November 23, 2012

Issue 8 – November 23, 2012

1. Future Federal Government ………………………….…..……....………….. David Paschane

2. 7 Ways to Outsmart Your Brain and Be More Innovative ………..…….…. Steve Shapiro

3. Will Your Strategy Kill Your Company? …………………..……..…..……… Rowan Gibson

4. Asking the Right (innovation) Questions .........................…..………..…. Michel van Hove

5. Hostess’ Twinkie Defense is a Failure .……………………...………..……… Adam Hartung

6. USAA – a study in pervasive innovation ………………….………………. Bryan Mahoney

7. The Best Innovation Strategy is Searching for Needs …..……...........…. Gijs van Wulfen

8. What Innovators Can Learn From Gatorade …………….…..………...…….. Scott Anthony

9. Actually, People Love Change ………………………………………….…….….. Tim Kastelle

10. Collaborative Innovation Replaces Brainstorming ……………..… Juergen H Staeudtner

Your hosts, Braden Kelley, Julie Anixter and Rowan Gibson, are innovation writers, speakers and

strategic advisors to many of the world’s leading companies.

“Our mission is to help you achieve innovation excellence inside your own organization by making

innovation resources, answers, and best practices accessible for the greater good.”

Cover Image credit: environmental energy concept from Bigstock

Future Federal Government

Posted on November 18, 2012 by David Paschane

I guarantee that the U.S. Federal Government will be different in the future. Besides the fight for ideological direction and political power, there

are six trends that will change this landscape. They are systemic challenges that at 8,000 Federal Executives will respond to in the near future–

and their response will change the Government.

1. Budget Reduction. Regardless of the policies or methods employed to downsize the budget, all programs are on notice to reduce spending.

Budgets will be smaller, and offices will have to perform their mission at the levels expected of them by their stakeholders. Leaders will have to

be prudent about how they use contractors, consultants, equipment, and training.

2. Performance Accountability. Since the passing of the Government Performance and Reporting Act of 1993, agencies have sought

streamlined ways to plan, organize, execute, and report performance within and across programs. Now, with the 2010 Modernization Act to

GPRA, 152 changes are in the pipeline and it will affect the information tied to performance analysis and public awareness.

3. Workforce Development. A third of the Federal workforce is eligible to retire. Talent, information, and know-how can walk out the door, and

the existing workforce is in desperate need of a reemergence of performance leadership, where every individual is aware and motivated to

enhance the organizations’ performance–not more bureaucracy by the numbers.

4. Cost Controls. The many costs of doing business are not visible, and yet the total cost of running government offices is driving up the total

operational expenses. Offices need routine ways of examining the policies and behaviors that affect costs in energy, property, transportation,

and outsourcing–as the budgets shrink, the pressure to account for every penny rises.

5. Mobile Productivity. Telework is encouraged in the laws and agency policies, and many government functions require mobility; however,

nobody knows how to keep productivity in workers who are out of sight. The pressure is on to find technological means of increasing

productivity, regardless of where the worker is located, including means of concentration, engagement, computing convenience, and rapid

communications.

6. Localized Innovation. The Federal government is a very large enterprise, with desperate expertise; and yet, we have few means of

normalizing conditions for innovation. The entire workforce is held back by the difficulties of sharing insights, testing enhancements, and

learning from each other and how we redesign our work structures. A discipline for innovation is necessary–very necessary.

The future of the Federal Government is in the hands of a few leaders. As they respond to these systemic challenges, we will see the trajectory

of the bureaucracy–will it become a heavy or light structure–a growth or stagnation of performance capability?

image credit: wittassociates.com

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David Paschane, Ph.D. is the Government Editor of Innovation Excellence. He is an Organizational Architect from the

Washington D.C area. He is an Associate Research Professor at UMBC; a Founder and Volunteer at Military Alumni

Transition Career Headquarters (MATCH) and the Director of Strategic Initiatives at U.S. Department of Veterans Affairs.

7 Ways to Outsmart Your Brain And Be More Innovative

Posted on November 17, 2012 by Stephen Shapiro

You are alive today. You were alive yesterday. You were alive the day before that.

This is good news from a survival perspective. Unfortunately it is bad news from an

innovation perspective.

Your brain is wired to keep you alive.

