Moneyball and the Beginning, Middle, and End of Innovation

Moneyball and the Beginning, Middle, and End of Innovation

Last week, pitchers and catchers reported to MLB Spring Training facilities in Florida and Arizona.  For baseball fans, this is the first sign of Spring, an occasion that heralds months of warmth and sunshine, ballparks filled (hopefully) with cheering fans, dinners of beers and brats, and the undying belief that this year will be the year.

Of course, there’s still a lot of dark, dreary cold between now and Opening Day.  Perfect weather for watching baseball movies – Bull Durham, Major League, The Natural, Field of Dreams, and, of course, Moneyball.

Moneyball is based on the book of the same name by Michael Lewis and chronicles the 2002 Oakland Athletics season.  The ’02 Oakland A’s, led by General Manager Billy Beane (played by Brad Pitt), forever changed baseball by adopting an approach that valued rigorous statistical analysis over the collective wisdom of baseball insiders (coaches, scouts, front office personnel) when building a team.  This approach, termed “Moneyball,” enabled the A’s to reach the postseason with a team that cost only $44M in salary, compared to the NY Yankees that spent $125M to achieve the same outcome.

While the whole movie (and book) is a testament to the courage and perseverance required to challenge and change the status quo, time and again I come back to three lines that perfectly sum up the journey of every successful intrapreneur I’ve ever met.

The Beginning

I know you’ve taken it in the teeth out there, but the first guy through the wall…he always gets bloody…always always gets bloody.  This is threatening not just a way of doing business… but in their minds, it’s threatening the game. Really what it’s threatening is their livelihood, their jobs. It’s threatening the way they do things… and every time that happens, whether it’s the government, a way of doing business, whatever, the people who are holding the reins – they have their hands on the switch – they go batshit crazy.”

John Henry, Owner of the Boston Red Sox

Context

The 2002 season is over, and the A’s were eliminated in the first round of the playoffs.  John Henry, an owner of the Boston Red Sox, has invited Bill Beane to Boston to offer him the Red Sox GM job. 

Lesson

This is what you sign up for when you decide to be an Intrapreneur.  The more you challenge the status quo, the more you question how business is done, the more you ask Why and demand an answer, the closer you get to “tak(ing) it in the teeth.”

This is why courage, perseverance, and an unshakeable belief that things can and should be better are absolutely essential for intrapreneurs.  Your job is to run at the wall over and over until you get through it.

People will follow.  The Red Sox did.  They won the World Series in 2003, breaking an 84-year-old curse.

The Middle

“It’s a process, it’s a process, it’s a process”

Bill Beane

Context

Billy has to convince the ballplayers to forget all the habits that made them great and embrace the philosophy of Moneyball.  To stop stealing bases, turning double plays on bunts, and swinging for the fences and to start taking walks, throwing to first for the easy out, and prioritize getting on base over hitting a home run.

The players are confused and frustrated.  Suddenly, everything that they once did right is wrong and what was not valued is deeply prized.

Lesson

Innovation is something new that creates value.  Something new doesn’t just require change, it requires people to stop doing things that work and start doing things that seem strange or even wrong.

Change doesn’t happen overnight.  It’s not a switch to be flipped.  It’s a process to be learned.  It takes time, practice, reminders, and patience.

The End

“When you get an answer you’re looking for, hang up.”

Billy Beane

Context

In this scene, Billy has offered one of his players to multiple teams, searching for the best deal.  When the phone rings with a deal he likes, he and the other General Manager (GM) agree to it, Billy hangs up.  Even though the other GM was in the middle of a sentence.  When Peter Brand, the Assistant GM played by Jonah Hill, points out that Billy had just hung up on the other GM, Billy responds with this nugget of wisdom.

Lesson

It’s advice intrapreneurs should take very much to heart.  I often see Innovation teams walk into management presentations with long presentations, full of data and projections, anxious to share their progress, and hoping for continued funding and support.  When the meeting starts, a senior exec will say something like, “We’re excited by the progress we’re hearing about and what it will take to continue.” 

That’s the cue to “hang up.”

