“What had a bigger impact on the project? The process you introduced or the people on the team?”
As much as I wanted to give all the credit to my brilliant process, I had to tell the truth.
“People. It’s always people.”
The right people doing the right work in the right way at the right time can do incredible, even impossible, things. But replace any “right” in the previous sentence, and even the smallest things can feel impossible. A process can increase the odds of doing the right work in the right way, but it’s no guarantee. It’s powerless in the hands of the wrong people.
But how do you assemble the right group of people? Start with the 3 Ts.
Type of Innovation
We’re all guilty of using “innovation” to describe anything that is even a little bit new and different. And we’ve probably all been punished for it.
Finding the right people for innovation start with defining what type of innovation they’ll work on
- Incremental: updating/modifying existing offerings that serve existing customers
- Adjacent: creating new offerings for existing customers OR re-positioning existing offerings to serve new customers
- Radical: new offerings or business models for new customers
Different innovation types require teams to grapple with different levels of ambiguity and uncertainty. Teams working on incremental innovations face low levels of ambiguity because they are modifying something that already exists, and they have relative certainty around cause and effect. However, teams working on radical innovations spend months grappling with ambiguity, certain only that they don’t know what they don’t know.
Time to launch
Regardless of the type of innovation, each innovation goes through roughly the same four steps:
- Discover a problem to be solved
- Design solutions
- Develop and test prototypes
- Launch and measure
The time allotted to work through all four steps determines the pace of the team’s work and, more importantly, how stakeholders make decisions. For example, the more time you have between the project start and the expected launch, the more time you have to explore, play, create, experiment, and gather robust data to inform decisions. But if you’re expected to go from project start to project launch in a year or less, you need to work quickly and make decisions based on available (rather than ideal) data.
Tasks to accomplish
Within each step of the innovation process are different tasks, and different people have different abilities and comfort levels with each. This is why there is growing evidence that experience in the phase of work is more important than industry or functional expertise for startups.
There are similar data for corporate innovators. In a study of over 100,000 people, researchers identified the type and prevalence of four types of innovators every organization needs:
- Generators (17% of the sample): Find new problems and ideate based on their own experience.
- Conceptualizers (19%): Define the problem and understand it through abstract analysis, most comfortable in early phases of innovation (e.g., Discover and Design)
- Implementers (41%): Put solutions to work through experiments and adjustments, most comfortable in later stages of innovation (Develop and Launch)
- Optimizers (23%): Systematically examine all alternatives to implement the best possible solution
Generators and Conceptualizers are most comfortable in the early stages of innovation (i.e., Discover and Design). Implementers and Optimizers are most comfortable in the later stages (e.g., Develop and Launch). The challenge for companies is that only 36% of employees fall into one of those two categories, and most tend to be senior managers and executives.
Putting high performers on innovation teams is tempting, and top talent often perceives such assignments as essential to promotion. But no one enjoys or benefits when the work they’re doing isn’t the work they’re good at. Instead, take time to work through the 3Ts, and you’ll assemble a truly terrific innovation team.
In the Before Times, we attended conferences to learn, make connections, and promote ourselves and our businesses. Then COVID hit, and conferences became virtual. Although that made them easier to attend, it also made them easier to skip. Because, if we’re honest, most conferences were more about connecting and promoting than learning.
Last week, I went to one of those rare, almost mythical, conferences more focused on learning and connecting than promoting. It was fantastic! It was also in Nebraska (which is a pretty interesting place, btw).
Here are my three biggest mind-blowing takeaways from Inside Outside’s IO2022 Summit:
“Strategy is the direction you take to win in the future“
Kareen Proudian, Managing Partner at Faculty of Change
It’s a bit embarrassing to admit, but if you asked me to define “Strategy,” I’d respond with a long and rambling answer. Which means I can’t define “strategy.” This admission is especially embarrassing because I have a resume littered with places where I developed, drafted, and implemented strategies, so I should have learned what the word means. But nope, I didn’t.
I suspect I’m not alone.
Asking for the definition of strategy is like asking if you must wear clothes to the office. You should know the answer. But unlike whether or not clothing is mandatory, most of us don’t know the answer, AND it’s easy to get away with never knowing the answer.