Your brain makes the assumption that because you were alive yesterday, what

you did previously is safe. Therefore repeating the past is good for survival. As a

result, doing things differently, even if it seems like an improvement, is risky.

Perpetuating past behaviors, from the brain’s reptilian perspective, is the safest

way.

This is why innovation is difficult for most individuals and organizations.

Innovation is about change. It is about doing something different than you did previously. It is about trying something that you have not done

before, and therefore may feel is a danger to your survival.

How does the brain’s survival instinct prevent innovation–and what can you do about it?

Here are seven ways to outsmart your brain:

Challenge No. 1: The brain wants pains solved first. The brain is wired to minimize loss. We want to keep what we already have. Equally, we

are not interested in something new, until we address our pains. The brain seeks preservation over pleasure.

Solution: Recognize that people want their pains solved more than anything else. Be the aspirin. Innovation is not just about creating

something new and different. It should solve a problem that people have. Infomercials are especially effective at demonstrating this.

Challenge No. 2: Expertise is the enemy of innovation. We build neural pathways to known solutions. What we know best (or in some cases

have heard most recently) becomes our default answer. Unfortunately, once we find an answer to a problem, we stop looking for other possible

solutions. As a result, the tried and true wins out and we get more of the same.

Solution: Keep looking. Although this sounds simple, don’t stop with the obvious answers. Keep pushing until you are out of ideas and then still

push forward. Ask “who else has solved a problem like this?” A whitening toothpaste was developed by studying how laundry detergent whitens

clothes. A medical device manufacturer learned how angioplasty balloons expand and contract by studying car airbag deployment.

Challenge No. 3: The brain wants solutions, not problems. In the world of business, we hear the expression, “Don’t bring me problems, bring

me solutions.” From a survival perspective this makes sense. When faced with the possibility of being eaten by a lion, we don’t want to study

our navel. Action is critical. However, in the world of innovation, the “problem” is actually more important.

Solution: Ask better questions. Einstein reputedly said, “If I had an hour to save the world, I would spend 59 minutes defining the problem and

one minute finding solutions.” Instead of asking for broad ideas such as how to increase revenues, first identify the specific growth

opportunities, untapped markets, emerging trends and current roadblocks. Then find solutions to those more focused challenges.

Challenge No. 4: The brain craves commonality. Contrary to conventional wisdom, opposites do not attract. It is safer to be in a tribe of people

who think the same way. Things get done quickly. It feels effortless. But the downside is that it thwarts innovation.

Solution: Work with people who are not like you. Find people with different backgrounds, personality styles, and interests. Appreciate their

contribution to you and your professional efforts. For example, I am someone who is disorganized and despises plans or planning. As a result,

the first person I bring on to my team is a detail-oriented project manager who can make sure ensure that I get everything done.

Challenge No. 5: The brain sees what it believes. The brain uses a pattern matching

technique called “confirmation bias.” In a nutshell, it rejects anything that is inconsistent with

your belief structure. This is why two people can listen to the same political candidate and

hear completely different things. From an innovation perspective, this may have us get

attached to certain ideas, despite evidence proving that they are probably duds.

Solution: Avoid getting wed to your ideas by getting someone to play devil’s advocate. Any

time you think to yourself, “Wow, this is a great idea,” get someone to poke holes in your logic.

Don’t go to the same people for input. Seek out people who you suspect would reject the idea.

Learn from them. Refine your solution based on numerous perspectives, not just your own

biases.

Challenge No. 6: Your brain only sees a fraction of reality. What you focus on expands, to the exclusion of everything else. The brain’s

reticular activating system is designed to filter out 99.99 percent of the stimuli out there. This prevents the brain from being overwhelmed by

information. Unfortunately, as a result, you miss out on opportunities because you cannot even see they are there. When you are a technology

expert, the solution to every problem involves software/hardware. Opportunities are limited to your frame of reference.

Solution: Sometimes you need to purposefully retrain the brain. Attend conferences unrelated to your work. Read magazines from different

industries. This is why I don’t read books on innovation, but instead read about neuroscience, psychology, and sports performance. This helps

me see more of the world and find opportunities in places I wouldn’t have thought to look.