Instead of starting the presentation from the beginning, start with “what it will take to continue.”  You got the answer you’re looking for – they’re excited about the progress you’ve made – don’t spend time giving them the info they already have or, worse, could raise questions and dim their enthusiasm.  Hang up on the conversation you want to have and have the conversation they want to have.

In closing

Moneyball was an innovation that fundamentally changed one of the most tradition-bound businesses in sports.  To be successful, it required someone willing to take it in the teeth, to coach people through a process, and to hang up when they got the answer they wanted.  It wasn’t easy but real change rarely is.

The same is true in corporations.  They need their own Bill Beanes.

Are you willing to step up to the plate?

The One Word that Transforms Your Approach to Innovation

The One Word that Transforms Your Approach to Innovation

Have you heard any of these sentences recently?

“We don’t have time”

“Our people don’t have the skills”

“We don’t have the budget”

“That’s not what we do”

I hear them all the time.  

Sometimes they’re said when a company is starting to invest in building their innovation capabilities, sometimes during one-on-one stakeholder interviews when people feel freer to share their honest opinions, and sometimes well after investments have been made.

Every single time, they are the beginning of the end for innovation.

But one word that can change that.

“We don’t have time – yet.”

“Our people don’t have the skills – yet.”

“We don’t have the budget – yet.”

“That’s not what we do – yet.”

Yet.

Yet creates space for change.  It acknowledges that you’re in the middle of a journey, not the end.  It encourages conversation.

“We don’t have time – yet.”

“OK, I know the team is busy and that what they’re working on is important.  Let’s take a look at what people are working on and see if there are things we can delay or stop to create room for this.”

“Our people don’t have the skills – yet.”

“Understand, we’re all building new muscles when it comes to innovation.  Good news, skills can be learned.  Let’s talk about what we need to teach people and the best way to do that.”

“We don’t have the budget – yet.”

“I get it.  Things are tight. We know this is a priority so let’s take a look at the budget and see if there’s a way to free up some cash.  If there’s not, then we’ll go back to leadership and ask for guidance.”

“That’s not what we do – yet.”

“I know.  Remember, we’re not doing this on a whim, we’re doing this because (fill in reason) and we have a right to do it because of (fill in past success, current strength or competitive advantage.”

You need to introduce the Yet.

It is very rare for people to add “yet” to their own statements.  But you can.

When someone utters an innovation killing statement, simply respond with “Yet.” Maybe smile mischievously and then repeat their statement with “yet” added to the end.

After all, you’re not disagreeing with them, you’re simply qualifying what they’re saying.  Their statement is true now but that doesn’t mean it will be true forever.  By restating their assertion and adding “yet,” you’re inviting them to be part of the change, to take an active role in creating the new future state.

There’s a tremendous amount of research about the massive impact of this little word.  It has helped underperforming students to overachieve and is closely associated with Dr. Carol Dweck’s research into fixed and learning mindsets.

The bottom line is that “yet” works.

Put Yet to work for you, your organization, and your efforts to innovate and grow.
5 ways to Build Your Innovation Muscles in the New Year

5 ways to Build Your Innovation Muscles in the New Year

According to a 2018 survey by NPR and The Marist Poll, the most common New Year’s resolution is to exercise more.  Not surprisingly, losing weight and eating a more healthy diet ranked third and further, respectively (“stop smoking” was #2, in case you’re curious).

Hitting the gym to drop weight and build muscle is a great habit to build, but don’t forget about the regular work needed to build other muscles.

Specifically, your innovation muscles.

Innovation mindsets, skills, and behaviors can be learned but if you don’t continuously use them, like muscles, they can weaken and atrophy.  That’s why it’s important to create opportunities to flex them.

One of the tools I use with clients who are committed to building innovation as a capability, rather than scheduling it as an event, is QMWD – the Quarterly-Monthly-Weekly-Daily practices required to build and sustain innovation as a habit.

 

QUARTERLY

Leave the office and talk to at least 3 of your customers

It’s tempting to rely on survey results, research reports, and listening in on customer service calls as a means to understand what your customers truly think and feel.  But there’s incredible (and unintended) bias in those results.

