Some conversations stick with you for a long time.
Some conversations take your breath away the moment they happen.
A few weeks ago, I had one that did both.
“Everyone is focused on ‘humanizing’ work,” my client said. “I wish people would de-humanize work. I would love nothing more than to be treated like a line of code or a piece of equipment. We treat our code and equipment better than we treat our people.
When a piece of equipment doesn’t work, we send in teams of people to fix it. We study what went wrong, we fix the error, and we take action to make sure it doesn’t happen again. We don’t expect a line of code to work in every operating system, to be able to do everything in every context. We know that we need to adapt it for iOS or Android.”
As I picked my jaw up off the floor and put my eyes back in my skull, she continued.
“But people…when a person is struggling, we don’t send anyone to help. We don’t ask why they’re struggling or study the situation or take action so that no one else experiences the same problem. We expect the person to either fix their own problem or to leave.
We expect everyone to be able to work in every situation and when there’s a mismatch, we expect the more junior person to ‘expand their toolkit’ and ‘learn to work with other styles’ or to leave.
“If we treated our people the way we treat our products, our people would be so much happier, and we’d be so much more successful as a company.
Talk about a truth bomb.
And it’s not just her company. It’s almost every company I’ve worked for or with.
Think about it. What happens when a project is going off the rails? Or a product is malfunctioning? Or a shipment is delayed or missed? The team, maybe even the full company, shifts its focus to solving the problem. People, time, money, all of it funnels to fixing the problem and getting things back on track.
But what about when a person or a team is struggling? Or about to burn out? Or devolving into dysfunction? They become the problem and people start to back away. They’re given self-guided training. They’re reminded of their job responsibilities and expectations. They’re put in a new role and made someone else’s “problem.” They’re let go from the company.
When a product isn’t meeting expectations, we rush to help.
When a person isn’t meeting expectations, we back away.
Maybe we do need to start treating our people like our products.
Maybe de-humanizing work is the key to making it work for humans.
A few weeks ago, I wrote a post using quotes from “Moneyball” (the movie, not the book) to describe the experience of trying to innovate within a corporate setting.
It was great fun to write, I received tons of feedback, and had many fascinating conversations (plus a fact check on the year the Red Sox broke the Curse of the Bambino), so I started searching for other movies that inadvertently but accurately describe the journey of corporate innovators.
The Princess Bride
If you have not seen The Princess Bride, stop reading and immediately go watch it. Seriously, there is nothing more important for you to do right now than to crawl out from the cultural rock you’ve been under since 1987 and watch this movie.
If you’re reading this, you’ve clearly watched the movie and know that it is packed with life lessons and quotable quotes. It also captures the reality of innovation within the walls of large companies
“You keep using that word. I don’t think it means what you think it means.” – Inigo Montoya
A company’s focus on Innovation usually begins the moment a senior executive, usually the CEO, declares it to be a key strategic priority and promises Wall Street analysts that significant investments will be made.
It then trickles down to business units and functions, with each subsequent layer told to “be more innovative” and “come up with more innovation.”
Then, one day, the responsibility for innovation lands in someone’s lap and stays there. To be honest, it’s usually an exciting day for the person because they’ve been asking questions, suggesting ideas, and pushing for innovation for a long time, and now the powers that be have permitted them to do something about it. They may even have been given a title and budget specific for innovation.
But “innovation” was never defined.
The CEO may think it is an entirely new business, something flashy and new that rivals anything coming out of Silicon Valley.
The Business Unit and Functional Heads may think it’s a new product or technology, something just different enough from the current business to be newsworthy but not so different that it changes how things are done.
And the new Innovation owner thinks it’s new ideas, lots of brainstorming sessions, and networking with entrepreneurs and startups.
Without alignment as to what “innovation” means and what it needs to deliver, the stage is set for misalignment, frustration, and ultimately failure. Al because that word, “Innovation,” does not mean what you think it means.
“We’ll never survive.” – Buttercup, the Princess Bride
“Nonsense, you’re only saying that because nobody ever has.” – Westley
Let’s imagine for a moment that a common definition and set of expectations for innovation is established and everyone up and down the corporate hierarchy is in agreement (this actually does happen, but it takes effort).
