjusted the angle of the heads so that the hot shower was running on my legs (relaxing my tired muscles) and the cold shower was running on my head and shoulders (helping me to stop sweating). It was a very different feeling from my typical experience. The showers didn’t blend together at all. I was continually aware of each and the unique value that it provided. It was if each stream of water was fighting with the other to get my attention.
The analogy that came to my mind was the teams that we surround ourselves with at work. Our natural inclination is to hire a bunch of like-minded (warm water) people that fit our existing culture. Just like the shower, it is often hard to see where one individual’s contribution starts and another person’s ends. That is wonderful if quick unity is the primary goal. But effective innovation is born from conflict and difference. It is at the intersection of where the hot and cold water meet.
How diverse is your team? Do you have different temperatures coming together in one setting? Are you aware of the strengths and opinions that each person brings or have you settled for a comfortable environment where every situation and conversation feels the same? If you want to be an innovative company, surround yourself with diversity, and value the unique opinions and perspectives that surface. Avoid the temptation to achieve homogenization and the “simplicity” that brings. Just like the shower, it will feel strange at first, but you can come to appreciate the value that each player brings.
Here we go again. I spoke with a friend yesterday whose job was just eliminated. ”We’re taking the company in a new direction” he was told. My friend has spent the past several years focused on developing innovative new offerings, building brands and separating his company’s products from the competition. Like most non high-tech companies, his was constantly under threat of commoditization and he spent his time in battle against that. But… as what happens with so many mid-sized companies these days his company was sold from one equity firm to another. The latest firm ran the numbers and decided that it would be more profitable to reduce their product offerings and focus on lowering their pricing. On paper, this looks really good. How often does it pan out in reality?
I’ve seen this same scenario play out in multiple companies. ”If we just take our manufacturing off-shore, then we’ll have a tremendous price advantage…” ”Let’s outsource our design to the Chinese manufacturer, that will further lower our cost…” Fast forward eighteen months, and the big-box retailers that they were working so hard to please suddenly realize that the company no longer adds any value to the equation. So, they decide to source directly from the overseas manufacturer to avoid the US mark-up and the original company finds itself without manufacturing, without engineering, without distribution and ultimately without a need to exist at all.
It’s not just a recent thing. Back in my Whirlpool days, I helped create a very innovative product road map for one of their business units. Internal management was quite excited about the possibility of how this product could change the market and bring unforeseen benefits to their customers. About that time a large consulting group out of Boston was brought in. They looked at the same business unit and suggested that Whirlpool invest no money in it, and should follow a cost-reduction strategy to become profitable. You guessed it… within two years, the product became a complete commodity and sold off at a fraction of its former worth.
You can’t cost reduce your business to profitability. You just can’t. Whatever numbers you calculate that show you will have an advantage will quickly be copied by your competition forcing you into further, deeper cuts. It’s a death spiral from which there is no recovery. Innovation is not a buzz word, it is a critical business strategy. Companies need to focus on adding value to their offerings, not cost reducing them. Separate from the pack, don’t try to dive beneath it. At what point will the number junkies look up from their spreadsheets and see what is really going on in the world?
True innovation is hard work and takes time. It needs to be a part of a strategic plan, developed and launched in a deliberate manner. There’s nothing new in that, and few would disagree. But let’s look at some corporate reality. There are two key factors that can essentially kill effective innovation; corporate culture and employee reality.
First let’s look at the corporate culture. Private and publicly held companies are both under extreme pressure to deliver financial returns for the short run. It’s hard to convince shareholders (or banks, or holding companies) to wait two years for something great to occur. Expectations are set on a quarterly basis. With such intense pressure to deliver in the short term, it’s much easier pursue incremental change than to embark on a longer term innovation strategy. Companies will begin innovation efforts with the big picture in mind, but often succumb to the pressure and pursue only those ideas that can be knocked out quickly.
From an individual employee standpoint, the pressure is very similar. Who in corporate America expects to be in their current job two years from now? Even if an individual doesn’t change jobs, the reality is the organization will most likely change around them shifting all priorities and efforts accordingly. What motivates a person to embark on an effort that lasts a long time? The person that delivers a project seems to get the credit, not the one that does the hard work on the front end. Over the course of a typical, strategic innovation project it’s not uncommon to see multiple people at the helm, each adding their own opinion and wanting to put their mark on the effort in case it happens to be successful.
It’s not lack of interest, its lack of vision beyond the immediate future. Companies spend considerable time and effort creating one, three and five year plans. But the initiatives that get pursued are those that can be delivered quickly to show an immediate impact on the bottom line. Can anything be done to shift this mindset? Or are we doomed to a culture of incrementalism?
I’m reading a great book called “Snap Selling” by Jill Konrath. It is an intriguing sales strategy book that provides tactics on “getting through” to busy executives. One of the points she makes (that I certainly find true in selling my business) is that harried professionals prefer to stay in their comfort zones whenever possible. They may appreciate what you have to sell, but if it complicates their lives in the near term, the odds are you will be put off until “later”.
Wow. How true is this in the world of innovation? While an executive may be able to imagine the benefits that could be had by pursuing an innovation strategy, doing so will cause them a significant amount of stress and turmoil. Even when led by a competent, external professional there are individuals to coordinate, other duties to re-prioritize and other personal objectives that still have to be accomplished. Innovation becomes just another item on an already crowded plate. Human nature dictates that we simplify today even at the expense of tomorrow.
What causes some companies to consistently innovate new products and services?
