Transcript Leading Innovation and Growth

Leading Innovation:
Making Stone Soup at UM B&F
Jeff DeGraff
Ross School of Business, University of Michigan
How Innovation Really
Works
A
What’s Innovation in Your
Book?




You have been asked to
write a cover story article
for a popular magazine
on your selection of the
most innovative
organization
What organization did
you select?
What makes it so
innovative?
Why this organization and
not the others?
www.competingvalues.com
3
What Makes These The Most
Innovative Companies?
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
Apple
Google
Microsoft
IBM
Toyota Motor
Amazon.com
LG Electronics
BYD
General Electric
Sony
Samsung Electronics
Intel
Ford Motor
st
www.competingvalues.com
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
Research In Motion
Volkswagen
Hewlett-Packard
Tata Group
BMW
Coca-Cola
Nintendo
Wal-Mart Stores
Hyundai Motor
Nokia
Virgin Group
Procter & Gamble
2010 1 Time Over ½ of Companies Not EU or US
BusinessWeek, April 15, 2010
BCG survey of 2,700 executives in 70 countries
4
What do Executives want from
Innovation?
Priorities
Minor changes to existing
products & services
Cost reductions to existing
products & services
New to world products
Priorities
New proudcts & services to
expand new customers
New products & services for
existing customers
0
www.competingvalues.com
20
40
60
80
100
5
What Stops Them from Having
Innovation?
Marketing or Communication Failure
18
Dearth of Ideas
18
Inadequate Measurement Tools
21
Poor Idea Selection
21
Limited Customer Insight
25
Risk-Averse Culture
26
Lack of Coordination
28
Lengthy Development Times
32
0
5
10
15
20
25
30
35
Barriers to Innovation
www.competingvalues.com
6
Who was the Most Innovative
Company from 1996 - 2001?
There is NO DATA on the future when breakthrough innovation pays
www.competingvalues.com
7
How Do Organizations Fail?







Study of 400 firms on Fortune
500 and 90 international firms
since 1955
Random sample of 50 firms
87% had experienced a stall
Growth rates increased up to
“stall year”
Dropped greatly in the
following years
Few regained momentum
Fewer returned to growth rates
within a decade after stall
www.competingvalues.com
8
What Causes the Failure?





The presumption of an
unassailable competitive
position by management
Innovation management
breakdown - Slow product
development, reduced R&D
spending, lack of coordination
Premature diversification from
"core" activities
Shallow bench and leadership
pipeline shortfall
POOR LEADERSHIP
www.competingvalues.com
In 2008 Google made 97% of the
Company’s revenue on a single
product!!!
9
Thought Experiment
What if the key to
innovation in your
organization doesn’t
entail STARTING
something new but
STOPPING
something old?
www.competingvalues.com
10
What is Stone Soup?







Parable about the
power of creativity in
communities
Overcoming suspicion
Crossing boundaries
Contributing little bits
Role of diversity
Self- authorizing ring
leaders that integrate
Village feasts
www.competingvalues.com
11
Principle 1: Give Innovation a
Wider Domain & Connect the Dots






Innovation enhances something
--Think Google
Innovation obsolesces something
--Think Schwab
Innovation retrieves something
--Think Barnes & Noble
Innovation reverses into its
opposite over time (time bound)
--Think e-mail
Innovation is how many things
come together to create value
(solutions)
Growth producing innovation is
just as likely to occur in inbound
logistics or packaging as it is in
marketing or R&D
Innovation is everywhere because
innovation isn’t a thing… it’s an
attribute of many things!
www.competingvalues.com
So the difference between change and
innovation is simply magnitude

12
Remember Criticism is Nothing;
Creativity is Everything
In many ways, the work of a critic is
easy. We risk very little yet enjoy a
position over those who offer up
their work and their selves to our
judgment. We thrive on negative
criticism, which is fun to write and
to read. But the bitter truth we
critics must face is that, in the
grand scheme of things, the
average piece of junk is probably
more meaningful than our criticism
designating it so. But there are
times when a critic truly risks
something, and that is in the
discovery and defense of the new.
The world is often unkind to new
talents, new creations. The new
needs friends.
Ratatouille (2007)
www.competingvalues.com
Anton Ego
13
Principle 2: Ride What
Moves…and Move Your Feet
Ride What Moves
 Consumer demands
 Competition
 Shareholders
 Science and technology
 Government regulations
 Geopolitics
 Macroeconomics
 Environment
 Outrageous fortune
… And Move Your Feet
 Beliefs
 Skills
 Choices
 Plans
 Actions
 Information
 Processes
 Measures
 NOT other people
See the Wave; Don’t Be the Wave
14
What’s Moving in Your World?
West to East
Big to Small
Money to Time
Alignment to Collaboration
What’s Not Moving?