The elegant simplicity of Kareen’s definition of strategy blew my mind. It’s short, memorable, and something that most people can understand. Maybe I should share the definition with my alma maters and past employers.
“When we feel threatened, our IQ drops 50 to 70 points”
Alla Weinberg, CEO at Spoke & Wheel
When I first heard talk about Psychological Safety and Safe Spaces in today’s business world, I rolled my eyes. Hard. As a Gen X-er, I grumbled about how we didn’t need “safe spaces” when I grew up because we were tough and self-reliant, and I lamented the inevitable downfall of society caused by weak and coddled Millennials.
I was wrong.
Psychological Safety is absolutely and unquestionably essential for individuals to grow, teams to work, companies to operate and innovate, and societies to function and evolve. I’ve seen teams and businesses transform and achieve unbelievable success by discussing and living the elements they require for Psychological Safety. I’ve also seen teams and businesses fail in its absence.
These results aren’t surprising when you realize that you feel threatened when you are in a complex situation in which you cannot accurately predict the outcomes. And when you feel threatened, you are half as intelligent, effective, and creative as you are when you’re calm.
So, if you’re a manager and you’re upset that your people aren’t as intelligent, effective, or creative as they should be, it may not be their fault. It may be yours.
“Stage expertise, not industry expertise, is key to innovation success“
Sean Sheppard, Managing Partner at U+
There is deep comfort in the known. It’s why we gravitate to people like us. It’s also why companies ask job candidates and consultants about their experience in the industry and choose those with deep experience and impressive expertise. Often, there’s nothing with this question or the resulting decision.
Sometimes, it’s precisely the wrong question.
Sometimes, functional expertise is significantly more important than industry experience. After all, if you’re the hiring manager at a healthcare company looking for a Director of Finance, who would you hire – a Marketing Director from a competitor or a Finance Director from a CPG company?
That’s the case with innovation.
Decades of real-world experience (not to mention the successful launch of 100+ startups) show that successful corporate startup teams had expertise (mindsets, skillsets, executional drive) in the startup’s phase and a working knowledge of the industry rather extensive industry expertise and little to no innovation experience.
Questions are good. The right questions are better. So, the next time you’re staffing up an innovation team (or hiring a consultant), choose based on their innovation experience and willingness to learn about your industry.
Innovation happens everywhere
That’s why people from San Francisco, Austin, Washington DC, NYC, Toronto, Boston, and dozens of other places converged on Lincoln, Nebraska.
We went to see innovation in action and learn about the thriving startup community in the middle of the country. We also went to learn and connect with others committed to creating new things that create value.
Getting our minds blown was a bonus.
Several months ago, a colleague sent me a link to Roger Martin’s latest article, “The Presumption of Guilt: The Hidden Logical Barrier to Innovation.” Even though the article was authored by one of the preeminent thinkers in the field of innovation and strategy (in 2017, Thinkers50 voted him the #1 most influential management thinker in the world), I didn’t have too much hope that I would read something new or interesting. After all, I read A LOT of articles, and 99 times out of 100, I’m disappointed (80 times out of 100, I roll my eyes so hard I give myself a headache).
This one blew my mind.
With just a few sentences and applying a well-known analogy, Martin explained a phenomenon that plagues every organization and kills most innovation.
Presumed Innocence is a fundamental human right
Martin begins by pointing out that in the legal systems of modern democracies, all citizens are presumed innocent until proven guilty beyond a reasonable doubt. In 1948, the United Nations extended this concept to all nations (not just democracies) in Article 11.1 of their Declaration of Human Rights.
The presumption of innocence is so important because “the presumption of guilt (or even neutrality) puts an almost impossible burden on the defendant. The State is strong and has resources far beyond that of the individual.”
Presumed Innocence is not a fundamental innovation right
Now let’s apply this analogy and the lens of presumption of innocence or guilt to business, arguably a field where we spend much more time and make far more judgments.
You, and your fellow decision-makers, are judges and jury.
It is up to you to determine whether the projects in front of you are innocent (worthy of additional investment) or guilty (not worthy).