Challenge No. 7: The brain thinks too much: The dorsolateral prefrontal cortex is the judgmental part of the brain. It is analytical and

calculating. This is great for decision-making that requires logic. But it can kill innovation. When athletes choke, they are over thinking and

constrict the neural pathways that allow access to their deeper capabilities.

Solution: Quiet that part of the brain through meditation, yoga, showering or any other relaxing activity. This allows you to gain access to the

creative parts of your brain. Aristotle found his greatest breakthroughs while napping. One company found that they could speed up the

development of new product ideas through meditation first thing in the morning.

The brain is incredibly powerful. And it does its job exceptionally well: perpetuate the species. It does this by ensuring the survival of the

individual and the gene pool. Although this is of course valuable, it does limit our ability to try new things. Perpetuating the past is the surest

way to survive. But for organizations, doing what you did in the past is the fastest path to extinction. By knowing how your brain is wired, you

can choose to both survive and thrive.

image credit: thoughtful image from bigstock & brainleader

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Stephen Shapiro is the author of five books including “Best Practices Are Stupid” and “Personality Poker” (both published by

Penguin). He is also a popular innovation speaker and business advisor.

Will Your Strategy Kill Your Company?

Posted on November 17, 2012 by Rowan Gibson

Many companies once believed – and some of them evidently still do – that

business models were essentially immortal. The prevailing attitude was that

while product portfolios might need to be refreshed every now and again,

successful strategies would remain successful for the rest of time. Shell would

suck oil out of the ground, General Motors would make cars, Xerox would make

copiers, and that’s the way it would always be.

In a world where nothing much changed – or where things changed very slowly –

the assumption was that a company could pretty much do the same thing

forever. Innovation therefore became a calm, unhurried exercise in developing

“new and improved” versions of existing products, funding ongoing technical research and filing industry patents. How many firms thought there

was ever going to be a need to innovate more deeply and more strategically – at the level of the business model itself? Or to fundamentally

rethink and re-earn their company’s right to exist on a year by year basis?

Go back a few decades and the focus was generally on developing increasingly efficient processes for delivering more of the same. But, today,

with the sheer underlying speed of change in the external world, “more of the same” can very quickly lead to strategic obsolescence.

For some companies, it’s a technological discontinuity that causes all the trouble. This is what happened to Wang in word processing, and to

Atari, and later Sega in video games, when the next wave of technology superseded the old. The same fate befell Schwinn, the original leaders

in the U.S. bicycle market, when their business was destroyed by the disruptive advent of the mountain bike. Remember, too, that the

venerated Encyclopedia Britannica was knocked off its proud pedestal almost overnight by something as banal as Microsoft Encarta, when a

simple CD-ROM displaced a shelf-filling set of printed volumes.

“What got you where you are today is seldom what will keep you there.”

For other firms, the disruption might come from a market discontinuity.

Suddenly, they find themselves facing new and very aggressive competitors

who have a more effective business model than they do. Remember Xerox in

the early 80s, for example. The company didn’t even notice the threat from

the Japanese until its earnings dropped 50% in one year alone – 1982. Or it

could just be a sudden shift in consumer tastes. In the U.S., for example,

Krispy Kreme doughnuts were doing just fine until lowcarb diets reshaped the

food industry. That’s how quickly and mercilessly the market can change.

These days, strategies can have a very short shelf life. Their underpinnings are being regularly shaken and they die much more quickly than in

the past. “This company will be going strong 100 and even 500 years from now,” said C. Jay Parkinson, president of U.S. based Anaconda

Mines – just three years before Anaconda was bankrupt.

The bottom-line message here is that linear thinking is useless in a nonlinear world. The things that got your firm where it is today are seldom

going to be the things that will keep it there. The challenge, therefore, is to routinely consider the unthinkable – to regularly rethink everything

about your company and the business you are in, even when things appear to be going well.

Quite frankly, the line between success and failure has never been finer. Hence the imperative to continuously reinvent your success with

radical new product concepts, new ways of doing business, new markets, new capabilities, new customers and new sources of profit. Unless

you are taking deep, strategic innovation very seriously, your company’s days might already be numbered.

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Rowan Gibson is widely recognized as one of the world’s leading experts on enterprise innovation. He is co-author of the

bestseller Innovation to the Core and a much in-demand public speaker around the globe. On Twitter he is @RowanGibson.