Take, for example, this story from former P&G CEO AG Lafley:

One very quick story; I will never forget this. We used to do annual research in the laundry detergent business, and every year consumers would rate the Tide powder cardboard package as excellent; excellent to shop; excellent for opening; excellent in use–on, on, on.

 

So, probably 27 or 30 years ago, I’m in basements in Tennessee, in Kentucky, doing loads of laundry with women, and after three or four or five of these one-on-one sessions, I’ve realized that not a single woman has opened a box of Tide with her hand. Why not? You’ll break your fingernails!

 

So, how did they open the box? They had nail files; they had screwdrivers; they had all kinds of things sitting down on the shelf over their washing machine, and yet they thought our package was excellent. And we thought our package was excellent because they were telling us our package was excellent. We had to see it and experience it.

 

Here’s the problem–consumers cannot really tell us what they want. They can tell you why they like it or why they don’t like it, but they cannot tell you what they want.

Schedule a day each quarter to get out of the office and meet your customers.  Ask them what they like and what they don’t.  More importantly, watch them use your products and then share what you heard and saw with your colleagues.

 

MONTHLY

Share with your team a mistake you made and what you learned from it

Silicon Valley mantras like “fail fast” and “fail often” make for great office décor but, let’s be honest, no one likes to fail and very few companies reward it.

Instead of repeating these slogans, reframe them to “learn fast and learn often” and role model the behavior by sharing what you learned from things you did that didn’t go as expected.  You’ll build a culture of psychological safety, make smart risks acceptable, and increase your team’s resilience.  All things required to innovate in a sustainable, repeatable, and predictable manner.

 

Do 1 thing just for the fun of it.

In the research that fed into their book, The Innovator’s DNA, professors Jeff Dyer, Hal Gregersen, and Clayton Christensen, found that the most common characteristic amongst the great innovators of our time was their ability to associate – “to make surprising connections across areas of knowledge, industries, even geographies” (page 41).  Importantly, their associative thinking skills were fed by one or more “Discovery Skills” – questioning (asking “why,” “why not,” and “what if”), observing, experimenting, and networking.

Fuel your associative thinking ability by doing something NOT related to your job or other obligations.  Do something simply because it interests you.  You might be surprised where it takes you.  After all, Steve Jobs studied calligraphy, meditation, and car design and used all of those experiences in his “day job.”

 

WEEKLY

Make 1 small change for 1 day

Innovation requires change and, if you’re an innovator, that’s the exciting part.  But most people struggle with change, a fact that can be frustrating for change agents.

In order to lead people through change, you need to empathize with them and their struggles which is why you need to create regular moments of change in your work and life.  One day each week, make a conscious change – sit on the other side of the conference room table, take a different route to the bathroom, use a black pen instead of a blue one.  Even small changes like this can be a bit annoying and they’ll remind you that change isn’t always the fun adventure you think it is.

 

DAILY

Ask “How can we do this better?”

Innovation is something different that creates value.  Which is good news because that means that all it takes to be an Innovator is to DO something DIFFERENT and create VALUE.  The easiest way to do that is to find opportunities for improvement.

The next time you’re frustrated with or confused by a process, ask “how can we do this better?”  Better can be more simply, faster, cheaper, or even in a way that is more enjoyable but, whatever it means, the answer will point the way to creating value for you, your team, and maybe even your company.

 

In closing…

Block time on your calendar for these quarterly, monthly, weekly, and daily habits.  After all, the best reflection of your priorities are the things in your calendar.  And, if you stick with this, you’ll be among the 8% who achieve their New Year’s goals.

 

Originally published on December 5, 2019 on Forbes.com

Our Approach to Innovation is the Definition of Insanity, so Let’s Try Something Different

Our Approach to Innovation is the Definition of Insanity, so Let’s Try Something Different

“The definition of insanity is repeating the same actions over and over again and expected different results.”

This quote, often (wrongly) attributed to Albert Einstein, is a perfect description of what has been occurring in corporate innovation for the last 20+ years.