If you presume all defendants are guilty, you place the burden of proof on them. They must prove beyond a reasonable doubt that they will succeed and are, therefore, worthy of investment.
If you presume all defendants are innocent, you place the burden of proof on yourself (or the business as a whole). You must prove beyond a reasonable doubt that they will fail.
What type of judge are you? What kind of decision-making system do you preside over? Do you presume guilt or innocence?
In most boardrooms, projects are presumed guilty.
Presumptions in practice
Let’s consider the two “defendants” (types of projects) that appear before you – core business projects and innovation projects.
Each defendant has a team of advocates. The core business typically has a large team with ample resources and a history of success. Innovation has a much smaller team with far fewer resources and few, if any, “in-market” successes.
To be fair, you ask the same questions of both defendants – questions about market growth, performance versus competitors, and what the P&L looks like.
The team advocating for the core business produces data-filled slides, reports from reputable third parties, and financials blessed by Finance. In the deluge of facts, you forget that all the data is about the past, and you’re making decisions about the future. You find the evidence compelling (or at least reassuring), determine that the team met their burden of proof, declare the Core Business innocent, and allocate additional funds and people.
Innovation’s team also comes with slides, reports, and financials, but it’s not nearly as compelling as what you just saw from the current business team. But you are a fair judge, so you ask most questions like
- We believe we can get X% of a Total Addressable Market estimated to be Y
- There are no direct competitors, but consumers rated this better than current solutions
- We don’t have a 5-year NPV or P&L for this business at scale because we’re not asking for permission to launch. We’re asking for $100,000 to continue testing.
Believe? We need to know!
No direct competitors? Perhaps there’s a reason for that!
No P&L? I’m not going to throw scarce money away!
“Guilty!” you declare, “no more resources for you! Try again!”
This example illustrates what Roger Martin considers corporate innovation’s fatal flaw. In his article, he argues,
“the status quo must play the role of the prosecutor and prove that the innovation is guilty beyond a reasonable doubt. The innovation asserts its case, laying out the future that it imagines is plausible and explains the logic that buttresses the plausibility. The onus is on the status quo to demonstrate beyond a reasonable doubt that the innovation’s logic is flawed — e.g., the proposed economics are unrealistic, customers haven’t shown a hint of caring about the unique selling features of the innovation, competitors already have a lead on us in the proposed area, etc.
If the status quo can do so, then the innovation is guilty. If it can’t, then the innovation is not guilty, and the organization should invest.”
As much as I love the idea of requiring the status quo (managers? Executives? Stockholders?) to prove that investments should not be made (i.e., the default answer is “Yes” to all requests), it’s just not a practical solution.
Burden of proof as barrier
There’s another fundamental principle in our legal system that Martin doesn’t touch on: the burden of proof shifts as the stakes increase.
Specifically, the State’s burden of proof increases from warrant to arraignment to grand jury to trial. For example, the State must provide probable cause based on direct or other reliable information to get a warrant. But the State must prove guilt beyond a reasonable doubt when the defendant goes to trial and risks losing their freedom or even their life.
But in the example above, the questions (proof required) remained the same.
The questions were appropriate for the Current Business because it’s already in the market, consuming massive resources, and its failure would have a catastrophic impact on the company.
But the questions aren’t appropriate for innovation in its early days. In fact, they were the business equivalent of demanding proof of guilt beyond a reasonable doubt to get a search warrant. Instead, a judge evaluating a project in the early Design phase should ask for probable cause based on direct or other reliable information – observed consumer behavior, small-scale research findings, or simple prototypes.
The Verdict is In
I love the concept of Presumed Guilty vs. Presumed Innocent. I see it all the time in my work, and it is painfully prevalent in Innovation Council meetings and other boardrooms where managers sit as judge and jury over a project’s (ad a team’s) fate.
I want to flip the paradigm – To make “yes” the default instead of “No” and to require managers, the keepers of the status quo, to prove beyond a reasonable doubt that a project will fail.
But I don’t think it’s possible (if I’m wrong, PLEASE tell me!).