Asking the Right (innovation) Questions

Posted on November 18, 2012 by Michel van Hove

Too often when innovation teams get tasked with generating ideas and develop new business

opportunities they cannot wait to start organising workshops and do market research. All this is

valuable but only in due time and after some reflection has taken place. What are we aiming for, do

we understand what the challenge really is and what insights would help us generate more and better

ideas (we believe in both quantity and quality)? These are generic questions every innovation team

should start with asking and use the answers to direct their research prior to idea generation. We call

this process framing the innovation journey and belief it is critical to a successful outcome.

Innovation consultants (us included) often tell client teams that asking “why” is possibly the most

important question to use from their innovation toolkit. In the earlier phase of the challenge the teams

are exploring, challenging and reflecting on findings before turning them into high quality insights.

But for insights to make an impact and stimulate people to generate breakthrough ideas something

more is needed than only interesting stories and nice pictures. When the innovation team discovers great insights they will immediately start to

generate fragments of ideas themselves. It cannot be helped, people simply have an innate need to create and ideas will undoubtedly emerge.

Collecting these fragments can be of great value as ideas but also to start formulating questions for the ideation exercise. These questions can

help the group explore avenues of thought without giving them the answer. It provides a general direction, topics to think about, to consider but

not to be prescriptive. The aim is for the group to explore, diverge and in that process generate as many ideas as possible. The fact that these

ideas will be grounded in great insights simply helps improve the quality as well as quantity. Innovation can be a more efficient process when

we believe that great ideas need to be backed up by great insights.

Does it apply elsewhere? Along all stages in the innovation process, whether at the front end (insights, ideas) or the back end (business

models, commercialisation) asking the right questions at the right moment is key to achieving great results. When ideas are selected and we

focus on generating options for business models three areas of questioning are critical:

1) Do they (customers) want it (our product or service),

2) Can we provide it and

3) Can we make a profit? These questions are the basis for validating our assumptions and deciding whether it makes sense to commercialise

our idea in the end.

Can anyone do this? In our experience with clients the different phases in the innovation process require different skill sets especially when we

switch from diverging (exploration, generation) to converging (selection, elaboration). But in both situations there is a common skill that is

valuable and the best way to describe it is the ability to take on the role of “investigative reporter”. When we read well researched articles we

are triggered to think more clearly and form our own perspectives and this is equally true for insights to be used in ideation. The ability to

question, challenge, explore and synthesise is as important in journalism as it is in innovation. Although some people are better at this than

others the basics can be learned and applied throughout the innovation process by most people.

What does it take? We advocate teams practice these skills, learn on the job and put in the hours. To start we use simple exercises such as

reading well researched articles and ask teams to identify insights in multiple categories. This skill can be used when they themselves interview

others and identify insights related to their innovation challenge.

Organising a workshop for people to come together and using trends to stimulate their thinking is easy but often leads to poor results and

incremental innovation at best. Innovation projects are meant to be exhilarating, they are after all the lifeblood for future business success but

are only taken seriously if the results are equally exciting. For that to happen asking the right questions at every stage of the innovation process

is critical.

image credit: ire.org

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Michel van Hove is a Partner at Strategos. Based in Amsterdam, he leads programs that help clients identify growth

opportunities and build innovation capability. His experience includes strategy and business development, managing

client relations and leading teams through innovation change programs. Since joining the firm in 2004 he has led

strategic innovation initiatives across a wide range of sectors including energy, telecommunications, consumer

electronics, and food and beverage.

Hostess’ Twinkie Defense Is a Failure

Posted on November 19, 2012 by Adam Hartung

Hostess Brands filed for liquidation this week. Management blamed its workforce

for the failure. That is straightforward scapegoating.

In 1978 Dan White killed San Francisco’s mayor George Moscone and city supervisor

Harvey Milk. The press labeled his defense the “Twinkie Defense” because he

claimed eating sugary junk food – like Twinkies – caused diminished capacity.

Amazingly the jury bought it, and convicted him of manslaughter instead of murder

saying he really wasn’t responsible for his own actions. An outraged city rioted.

Nobody is rioting, but management’s claim that unions caused Hostess failure is just

as outrageous.