The end of an era is typically
marked by increased control,
scale, centralization of
power, and conflict
The beginning of a new era is
usually indicated by
creativity, variation,
distribution of energy, and
conflict
What’s ending in your world?
What’s beginning?
www.competingvalues.com
16
Principle 3: How You Innovate is
What You Innovate
Breakthrough Innovation
Relative Uniqueness for Market Segments
Incremental Innovation
Relative Delivered Price for Comparable Quality
Lean (Reduced TOE)
Double Digit Growth
www.competingvalues.com
17
Don’t They Create Paradoxes?
1.
2.
3.
4.
5.
6.
7.
Should we be focused and programmatic or flexible and
opportunistic? (Reliable incrementalists or risky radicals?)
Should we build our own innovation capabilities or acquire them?
(Organic or inorganic growth?)
Should innovation be pushed from corporate leaders or pulled from
field leaders? (Closer to shareholders or customers?)
Should we set our strategy and then develop the culture and
competency to make innovation happen, or the other way around?
Should the financial portfolio set the innovation development path
or respond to it as a variety of innovations emerge?
Should innovation be a departmental function in the organization or
a distributed responsibility for all operating units?
Should innovation be aligned with the core business or set free to
create the new business?
www.competingvalues.com
18
What About Services and
Solutions?
Services are seldom scalable
www.competingvalues.com
Companies with the most scope
and scale have a predatory
advantage in creating solutions
19
One Size Doesn’t Fit All




Everything in the universe is
both whole and part of a larger
system
Compatibility, fit,
synchronization and timing are
key issues for innovation
Diversity is essential to produce
creative tension, but within the
context of a larger system
Innovation is mostly about
connecting the dots and
crossing boundaries
www.competingvalues.com
20
How Would You Make Innovation
Happen at UM B&F in One Year?








How do they interact with each other?
How do they decide who becomes the leader?
What tools, methods, and processes do they use to
improve the firm?
For what offenses do they fire (sack) people?
Where do we find these people in the firm? Other firms?
What value do they create?
Are they fast or slow?
Are their approaches breakthrough or incremental?
www.competingvalues.com
21
Apathy is the Death of Innovation;
Competing Values the Élan Vital
The Innovation Genome
www.competingvalues.com
22
What are the Key Approaches to
Innovation?
Collaborate
Social Approaches






Knowledge management
Collaborative communities of practice
Search and reapply
Culture and competency development
Collaborating with customers
Open source
Create
Generative Approaches







Control
Technological Approaches







Continuous process improvement
Lean manufacturing
Total quality management
Simulations
Platform innovation
End to end IT systems
Supply chain innovation
www.competingvalues.com
Futuring and scenario planning
New market speculation
Diversified radical experiments
Early technology adaptation
Innovation societies and fellows
Corporate venturing and spin-offs
Greenhouse funds
Compete
Business Approaches







Mergers and acquisitions
Portfolio management
Rapid action problem solving teams
Revenue insight processes
Branding
Market adjacencies
Business solutions
23

Value Propositions: Breakthrough Innovation & Organic
Growth








Be the first to tackle the treacherous areas to create
blockbusters: Autoimmune disease like multiple sclerosis,
rheumatoid arthritis, lupus and AIDS
Challenge standards, convention and dogma (Rituxan) – “The
crowd is usually wrong”
Establish a culture of the “outsiders” on the “inside track”
Spend big on discovery - 50% of sales on R&D, 2x industry
standard (Multiple shots on goal)
Cozy up with top research universities and cherry pick when
necessary (Richard Scheller of Stanford and entire autoimmune
lab from Univ. of Minnesota)
Innovation is not instant perfection, big failure happens
Chase the impossible to develop unimaginable competencies
Look for the unusual resume to increase diversity of thought
From lab to boardroom, challenge authority

www.competingvalues.com
24

Workplace







Stimulating projects
Flexible hours
Free from everyday
constraints
New initiatives
Independent work streams
Diverse workforce
Leaders