The innovation owner has a clear mandate and is hard at work building an innovation pipeline – they’re having lots of qualitative interviews to build customer empathy, they’re facilitating brainstorming sessions to get ideas, they’re building prototypes to get customer feedback. Most importantly, they’re sharing their work with anyone who will listen, asking for feedback, and building supporters and champions.
And then, the chorus begins.
“This will never work”
“You’ll never get approval for that”
“If we do that, we’ll lose customers”
“If you do that, you’ll be fired.”
In these moments, the dark seeds of doubt are planted. The innovation owner must dig deep, reminding themselves that people are only saying those things because it hasn’t worked yet, no one got approval yet, customers haven’t yet weighed in, and you haven’t tried to do that yet.
After all, just because something has never been done, doesn’t mean that it can’t be done.
“Thank you so much for bringing up such a painful subject. While you’re at it, why don’t you give me a nice paper cut and pour lemon juice on it.” – Buttercup, the Princess Bride
Let’s be honest, most corporate innovation efforts don’t result in the world-changing, life-affirming successes we hop for. Innovators are, by nature and necessity, an optimistic bunch so when things don’t work out as we hope, it hurts. It hurts as much as a paper cut with lemon juice poured on it.
But there is one truth that cuts across all attempts at corporate innovation, no matter whether the journey ends with wild success in the form of massive business growth, happy success in the form of new products and revenue streams, satisfying success in the form of improvements and greater efficiencies, or bitter disappointment because nothing changes and everyone goes on to old or new jobs.
“I supposed you think you’re brave, don’t you?” – Vizzini
“Only compared to some.” – Buttercup, the Princess Bride
Those who took on the work and responsibility of innovation are brave.
Not only compared to some but compared to most.
It takes guts to try something new. To ask questions. To challenge the status quo. To continue seeking a yes amongst a thousand no’s. To put your reputation, your bonus, and maybe even your job on the line.
And that’s what corporate innovators need to remember – that whatever happens, they were brave. They worked hard, they battled the odds, they did make change happen. Even if it was only how they see and understand the world. Even if it only to get smarter and stronger and prepare for the next time they are called upon to drive change.
Because in that moment, innovators must be ready to say “As you wish.”
Of all the facets of innovation, innovation metrics may be the most requested, studied, and debated.
This is not surprising given that companies need to justify the billions of dollars they spend every year on “innovation” and the best way to do that is through a sound set of metrics with proven predictive power and relevant benchmarks.
However, despite the need, and decades of work to address it, a satisfying answer to “what innovation metrics should we use?” is as elusive as ever.
The key word there is “satisfying”
Innovation metrics exist. There are probably hundreds of them.
Innovation metrics are in use. Maybe even at your company.
But one universal set of metrics with proven predictive power and relevant benchmarks? Nope, that doesn’t exist.
And it shouldn’t exist.
What innovation is, why it is pursued, and the investment of resources and time required varies from industry to industry and company to company. So, it makes no sense to apply a standard set of metrics to a custom approach and activity.
The trap of “satisfying” metrics
“What gets measured gets managed” is a trap (and also not true and Peter Drucker never said it).
It’s a trap because, as noted by monetary theorist Charles Goodhart noted, “Any statistical regularity will tend to collapse once pressure is placed upon it for control purposes.”
Or as us common folk (and anthropologist Marilyn Strathern) say, “When a measure becomes a target, it ceases to be a good measure.”
It is not satisfying when ideas become cobras
Although Goodhart’s Law was first articulated in 1975, it’s been in action for centuries. Consider the story of the British government’s bounty on cobras back when India was still a colony – to reduce the cobra population, the British government offered to pay people for every dead cobra they brought in. The money was good and eventually, people started raising cobras for the sole purpose of killing them to collect the county.
This is exactly what happens with most innovation metrics.
Because companies are so keen to measure and track progress, they set metrics they can measure. Those measurable metrics quickly become targets.
For example, one of my clients was eager to “fill their innovation funnel” and so they set a metric for the number of new ideas submitted each quarter. It didn’t take long before the innovation team spent most of the last day of each quarter frantically submitting “new ideas” so that they could hit the target.