Founded in 1930 as Interstate Bakeries Co. (IBC) the company did fine for years. But changing consumer tastes, including nutr ition desires,

changed how much Wonder Bread, Twinkies, HoHos and Honey Buns people would buy — and most especially affected the price – which

was wholly unable to keep up with inflation. This trend was clear in the early 1980s, as prices were stagnant and margins kept declining due to

higher costs for grain and petroleum to fuel the country’s largest truck fleet delivering daily baked goods to grocers.

IBC kept focusing on operating improvements and better fleet optimization to control rising costs, but the company was unwilling to do anything

about the product line. To keep funding lower margins the company added debt, piling on $450M by 2004 when forced to file bankruptcy due

to its inability to pay bills. For 5 years financial engineers from consultancies and investment banks worked to find a way out of bankruptcy, and

settled on adding even MORE debt, so that – perversely – in 2009 the renamed Hostess had $670M of debt – at least 2/3 the total asset value!

Since then, still trying to sell the same products, margins continued declining. Hostess lost a combined $250M over the last 3 years.

The obvious problem is leadership kept trying to sell the same products, using roughly the same business model, long, long, long after the

products had become irrelevant. “Demand was never an issue” a company spokesman said. Yes, people bought Twinkies but NOT at a price

which would cover costs (including debt service) and return a profit.

In a last, desperate effort to keep the outdated model alive management decided the answer was another bankruptcy filing, and to take

draconian cuts to wages and benefits. This is tanatamount to management saying to those who sell wheat they expect to buy flour at 2/3 the

market price – or to petroleum companies they expect to buy gasoline for $2.25/gallon. Labor, like other suppliers, has a “market rate.” That

management was unable to run a company which could pay the market rate for its labor is not the fault of the union.

By constantly trying to defend and extend its old business, leadership at Hostess

killed the company. But not realizing changing trends in foods made their products

irrelevant – if not obsolete – and not changing Hostess leaders allowed margins to

disintegrate. Rather than developing new products which would be more

marketable, priced for higher margin and provide growth that covered all costs

Hostess leadership kept trying to financial engineer a solution to make their horse

and buggy competitive with automobiles.

And when they failed, management decided to scapegoat someone else. Maybe

eating too many Twinkies made them do it. It’s a Wonder the Ding Dongs running the company kept this Honey Bun alive by convincing HoHos

to loan it money! Blaming the unions is simply an inability of management to take responsibility for a complete failure to understand the

marketplace, trends and the absolute requirement for new products.

We see this Twinkie Defense of businesses everywhere. Sears has 23 consecutive quarters of declining same-store sales – but leadership

blames everyone but themselves for not recognizing the shifting retail market and adjusting effectively. McDonald’s returns to declining sales –

a situation they were in 9 years ago – as the long-term trend to healthier eating in more stylish locations progresses; but the blame is not on

management for missing the trend while constantly working to defend and extend the old business with actions like taking a sl ice of cheese off

the 99cent burger. Tribune completey misses the shift to on-line news as it tries to defend & extend its print business, but leadership, before

and afater Mr. Zell invested, refuses to say they simply missed the trend and let competitors make Tribune obsolete and unable to cover costs.

Businesses can adapt to trends. It is possible to stop the never-ending chase for lower costs and better efficiency and instead invest in new

products that meet emerging needs at higher margins. Like the famous turnarounds at IBM and Apple, it is possible for leadership to change

the company.

But for too many leadership teams, it’s a lot easier to blame it on the Twinkies. Unfortunately, when that happens everyone loses.

image credit: hostess & dallasnews

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Adam Hartung, author of Create Marketplace Disruption, is a Faculty and Board member of the Lake Forest Graduate School

of Management, Managing Partner of Spark Partners, and writes for Forbes and the Journal for Innovation Science.

.

USAA – a study in pervasive innovation

Posted on November 16, 2012 by Bryan Mahoney

In USAA’s world, innovation is conducted with one goal in mind: benefit the

customer. In this member-based insurance and banking organization, no idea is

a bad idea – there’s a structure in place that makes an innovator out of each and

every employee, and their efforts yield 95% participation.

It results in a company that looks and behaves like no other auto insurer – or

bank, or car dealer, or home insurer …

Last week, USAA flew bloggers from the financial service, military and innovation

spaces to take a peek under the hood of its innovation program. We saw the new innovations that may transform the way insurance companies

and banks do business, in the same way USAA pioneered check depositing through photos taken with a smartphone.