Visionary dreamers
Clever
Optimistic
Enthusiastic
Quick on their feet
Expressive
Big-picture thinkers
www.competingvalues.com

Innovation Practices







Futuring and scenario
planning
New market speculation
Innovation societies and
fellows
Diversified radical
experiments
Early technology adaptation
Corporate venturing and
spin-offs
Greenhouse funds
25

Value Propositions: Efficiency & Quality








Refocused after ACC in 1990s (Digital Media, Semiconductor,
Telecommunication Network, and LCD Digital Appliance)
Integrated architecture platforms to minimize cost and maximize
minor variation (Dominate components in a few key industries)
Clearly defined and consistent process for most routine
functions (E-mail, meetings)
Standards maintained by departments (Voluminous checklists)
Derive simple rules from all failures and build replicable
processes (After action review)
“Scientific” processes: Total quality management, continuous
improvement, just in time inventory, lean manufacturing and
flexible platform design
Chief Design Engineer intensive mentorship of high potentials in
the esprit de corps of the “Samsung Way”
End to end technological capability from product design to
manufacturability
www.competingvalues.com
26
Samsung

Workplace







Clear roles and
responsibilities
Stable project management
Logical objectives
Methodical processes
Standards and regulations
Ordered and structured work
Leaders







Pragmatic
Organized and methodical
Scientific or technical
By the book
Problem solver
Objective
Persistent
www.competingvalues.com

Innovation Practices









Continuous process
improvement
Reverse engineering
Benchmarking
Lean manufacturing
Total quality management
Simulations
Platform innovation
End to end IT systems
Supply chain innovation
27
Ask Yourself “What Works; What
Doesn’t When and Where?”



Where does Genetech’s approach to innovation work at
UM B&F? Samsung's? Why?
Where doesn’t Genetech’s approach to innovation work
at UM B&F, but should? Samsung's? Why?
What are the leadership traits required to manage these
competing values in UM B&F?
www.competingvalues.com
28

Value Propositions: Speed & Profits









100 year old business went from 12 to 62B in 4 years (High
quality revenue targets)
Lean conglomerate with large scale businesses in software,
cars, steel, phone services, solar panels, biotech, hotels, wrist
watches and tea (60% of profits to charitable trusts)
Capitalize on undervalued cast-offs (Jaguar and Landrover)
Move quickly on acquisition opportunities (Corus)
Focus the portfolio but allow most businesses to operate as selfdirected units with own P&L
Many businesses and products but only one global brand,
brand, brand
Mid-term revenue focus on opportunity with an eye on
sustainability
Hire the clear thinking, intelligent, and vital; not critics
Free and responsible leadership; accountability to all
stakeholders
www.competingvalues.com
29

Workplace







Competitive
High pressure and impact
Fast moving and high energy
Image enhancing deal making
Quantifiable results
Winners and losers
Leaders







Goal and action oriented
Impatient
Assertive
Driven
Decisive
Challenging
Competitive
www.competingvalues.com

Innovation Practices







Mergers and acquisitions
Portfolio management
Rapid action problem solving
teams
Revenue insight processes
Branding
Market adjacencies
Business solutions
30

Value Propositions: Community & Knowledge










Freedom to encourage, help, and allow other associates to grow in
knowledge, skill, and scope of responsibility
No central innovation function - everyone in the firm is responsible for
making innovation happen
No business unit of more than 50 people
Great ideas emerge over time, as do great innovation teams
Culture is king, create an atmosphere where patient learning is
encouraged
Competencies are developed through coaching and new opportunities
Spend 15% of your time and budget on new ideas, projects and
ventures
Make a little, sell a little, review what works and doesn’t, and revise
The ability to make one's own commitments and keep them
Consultation with other associates before undertaking actions that
could impact the reputation of the company
www.competingvalues.com
31
WL Gore

Workplace







Family atmosphere
Collaborative workplace
Shared values and vision
Integrates personal goals
Informal
Teaching and coaching
Leaders







Sees potential
Builds commitment and trust
Sensitive and caring
Patient listeners
Encourage participation
Respects differences
Empowers people
www.competingvalues.com

Innovation Practices








Knowledge management
Mentoring and coaching
Team building
Collaborative communities of
practice
Search and reapply
Culture and competency
development
Collaborating with customers
Open source
32
Ask Yourself “What Works; What
Doesn’t When and Where?”