In 1997, The Innovator’s Dilemma, put fear in the hearts of executives and ignited interest and investment in innovation across industries, geographies, and disciplines.  Since then, millions of articles, thousands of books, and hundreds of consultants (yes, including MileZero) have sprung forth offering help to startups and Fortune 100 companies alike.

Yet the results remain the same.

After decades of incubators, accelerators, innovation teams, corporate venture capital (CVC), growth boards, hackathons, shark tanks, strategies, processes, metrics, and futurists, the success rate of corporate innovation remains stagnant.

Stop the insanity!

I have spent my career in corporate innovation, first as part of the P&G team that launched Swiffer and Swiffer WetJet, later as a Partner at the innovation firm founded by Clayton Christensen, and now as the founder of MileZero, an innovation consulting and coaching firm.

I have engaged in and perpetuated the insanity, but I’ve also noticed something – 90% of what we do in corporate innovation speaks to our logic and reason, it’s left brain focused, and 10% speaks to creativity and imagination, our right brains. BUT 0% of our work speaks to the hearts hopes, fears, beliefs, desires, and motivations of the corporate decision-makers who ultimately determine innovation’s fate. 

We spend all out time, effort, and money appealing to their brains when, in reality, the decisions are made in their hearts.

Of course, no corporate executive will ever admit to deciding with their heart, after all, good management is objective and data-based.  But corporate executives are also human, and, like other humans, they make decisions with their hearts and justify it with their heads.

Consider this very common scenario:

A CEO announces to investors and employees that “Innovation” is a corporate priority and that the company will be making a “significant” investment in it over the next 3 years.  A Chief Innovation Officer is put in place and Innovation Teams start popping up in every Business Unit (BU). 

These BU Innovation Teams are staffed with a few people and given budgets in the hundreds of thousands of dollars.  They are told to use Design Thinking and Lean Startup methods to create new products or services to better serve existing or new customers.

Each BU team, excited by their new mandate and autonomy, fan out to talk to customers, host brainstorming sessions, and create prototypes.  They pull together business cases showing the huge potential of the new product or service and run experiments to prove early market traction.  They meet regularly with the BU President and other key decision-makers. 

Everything is going perfectly until, about a year into the work, the company has a bad quarter, or the BU is likely to miss expectations, or an innovation experiment delivers worse than expected results. 

Suddenly, everyone is a skeptic.  Budgets get cut.  Team members are re-assigned to “help” other projects.  The team’s portfolio shrinks to a single project.  And like that – poof – the Innovation Team is gone.

As apocalyptic as that scenario may seem, the numbers back it up.  According to research by Innovation Leader, the average tenure of a Chief Innovation Officer is 4.18 years while an Innovation Manager’s tenure is 3.3 years.

What went wrong?  The company did everything by the book – they hired the right talent, established dedicated teams with dedicated budgets, talked to customers and created a portfolio of ideas, built prototypes and made small bets.

Innovation is an investment in the future so one bad quarter shouldn’t be its death knell. But it is. 

The reason is that executives know that innovation must be invested in today to produce results in the future, but they do not believe that they will be rewarded for prioritizing the future over the present. 

This belief then leads to fear about the uncertainty of future returns and the repercussions of failing to deliver the present, which then leads to fear that their career will stall or that they will lose their job, which then spirals into all sorts of other fears until, eventually, the executive feels forced into a “them or me” decision.

They decide with their heart (fear) and justify with their head (bad quarter).

The solution to this is neither simple nor quick but it is effective – we must dedicate as much time and effort to recognizing and addressing the thoughts, feelings, and mindsets (heart) that executives and key decision-makers face in the pursuit of corporate innovation as we spend on the structures, processes, and activities (head) of corporate innovation.

If this sounds like coaching, you’re right.  It is.  Just as executives benefit from coaching as they take on new and greater responsibility, they also benefit, in the form of increased confidence and better results, when they have coaches guide them through innovation.  This is because innovation often requires executives to do the opposite of what they instinctively do when managing the core business.

Innovation is a head AND a heart endeavor, and we need to start approaching it as such. 