Here, an Open Innovation Lab provides the headquarters for engineers to try the wild ideas that may or may not get them closer to the end

game of ultimate customer service. They wheel out a workerbot – a Skype-equipped laptop on a column attached to a Roomba controlled by

the person calling in on the other end. It’s a prototype, naturally, but it’s this type of idea that is given flesh by the innovation team.

It’s this kind of thing that surprises you most in strolling the company’s innovation space. Innovation is everywhere, and ideas can spark new

insurance products or new tools to keep home inspectors safe.

USAA by the numbers

8,000

ideas last year

95%

Participation Rate

247

patents in the last year

Mick Simonelli, the Enterprise Innovation Executive Leader at USAA, says ideas are vetted with an attitude of “fail fast, fail cheaply.”

His program approaches innovation in one of three ways – an open employee engagement program, continuous (incremental) innovation, and

revolutionary, where ideas may have a higher risk of failure and not necessarily ROI-based, or even may run contrary to the business

leadership’s desires. That doesn’t stop them from pursuing the ideas, because challenging convention is the name of USAA’s innovation game.

Called ICE, Innovation Community for the Enterprise has a presence throughout USAA’s sprawling campus in San Antonio. In its customer

service center, ICE posters featured photos of employees in the department who have won innovation recent Challenges.

In the Innovation Lab, R&D brings those ideas to life. They demonstrated a prototype app that scans your driver’s license bar code to get your

information and begin an application for a checking account. A telescoping pole with a camera on the end allows adjustors a peek at your roof

without ever leaving the ground. And an iPad app allows members to re-create the scene of an accident using cars they animate with their own

voice-over.

The mission of the Innovation Lab is to provide all employees a way to realize their ideas. The VIP – Volunteer Innovation Program – matches

resources to individual employees to help develop their ideas, no matter where they work.

A key theme we heard over the two days was Leadership – strong investment from the top of the organization (in resources and in mission)

helps fuel USAA’s innovation effort. It is directly tied to everyone’s work – teams working on new projects are often made of different

departments or disciplines, helping eliminate or prevent silos from occurring.

image credit: USAA.com (USAA campus in San Antonio, Texas)

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Bryan Mahoney is the business writer and content editor at Imaginatik, an innovation management consultancy and software

company based in Boston.

The Best Innovation Strategy is Searching for Needs

Posted on November 17, 2012 by Gijs van Wulfen

Booz & Company’s annual global study of R&D spending reveals that successful

innovators bring clarity to the early stage of innovation. It’s when companies generate ideas

and decide which ones to develop.

Just 43 percent of participants said they were highly effective in generating new ideas. And

only 36 percent felt the same way about converting ideas to development projects.

Altogether, only a quarter of all companies indicated they were highly effective at the

front end of innovation. Which is a shocking conclusion.

There are three fundamental innovation strategies. You can categorize companies as Need Seekers, Market Readers, or Technology Drivers.

Booz & Company describes them as follows:

1. Need Seekers, such as Apple and Procter & Gamble, make a point of engaging customers directly to generate new ideas. They develop new

products and services based on superior end-user understanding.

2. Market Readers, such as Hyundai and Caterpillar, use a variety of means to generate ideas by closely monitoring their markets, customers,

and competitors, focusing largely on creating value through incremental innovations.

3. Technology Drivers, such as Google and Bosch, depend heavily on their internal technological capabilities to develop new products and

services.

The Booz & Company’s study confirms that following a Need Seekers strategy offers the greatest potential for superior performance in the long

term. Fifty percent of respondents who defined their companies as Need Seekers said their companies were effective at both the ideation and

conversion stages of innovation compared with just 12 percent of Market Readers and 20 percent of Technology Drivers. These are the same

companies, by and large, that consistently outperform financially.

So need seeking is essential, because a good innovation is a simple solution to a relevant customer need.

But what does a need look like? I like to inspire you with 10 relevant needs and innovative new products or services solving them.