Where does Tata’s approach to innovation work at UM
B&F? Gore’s? Why?
Where doesn’t Tata’s approach to innovation work at
UM B&F, but should? Gore’s? Why?
What are the leadership traits required to manage these
competing values in UM B&F?
www.competingvalues.com
33
Are You Saying That A Firm Has One
Conscious Approach to Innovation?
No




But it does play to it’s
strong hand by…
Industry
Department function
Location
www.competingvalues.com
34
Is the Reunion of Opposites
Really Possible?
U.S. looks to hackers to
protect cyber networks
By Lolita C. Baldor, Associated Press (4/20/09)
WASHINGTON — Wanted:
Computer hackers.
Buffeted by millions of digital
scans and attacks each day,
federal authorities are looking
for hackers — not to prosecute
them, but to pay them to
secure the nation's networks.
Well Not All the Time
www.competingvalues.com
35
How Do We Manage these
Positive Tensions?
Social Approaches
•Long term relationships
•Community decides
•Sustainability
•Inclusive
•Evolutionary
Create
Solutions
Collaborate
Generative Approaches
•First adaptor customers
Services and markets
•Customized
offering
Products
•Segment
specific
Expertise
•Diversify
•Channel pull
Customers
•Core customers and markets
•Generic offering
•Widest possible market
•Align
•Corporate push
Control
Technical Approaches
www.competingvalues.com
Platforms
Suppliers
•Limited window of market opportunity
•Markets decide
•Time to market
•Exclusive
•Ballistic
Compete
Business Approaches
36
…And Affected by the
Development of Organizations
Control
Collaborate
Compete
Create
www.competingvalues.com
Where is Your Organization on the growth curve?
37
Principle 4: Forget the 80/20 Rule
and Follow the 20/80 Rule
It’s Easier to Change 20% of the Firm 80% Than 80% of the Firm 20%
Crisis
Outstanding
•Seeks to survive
•Risk of change low
•Reward of change high
•Seeks to grow
•Risk of change low
•Reward of change high
20/80 rule
20/80 rule
Normal
•Seeks to maintain equilibrium
•Risk of change high
•Reward of change low
80/20 rule
The more radical the innovation, the more it needs to start on the fringes
www.competingvalues.com
38
Principle 5: Show, Don’t Tell







Innovation is about what
doesn’t exist yet
Most of our brain is used
to visualize
Seeing is believing
You need to help people
see
Put them in the movie
A day in their life
Proof the concept
www.competingvalues.com
39
Principle 6: The Cavalry Isn’t
Coming
www.competingvalues.com
Wait, Fight or Deviate…Positively
Growth requires personal ownership
40
Principle 7: Remember The
DeGraff Hypothesis
“The amount of innovation a
company produces is
inversely related to the
number of PowerPoint
slides or elaborate
process diagrams it
makes about innovation.”
Only Known Photo of the Hypocrite
www.competingvalues.com
41
Jumpstarting
Innovation
B
Basic Steps to Making
Innovation Happen at UM B&F?
1.
2.
3.
4.
High quality
targets
Deep and diverse
domain expertise
Multiple shots on
goal
Learn from
experience &
experiments
www.competingvalues.com
43
Identify High Quality Targets
Is it
real?
Can we
win?
Is it worth
doing?
www.competingvalues.com
Collaborate
Create
Values
Social
Vision
Generative
Control
Compete
Processes
Technical
Goals
Business
44
Enlist Deep and Diverse Domain
Experts
Teachers
Communicators
Counselors
Listeners
Conflict mediators
Community builders
Planners
Organizers
Analysts
Technicians and scientists
Methodical problem solvers
Professionals
Dreamers and visionaries
Fashion trend setters
Creative actors
Big picture thinkers
Experimenters
Energizers
Competitors
Decision makers
Goal oriented achievers
Sprinters
Political game masters
Deal makers
Think Around the Challenge and
Integrate the Solution
Differentiate


Collaborate
Compete
Create
Control
Control
Create
Compete
Collaborate
Consider the challenge by
thinking around the four
perspectives
Use breakout groups to
divide and conquer
Integrate


Integrate the perspectives
and develop hybrid
solutions
Integrate the breakout
groups if appropriate to
sync it the solutions
www.competingvalues.com
46
Practice Kaleidoscopic Thinking
Are you ready to travel
some new neural-nets
today?