The next day, they would go into the system and reject all the frantically submitted ideas because the ideas didn’t meet established qualitative criteria for strategic fit, scalability, or business potential.
At the end of the year, management was dumbfounded – despite getting thousands of ideas, the team had yet to pilot an idea, let alone launch a new business and generate revenue.
Metrics aren’t satisfying if they aren’t effective in achieving your ultimate goal
Was killing lots of cobras Britain’s ultimate goal? No.
They wanted to decrease the cobra population.
But killing cobras was a key step in decreasing the population and it was easier and faster to measure and track the number of cobras killed.
Was getting lots of ideas my client’s ultimate goal? No.
They needed to increase revenue by 50% in the next 5 years.
But getting ideas was a key step in creating a new stream of revenue and it was easier and faster to measure and track the number of ideas submitted.
How to Create Effective Innovation Metrics
State the ONE Why.
This is the hardest part of setting metrics because there are lots of reasons to pursue innovation. But we have to remember that innovation is a means to an end and effective metrics focus on the end, not the means.
I like to use the 5 Whys to get to the ultimate goal. Here’s a rough approximation (with completely made-up numbers) of the conversation I had with the client mentioned above:
- ME: Why do you want # of new ideas in the funnel each quarter?
- Client: Because we need that many to get 4 new products to pilot
- Me: Why do you need to pilot 4 new products?
- Client: Because we have a 50% pilot success rate
- Me: OK, so you need to launch 2 new products. Why two?
- Client: Because our new products generate $100M in Yr 1 revenue
- Me: Why do you need $200M in new revenue each year?
- Client: Because we have a $1B gap between what we promised to shareholders and what we’re on track to deliver in 5 years
Their ultimate goal was to close a $1B revenue gap in 5 years, not generate # new ideas per year.
Set interim milestones.
Achieving an ultimate goal takes years of hard work and you may need to pivot or readjust expectations along the way. For that reason, it’s important to set interim milestones, not as decision points but as markers for when to pull your head out of the day-to-day details and assess whether or not you are on track and, if not, what you need to change.
Using the same client as an example, we could have decided that $1B in new revenue in 5 years meant that we needed to generate $200M in new revenue every year. But, as we talked through things, we realized that it would take time to fill the innovation funnel AND build the organizational capability to develop, test, and launch new products. As a result, we should set revenue goals that increased each year, reflecting the organization’s increasing innovation effectiveness.
Explore the MANY Hows.
Innovation may be one way to achieve your ultimate goal but there are lots of others and it’s important to stay open to all of them.
For my client, we quickly realized that it wasn’t reasonable to rely solely on organic innovation to close the $1B revenue gap. Instead, we needed to explore multiple approaches from organic innovation to M&A and everything in between.
It’s easy to fall into the trap of “satisfying” metrics that measure activity.
It’s a bit harder to evade the trap by identifying effective metrics that measure progress to an ultimate goal.
But, I can assure you, achieving that ultimate goal is way beyond satisfying.
We all love Innovation but there are times when it isn’t the answer. In fact, there are times when it is the absolute last thing a business should do.
Do NOT innovate if:
- Your current business is declining
- You need immediate results
- You want to play it safe and follow rather than lead
- You’re afraid of losing customers
- You’re afraid of falling behind the competition
- You’re getting pressure from shareholders
- You want to hang out with famous CEOs/be on TV and the cover of magazines
- You read an article/book/had a conversation and it doesn’t seem that hard
- You want to do something fun/different/exciting/noteworthy
- You can
Luckily, there is a corresponding list of times when Innovation is the answer.
DO innovate when:
- Your current business is solid
- You need a pipeline to deliver new revenue now AND in 3, 5, 10 years
- You are willing to take smart risks so you can lead instead of follow
- You want to better serve your customers
- You are confident in the business fundamentals and its future potential
- You believe in investing and building for the long-term
- You care about the long-term health of the business and your people
- You are committed to learning and building an organizational capability
- You are willing to work hard for a long time to do the impossible
- You will
Did you notice some themes in those two lists?