- They overcome the inertia of inactivity and force themselves to move forward (even in chaotic, challenging times)
- They are hyper-aware of the true cost of doing nothing (in terms of lost market share and eroding margins)
- They establish a corporate culture where comfort zones are discouraged, and risk-taking is rewarded
- They look past this quarters financial returns and focus on a 1-3 year strategy
- They prioritize innovation in their schedules and eliminate less strategic initiatives instead
These things don’t just happen. They are the result of an innovation-driven vision. But let’s be honest. That’s not for most companies, or for most individuals. It really is just easier not to innovate at all.
I have a good friend (Eduardo) from Brazil that shares my love of innovation. We were talking the other day about our collective experiences with different companies. One common theme that we both came across was the high level of disappointment many firms have in regards to their innovation output. These companies express a need for innovation, and have multiple projects running at any given time, but looking back it never seems that their target revenues were achieved. It doesn’t take an organizational design specialist to understand their key issue. Anyone looking objectively at the organization can spot the problem.
Thanks to Eduardo for illustrating this point so beautifully in the following cartoon!
Does this look familiar? How are you really allocating your resources? Are your “innovation people” protected from day to day firefighting? Do you have a group is charged with seeing beyond the financial returns of the given quarter? Innovation never just happens, and it is not painless. It seems that most companies get what they organize for.
When we think of innovation, it typically brings a given personality to our minds. Steve Jobs, as an example was an iconic innovator that brought many great products to life. But a recent study by Forbes, show in fact that there are five different personality types required for successful innovation. Their examples lead me to think of the work I used to do in forming high-performance work teams. It is crucial to have diverse personalities involved to ensure that all perspectives are covered and the goals are met. With innovation, there’s no difference. For every dreamer, you need a realist. For every big-picture visionary, you need a number-cruncher. No one personality working in isolation, can bring successful innovation to the market. I encourage you to read their article on this study “The Five Personalities of Innovators: Which One are You?”. Is your organization well staffed to cover each of these areas? If not, is this something you need to adjust in order to improve your percentage of successful launches? I think this is well worth considering.
I live near Indianapolis, and all the news today is about the release of Peyton Manning from the Colts. Twitter and Facebook posts are filled with opinions and consolations. Most people saw this coming, but to look at the social media pages, you’d think this was a shock to everyone.
In glancing through the posts, I’ve noticed something unexpected, yet very interesting. People seem to be falling into one of two distinct camps on this topic. There are those that think Colt’s owner Jim Irsay is an idiot, and those that think that letting Peyton go (while saddening) was inevitable. As I started to look at who was writing what (and knowing the backstory of many of those people) I started to see a correlation between their own lives and what they were writing.
One of the most notable “Irsay is an idiot” contributors was until recently one of the largest home builders in the city. His comment was “Why would you ever let a proven winner go…?”. Interestingly enough, this man’s company has gone into bankruptcy in the last year and is no longer around. He himself had a “proven winner” in the form of a business model in this city… until the recession hit. Even in the midst of the recession, he was passionately pursuing the largest development of his career. Unfortunately, the world changed around him (in this case the economy). What had always worked so well for him in the past was unable to sustain him in the present. The sad result is that a good man and a good company went under. Many of the other posters would fall into a similar (though less extreme) scenario. ”You don’t let go of a winning approach”. ”You don’t fix what’s not broken”. You see it in their posts and you see it in their lives.
The other camp also fondly remembered and honored the past. But they recognize that the situation has changed and it is time to move forward. The Colts are not the Super Bowl team of a few years ago, they are admittedly in a rebuilding scenario. Therefore, it doesn’t make sense to spend all of the team’s salary cap on bringing back a single player that will be rendered ineffective because of the lack of talent surrounding him. Some of the people in this camp have proven to be highly resilient – even successful in spite of life’s circumstances.
In my mind, this is a perfect analogy that reflects many of the companies in our country today. Highly innovative companies are continually rei
nventing themselves and pursuing their goals in bold new ways. Ultra-conservative companies continue to hold onto tradition, and attempt to cost-reduce their way to success. This worked in the 1990′s. But it doesn’t work in 2012. Yes we should honor the past. We should take time to celebrate those that helped us in our past successes. But we cannot afford to stay there as the world changes around us. Innovation is the key to survival. That’s true for the Colts, and that’s true for our businesses.
It’s commonly believed that the most innovative companies are those that have the best original ideas. I don’t believe that. If there was some way to formally test this, I would. I imagine it would look something like this. Choose ten well-established companies and give each of them an idea that would change their industry. Put no strings on this idea, no obligations no risk of lawsuit (okay we’re suspending believability at this point, but stay with me). Literally give each of them the holy grail of new ideas. What do you think would happen?
My guess is this:
- Four of the companies would table the idea, labeling it as a long-term objective that they could pursue once their near term (hopelessly incremental) ideas have been implemented. The idea would never surface again
- Three of the companies would indefinitely bat the idea around because they can’t decide which department should champion the idea
- Two would reject the idea outright because they would not have the current distribution network to get the product to market
- The final company would pursue the idea, but abandon it once they hit the first internal obstacle during the development process
Hmmm, have I really become so jaded as to think that no company can bring an innovative new company to market? No. But I do believe that less than 10% of corporations would really give the idea it’s due. It’s not the competition that’s making life tough, it’s the inability to move forward in a bold way, even when a game-changing opportunity presents itself. Take a close, honest look at your organization. Could you bring this idea to market? What barriers exist that would cause you to overlook the opportunity? Who is the idea killer on your staff?
Before you begin your next innovation project, I’d suggest asking yourself these questions and addressing them in a proactive manner. It will increase the return on your innovation investment exponentially!