Change your point of view
Listen to your intuition
Draw it
Run thought experiments
Magnify and minify
Reverse your ideas
Go on an expedition
www.competingvalues.com
47
Inhibitors of Creative Thinking
Personal Block







Problem Solving
Blocks
Lack of self-confidence Solution fixedness
A tendency to conform Premature judgment
A need for the
Habit transfer
familiar/habit-bound
Use of poor
thinking
approaches
Emotional “numbness” Lack of disciplined
Saturation
effort
Excessive enthusiasm Poor language skills
Lack of imaginative
Rigidity
control
www.competingvalues.com
Contextual Blocks
Scientific reasoning
provides a panacea
 Resistance to new
ideas
 Isolation
 Negative attitude
toward creative thinking
 Autocratic decision
making
 Experts
 An over-emphasis on
competition or
cooperation

The Creative Edge. William Miller 48
Your Challenge [Here]









What exactly are we doing and
why?
Who’s the boss?
Who’s on the team?
How much time do we have?
How much money do we
have?
What is out of bounds?
What are the deliverables?
How do we keep score?
What happens if we succeed?
Fail?
www.competingvalues.com
49
What’s Working and What’s Not?

What's Working

What's Working

What's NOT Working

What's NOT Working

Potential Improvement Points

Potential Improvement Points

What's Working

What's Working

What's NOT Working

What's NOT Working

Potential Improvement Points

Potential Improvement Points
www.competingvalues.com
50
Take Multiple Shots of Goals
Diverging






Defer judgment
Look for lots of ideas
Accept all ideas
Make yourself “stretch”
Take time to “simmer”
Seek combination - be a
“hitchhiker”
Converging






Be deliberate
Be explicit
Avoid premature closure
Take the risk to look at difficult
issues or “sneaky spots”
Develop a sense of “affirmative
judgment”
Keep your eyes on your
objectives
www.competingvalues.com
Creative Problem Solving. Treffinger, Isaksen, and Dorval 51
Take a Collaborate Point of View
and Think About…

Practices - Culture, competency, and
processes of the organization Mission
and vision statements










Knowledge management
Learning organization
Collaborative communities of practice
Culture development and
transformation
Customer relationship management
Competency development
Team building
Mentoring and coaching
Training
People: Individuals in the organization,
at all levels







Sees potential
Builds commitment and trust
Sensitive and caring
Patient listeners
Encourage participation
Respects differences
Empowers people
www.competingvalues.com

Preferred Environments







Preferred Communication







Family atmosphere
Collaborative workplace
Shared values and vision
Integrates personal goals
Informal
Teaching and coaching
Talk about personal experiences
Tell stories
Express emotions
Put the person at ease
Acknowledge the role of intuition
Recognize important spiritual symbols
Organizational Types








WL Gore
Genentech
McKinsey and Co
Harley Davidson
S.C. Johnson
eBay
The Body Shop
Universities
52
Take a Create Point of View and
Think About…

Practices - Culture, competency, and
processes of the organization Mission
and vision statements











Creativity methods
Strategic forecasting and scenario
planning
Corporate venturing
Spin-offs
Entrepreneuring
Growth and market disruption
strategies
Change and innovation programs
New product development
Radical experiments
Borderless and virtual organizations
People: Individuals in the organization,
at all levels






Visionary dreamers
Clever
Optimistic
Enthusiastic
Quick on their feet
Big-picture thinkers
www.competingvalues.com

Preferred Environments







Preferred Communication







Stimulating projects
Flexible hours
Free from everyday constraints
New initiatives
Independent work streams
Diverse workforce
Be enthusiastic and energetic
Look at the big picture
Draw concepts
Use metaphors
Look at the future
Explore how the pieces fit together
Organizational Types








Google
Apple
Pixar
Virgin
Nokia
Versace
Bio techs
Start ups
53
Take a Compete Point of View
and Think About…

Practices - Culture, competency, and
processes of the organization Mission
and vision statements