Instead, our best bet for true innovation justice is not to shift who bears the burden of proof but rather how heavy that burden is at various points. From probable cause when the stakes are low to beyond a reasonable doubt when they’re high. And certainly more than a ham sandwich at any point
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.
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.
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.”
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.
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.
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
“We are not good at killing innovation projects.”
In the past two days, three people in two different companies across two different industries said these exact words to me.
If Step #1 in solving a problem is admitting that you have one, then my clients should feel pretty good about making progress.
But what’s Step #2?
“Killing the project” is an obvious and fundamentally unhelpful answer. But before we get to the less obvious and helpfully actionable answer, we need to acknowledge a fact about humans
We decide with our hearts, justify with our heads, and require guts to act.
As much as we would like to believe that we, as humans, are logical and fact-driven, we’re not. If we were, we would not be swayed by brands and we would all agree on the best restaurant, music, and political candidate.
Beliefs, values, emotions, and connections (our heart) drive our behavior. We choose things that help us feel a certain way, create a certain perception, or signal our belonging to a certain group. As Clay Christensen would say, we choose things that solve emotional and social Jobs to be Done.
We then find or seek out facts and evidence that justify the decisions our hearts have made. We want to be logical and rational, to make “the best choice,” and to be able to sway people with our arguments. We use our heads to justify our hearts.
But that alone isn’t enough. We don’t do things that we know we should (flossing, eating vegetables, maintaining long-term investments in innovation). We do what we want even though we know we shouldn’t (eat a lot of sugar, drink too much, binge watch anything that starts with “Real Housewives of”).
We need motivation and courage (guts) to translate our wants and our thoughts into action. Perhaps, even more importantly, when our heads and our hearts disagree, we need guts to make the decision and act.
Because without guts, when the head and the heart disagree, the heart always wins.
That’s why you’re not good at killing projects.
Here’s a common scenario: after working for several years on a new product you get data that shows that it won’t “work.”
Perhaps it’s clinical data indicating that the product doesn’t provide the efficacy required. Or market data showing that customers aren’t willing to buy the product at the current price or buy as much of it as expected to justify the investment. Or benchmarking data that estimates that your product will be in the bottom 5% of products ever launched by your company.
Whatever it is, it’s not good and the data and logic all dictate that the project should be killed.
Instead, you deem it to be “strategic” and keep working on it.
This is because, in your heart, you believe in the project. You were part of creating it. You nurtured it from concept to concrete, guiding it through near-death experiences, and celebrating its successes. You love this project.
Your heart says “keep going,” while your head says “make it stop.”
You need guts to make the decision.
It’s hard to decide, but Step #2 makes it easier.
If the first step is knowing in your head that the project is not viable and will not meet expectations no matter what you do, the second step is finding the guts to resist your every instinct and decide in favor of your head.
To find the guts to make the call, you need to acknowledge your heart and the feelings, emotions, and beliefs that are motivating you to try just one more thing.
(If you’re a Very Serious Business Professional and are super freaked out by the last sentence, imagine that I wrote, “you need to acknowledge your cognitive biases like the sunk cost fallacy, not invented here bias, or the IKEA effect” and keep reading)
To acknowledge your heart and empower your guts, you need to say goodbye and create closure.
How to do this effectively is determined by the culture of the team and company, but here are some examples I’ve seen and been part of:
- Write the project’s eulogy
- Hold a funeral (traditional, New Orleans, Irish, or Viking all qualify)
- Have a “Reading of the Will” in which the project bequests mementos and silly awards to team members
- Create a memorial like planting a tree or, taking a cue from Ben & Jerry’s, a graveyard
- Establish an award in its name and give it out every year to a person who has shown the courage to preserve and the wisdom to know when to quit
Yes, I know this sounds silly but so does having funerals for goldfish and we do that. We do it for the same reasons we struggled to kill the project – because we love it, and we will miss it.
Just as we feel very sad but know we did the right things when we flushed the goldfish, you will feel sad but know you did the right thing when you kill the project.
And while it will never be easy, it will get easier and you will get better at killing projects (just like I did after going through 23 goldfish my senior year of college).