To do anything less is the definition of insanity.

*** Originally published on on Forbes.com ***

Slow Down to Avoid These 3 Innovation Speed Traps

Slow Down to Avoid These 3 Innovation Speed Traps

“Speed Kills” is as true in innovation as it is on the road.

Although it’s a widely held belief that speed equals success in business, as evidenced by companies’ drive to be first to market and Silicon Valley’s mantra to “Move fast and break things,” there are as many examples of companies that won by moving slow and steady as there are of those that moved fast.

Don’t believe me?

Apple was never first to market in a category.

Facebook was not the first online social network.

WalMart was not the first discount store.

The key to success isn’t doing things quickly, it’s doing the right things rapidly.

This is harder than it sounds to large companies that have internalized the belief that they need to act more like start-ups.  In fact, in my work with corporate innovators, also called Intrapreneurs, I often find myself in the strange position of advising them to slow down.

Not slow down to the glacial pace of the core business, of course, And certainly not slow down simply for the sake of it.  But to slow down to allow time to learn, explore, and build confidence that they are solving the right problem in the right way for the right people.

The three most common “Innovation Speed Traps,” times when innovators instinctively speed up when they should slow down, happen early in most innovation efforts.

Speed to idea – Everyone loves ideas.  They are exciting to create and energizing to pursue.  Unfortunately, they’re also a dime a dozen and as evidenced by the percentage of start-ups that fail due to poor product-market fit, no guarantee of market success.

Innovators that start with an idea tend to fall in love with it and pursue it with a single-minded passion that crowds out information and insights that could indicate a pivot or even an entirely new solution is required.  This leads to investments of time, money, and energy in an idea that is unlikely to ever achieve market adoption or success.

Speed to MVP – Even more exciting than an idea is when an idea progresses to a prototype and an MVP (minimally viable product).

While a prototype is incredibly helpful in getting customer feedback and refining a solution, focusing solely on the solution (product, service) to the exclusion of other elements of the business model can leave value on the table.  Even patented solutions can be easily copied whereas innovations in other parts of the business model, such as the revenue model or key processes, are much harder to copy and scale.

Speed to market testing – Once a business model MVP has been created, many companies then launch it into one or more test markets as a way to gauge its commercial viability.  This small-scale testing feels safe because it’s confined to a small portion of the company’s overall market, but it also makes it incredibly difficult to isolate the root cause(s) of unexpected or poor results.

As common as these Innovation Speed Traps are, they’re also easy to avoid.

Slow down to understand the problem then speed to an idea.  Successful innovators fall in love with the problem, not the solution.  That means that they slow down, talk to customers and stakeholders, and invest time in deeply understanding what the real problem is and why it is a problem.

For example, in the 8-week Intrapreneurship Academy program I teach for high potential managers in the cable industry, participants start the program by identifying a problem that they want to solve during the course but, most of the time, however, they rephrase their ideas into a problem statement. When, in the second week of the course, they take the time to interview customers, they realize that not only was their idea wrong but that they were focused on solving the wrong problem

Slow down to consider the whole business model then speed to an MVP.  Once innovators are clear on the problem and confident that it’s the one that customers most need to be solved, they should consider scheduling two brainstorming sessions.  The first can focus on creating a solution to the problem and the second is dedicated to discussing and brainstorming sew approaches to other parts of the business model.

Slow down to identify Deal Killer Assumptions then speed to testing – Instead of testing every element of a new solution all at once, innovators should apply the scientific method to the innovation.  To do this, innovators brainstorm all of the assumptions they’re making then assess how confident that they are that the assumption is right and the risk to the innovation’s viability if the assumption is wrong.  Assumptions where there is low confidence and high negative risk should be tested by a single specific experiment.  Once each Deal Killer has been tested, the team’s confidence that the assumption is right is increased, and the negative risk to the solution’s viability is decreased, then innovation teams can progress to integrated tests like test markets.

By slowing down, corporate innovators can speed up and get to real results and lasting change far more efficiently.  They just need to remember the word of the late great basketball coach, John Wooden,

“Don’t mistake activity with achievement.”