Economic value added management
Mergers and acquisitions
Real options analysis
Time to market reduction
Performance management scorecards
Profit insight processes
Pay-for-performance plans
Branding
Sales channel management
Portfolio management
People: Individuals in the organization,
at all levels







Goal and action oriented
Impatient
Assertive
Driven
Decisive
Challenging
Competitive
www.competingvalues.com

Preferred Environments







Preferred Communication






Competitive
High pressure and impact
Fast moving and high energy
Image enhancing deal making
Quantifiable results
Winners and losers
Get to the point and summarize
Be logical and analytical
Critically confront the downside
Show personal ownership
Demonstrate a biased towards action
Organizational Types








Unilever
Microsoft
IBM
Bloomberg
PepsiCo
Goldman Sachs
New York Yankees (alt. Chelsea)
Blue chips
54
Take a Control Point of View and
Think About…

Practices - Culture, competency, and
processes of the organization Mission
and vision statements











Business process improvement
Activity based costing
Benchmarking
Lean manufacturing
Total quality management
Simulations
Contingency planning
Pervasive information systems
Reorganization
Supply chain management
People: Individuals in the organization,
at all levels







Pragmatic
Organized and methodical
Scientific or technical
By the book
Problem solver
Objective
Persistent
www.competingvalues.com

Preferred Environments







Preferred Communication






Clear roles and responsibilities
Stable project management
Logical objectives
Methodical processes
Standards and regulations
Ordered and structured work
Provide details
Follow the rules
Conform to accepted esprit de corps
Provide detailed data
Demonstrate how it works
Organizational Types








Toyota
GE
Shell oil
Airbus
Wal-Mart
Siemens
LG
Medical centers
55
Add WOW to Promising Ideas

Substitute


Combine


New ways to use as is? Other uses if modified?
Eliminate or Minify


New twist? Change meaning, color, motion, sound, odor, form, shape? Other Changes?
What to add? More time? Greater frequency? Stronger? Higher? Longer? Thicker? Extra
value? Plus ingredient? Duplicate? Multiply? Exaggerate?
Put to Other Uses


What else is like this? What other idea does this suggest? Does past offer parallel? What
could I copy? Whom could I emulate?
Modify or Magnify


How about a blend, an alloy, assortment, an ensemble? Combine units? Combine
purposes? Combine appeals? Combine ideas?
Adapt


Who else instead? What else instead? Other ingredient? Other material? Other process?
Other power? Other place? Other approach? Other tone of voice?
What to subtract? Smaller? Condensed? Miniature? Lower? Shorter? Lighter? Omit?
Streamline? Split up? Understate?
Reverse or Rearrange

Transpose positive and negative? How about opposites? Turn it backward? Turn it upside
down? Reverse role? Change shoes? Turn tables? Turn the other cheek? Interchange
components? Other pattern? Other layout? Other sequence? Transpose cause and effect?
Change pace? Change schedule?
www.competingvalues.com
101 Creative Problem Solving Techniques. Higgins 56
Select 3 Winning Ideas and
Improve Them
Criteria for a winning
idea is…
 It provides a solution
to the challenge
 It’s possible
(Feasibility, power,
capability, etc.)
 It’s WOW!
www.competingvalues.com
57
Create a Hybrid Solution
Take the two ideas and
create one hybrid idea
(no bolt-on ideas or
marriages of
convenience)
www.competingvalues.com
Integrate Compete
with Collaborate
Integrate Control
with Create
Integrate Create
with Control
Integrate
Collaborate with
Compete
58
Get Some Quick Wins
Big Pay-Off Small Pay-Off
Easy to Implement
Tough to Implement
Small Wins
Time-Wasters
Big Wins
Special Cases
www.competingvalues.com
59
Proof of Concept

Who, What, Where, Why and How (5W’s + H)






5W’s + H will you work together on these action items?
www.competingvalues.com
60
What Are Some Examples of
Analogies for Solutions?