In the first list, you’re reacting. The beliefs, biases, and prejudices of your unconscious mind are controlling and driving you. An event occurred in your environment and now you’re afraid of losing something – great business results, competitive advantage, stakeholder support, your reputation. You’re afraid of losing something so you’re looking for something to save you and innovation is a bright shiny object that everyone loves, and no one will fault you for pursuing it.
In the second list, you’re responding. Your conscious and unconscious minds are working together to take in information, considering the well-being of those around you, and factoring in your beliefs and values. An event occurred in your environment that presents new information. Instinctively you perceive it as a threat but then reframe it as an opportunity to create, change, or improve the status quo. As a sign of your commitment and belief in the possibilities and potential, you use innovation as a tool to drive long-lasting impact.
The next time you consider starting an innovation project, hosting an innovation event, or staffing up an innovation team, pause to consider why you’re doing it. Is the answer on the first list or the second?
After all, just because you can, doesn’t mean you should.
“Fall in the love the problem, not the solution.”
Although not as well-known as other innovation mantras like “Fail Fast” and “See around corners,” this mantra is, in my experience, truer than any of them. It is also harder to follow.
It’s hard to fall in love with a problem.
By the time most of us enter the workforce, we are Do-ers. Our bosses train us to bring solutions, not problems. Our employers reward us for showing initiative, taking action, and resolving issues. We celebrate when we find the answer, crack the case, and drive the change.
We have stopped being Questioners, Wonderers, and Explorers. We stopped asking “Why?” and “What if?” and “Why not.” We stopped wondering why or where or when or how things might be or once were or could be. We stopped exploring the unknown, the uncertain, and the unexplained.
Falling in love with a problem requires us to ask why it exists and why it hasn’t been solved yet. It requires us to wonder about why things that look like solutions aren’t. It requires us to explore and look for root causes and to welcome surprises.
Falling in love with a solution is what we are trained to do.
But falling in love with a solution, not the problem it solves, locks us into a course of action that is often all or nothing.
Falling in love with the problem is what we need to do.
Falling in love with a problem gives us a place of certainty to return to. The problem is evidence of market opportunity, we simply need to find the solution that unlocks it.
Consider these 3 examples:
An R&D team develops a breakthrough new technology but producing it at scale would make it cost 10x the current solution.
- Fall in love with the Solution: Management shuts down the project due to lack of a viable business
- Fall in love with the Problem: The team updates management that the new technology is not economically viable and asks for an additional 3 months and $100,000 to develop a different solution. Management agrees.
A product team develops a new product, complete with new branding, positioning, and Direct to Consumer go to market strategy. Sales expresses concern that existing retail customers will view this as a threat.
- Fall in love with the Solution: Management cancels the project launch out of fear that retailers will retaliate by discontinuing all of the manufacturer’s products and heavily promoting competitors’ brands.
- Fall in love with the Problem: The team revisits the Go to Market strategy, questioning the importance of Direct to Consumer in solving the problem. The team realizes that, while it is important, it does not need to be the only distribution channel at launch, ultimately recommending that it be used to seed the market before distribution through traditional retailers. Sales positions pre-launch DTC as a net benefit for retailers and management approves the launch.
An innovation team develops a category-creating product that receives overwhelming acceptance in concept tests and receives top scores when evaluated against its nearest competitors. However, when launched into test markets, it fails miserably.
- Fall in love with the Solution – Option 1: Management ends the target markets and cancels the project
- Fall in love with the Solution – Option 2: Management continues to make incremental changes to the product, its positioning and marketing, and its pricing, ultimately spending millions over multiple years with little to no change in product adoption.
- Fall in love with the Problem – Team talks to their target consumers, including the people who gave the product high marks in concept tests, and learns that the problem the product solves isn’t a terribly painful or important problem and, as a result, consumers aren’t willing to spend money or change behavior to adopt a better solution. The team shelves the category-creating product to focus on creating a new solution to the real problem.
Did you see the pattern there?
When you fall in love with the solution and the solution fails, the project stops.
When you fall in love with the problem and the solution fails, you circle back to the problem and try again.
And if anyone would know the importance of being able to circle back, it’s the man credited with coining the “Fall in love with the problem, not the solution” mantra – Uri Levine. The founder of Waze.