ASAP







OPI nail polish (Mauve-lous
Memories)
Think University of Phoenix
Reverse Innovation

www.competingvalues.com
Think Kayak
Almost as Good


Think Harley
Aggregate the Aggregators


Think Yum brands
Hidden Tattoos


Think Whole Foods
Smashup

Think Nintendo Wii
Tell Me a Story


Think E-Bay
Old is New

Think Cisco routers
Hot Coach Potatoes


Think Mercedes C-class
Fix-It-For-Me
Cult Communities

Think NIKEiD
Premium Proletariat


Think Match.com
I’m Special


Think GE Medical
61
How to Create Winning Analogy
For Your Solution?
1.
2.
3.
4.
5.
6.
7.
Revisit your short list of what’s moving in the world of your organization at
the greatest speed and magnitude
Think of some organizations that are rapidly growing through various forms
of innovation (Not necessarily in your domain)
Describe what they are doing (Attributes, actions, markets, money,
technology, partnerships, etc.)
Now work up some analogies that fit these descriptions (See examples)
Once you find some that really describe what these organizations are
doing, work backward and apply it to your organization
For example: Match.com applied to real estate might be like creating an
intake of key psychological factors for better speed dating
The key is to get into flow with some volume. Look for analogies that you
can begin to visualize as both viable, and more importantly, unique
www.competingvalues.com
62
Learn from Experiences and
Experiments

Start/Do More

Start/Do More

Stop/Do Less

Stop/Do Less

Stay/Do Nothing

Stay/Do Nothing

Start/Do More

Start/Do More

Stop/Do Less

Stop/Do Less

Stay/Do Nothing

Stay/Do Nothing
www.competingvalues.com
63
Example of Portfolio
Management Bias
Relative risk
Eliminate
Reduce risk
High risk
Low reward
Highest risk
Highest reward
Relative reward
Lowest risk
Low risk
Lowest reward High reward
Increase reward
www.competingvalues.com
Example: The bias of
portfolio gravity
Invest
64
Momentum is Crucial to Success
“Keep Moving Forward”
The Strange But True
Tale of Best Practices
C
Best Practice 1: Creativize It
Creativize
To add value through
creativity to ordinary
business practices
across disciplines, places
and levels
Creativizers
Those who transform the
ordinary into the
extraordinary through
their sense of ownership
and prismatic thinking
Reminds you of Norman Rockwell
www.competingvalues.com
67
Best Practice 2: Create More
Ugly Pots


Art course in pottery
Two sets of grading criteria





Based on aesthetic appeal
Based on the total weight of
the pottery
Well-respected curators
judged
Which criteria produced
more high quality art?
Fail often, early… and out
of sight to succeed sooner
www.competingvalues.com
68
Best Practice 3: Hide Inside
Trojan Horse Projects




www.competingvalues.com
Projects: Create projects that
will provide opportunities for
these innovation practitioners
to learn what practices work
and don’t
People: Create a community
of highly practiced innovators
Place: Create a place for
these innovation practitioners
to work together
Practices: Create new
practices and forums to share
them
69
Best Practice 4: Diversify When
You Don’t Know Your Destination





Innovation is Terra Incognito
Innovation is about arriving at
a place we have never been
before by doing something we
have never done before
What’s going to happen with
the [Your issue here] next
year?
Collecting data about the
future is often an act of
resistance because it stops us
from acting
Launch a diverse array of
ships, send them on different
routes, see what you discover
– build processes last
www.competingvalues.com
70
Best Practice 5: See One, Do
One, Teach One




From the trades to
medical school
It’s easy to see what is
wrong with someone
else’s ideas, it’s hard to
do better
From speaking a
language, learning to
play an instrument …
learning is doing
Apprentice yourself and
coach others
www.competingvalues.com
71
Best Practice 6: Enlist Your
Customers to Grow Your Business

Identify and watch your leading customers


Provide your customers with tools to use


Hang out with your customers. Listen to what
they’re saying and suggesting. They will keep
you pointing in the right direction.
Empower customers to show their stuff


Become an integral part of your customer’s
own creative processes. Provide them with
the tools they need to be innovative and
creative.
Build and nurture customer communities


Observe what customers are doing and
they’re using your products to get things
done. This will be a renewable source of
great ideas.
Create forums where smart contributors can
earn the accolades of their peers. People
love to show how creative they can be.
Let customers engage in peer production

Don’t insist on doing everything yourself.
Instead, let your customers create what you
sell in the future. This is a great business
dynamic.
www.competingvalues.com
Outside Innovation by Patricia Seybold
72
Best Practice 7: Leave Room for
the Stuff You Don’t Know Now
Sometimes what you discover along the way
is more interesting than what you set out to find
www.competingvalues.com
73