Need & Problem Solution

Consultant: I need new assignments. How do I expand my business network in an efficient way? LinkedIn

Music lovers: I love to listen to music (for free) but I hate to be a pirate downloading it illegally. Spotify

Consumer cleaning: I sick and tired of a bad performing vacuum cleaner Dyson cyclone vacuum cleaner

Consumer: Is this bed clean and free of bugs I can hardly see? The Bed Bug Detective

Snow boarder: I like to go down hill fast but I am afraid for nasty accidents. The Katal Landing Pad

Consumer painting: If there is one thing that really annoys me, it’s cleaning used brushers and rollers. Dulux PaintPod

Green consumer: I hate spilling water and money flushing a toilet. Brondell Perfect Flush

3rd world: due to flooding we lack clean drinking water. Filtrix Filterpen

Full time mother: Now the kids are getting bigger, I like to re-enter the workforce, but who is waiting for me

out there?

Work4Women

Green consumer: I love to celebrate Christmas with a real tree, but don’t like destroying nature. Lease a living Christmas tree

As a good customer understanding is essential, how do you discover relevant unmet needs? And how do you incorporate need seeking in your

idea generation process?

A example of an innovation process incorporating the discovery of user needs is the FORTH innovation method. Step two in this structured

expedition is called ‘Observe and Learn’. It focuses on finding concrete customer needs, using ‘tools’ like personal visits, focus groups, web

searching social media and crowd sourcing techniques. You can download the innovation map of the FORTH method for free.

image credit: deskarati.com

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Gijs van Wulfen leads ideation processes and is the founder of the FORTH innovation method. He is the author of Creating

Innovative Products & Services, published by Gower.

.

What Innovators Can Learn From Gatorade

Posted on November 19, 2012 by Scott Anthony

Gatorade seems like a quintessentially American product. The sports drink was

developed in research labs at the University of Florida during the 1960s to

quickly rehydrate players on the school’s football team, the Gators.

But the idea for Gatorade isn’t American at all. As Vijay Govindarajan and Chris

Trimble of Dartmouth College’s Tuck School of Business explain at the opening

of their latest book, Reverse Innovation: Create Far from Home, Win

Everywhere, the drink’s origins can be traced to Bangladesh, where for

centuries practitioners of ayurvedic medicine have used liquid concoctions of carbohydrates, sugar, and salt to quickly hydrate patients. U.S.

doctors who traveled to Bangladesh during cholera outbreaks in the early 1960s “discovered” this remedy and wrote about its efficacy. And a

doctor at the University of Florida read their report and realized that it could also work for dehydrated football players.

Gatorade is an example of reverse innovation, an increasingly necessary pattern in the corporate innovation playbook in which product ideas

start in emerging markets and flow “uphill” to more established markets. Govindarajan (who, in full disclosure, is a friend of my family as well as

an Innosight fellow) and his longtime collaborator Trimble are the leading academic experts on this pattern, having written a seminal article on

the subject for Harvard Business Review (with General Electric Company CEO Jeffrey Immelt) in 2009 before collaborating on this book.

The authors explain that the leaders of global companies typically move through five levels of thinking when considering emerging markets.

Level One leaders are in simple denial: They argue that the new market doesn’t matter. Level Two thinkers assume they can skim the cream

from the market by targeting the wealthiest customers, while they wait for it to develop and act more like their home markets. At Level Three,

companies follow a “glocalization” strategy, in which they develop local versions of global products. Reverse innovation begins to kick in at

Level Four, as companies see that the unique needs of emerging markets require them to design new products from scratch. Finally, at Level

Five, companies recognize the opportunity inherent in reversing the flow of innovation by using products developed in an emerging economy to

create organic growth in mature markets.

To help companies get to Level Five, the authors offer a “Reverse Innovation Playbook,” which describes in plain language practical concepts

such as clean-slate innovation, local growth teams, market-back approaches, visible CEO actions, and separate scorecards for reverse

innovation initiatives. Some parts of the playbook are more developed than others (for instance, the guidance on selecting members for local

growth teams is a bit thin), but practitioners will likely gobble up the discussion guides, templates, “how-to” tips, and chapter summaries that

have become familiar features of the coauthors’ books.

Govindarajan and Trimble portray reverse innovation in action in the second half of the book, which consists of chapter-length case studies

featuring companies such as Procter & Gamble, Pepsi, and General Electric. Most of these examples have not been widely documented. The

stories, for instance, of how Deere & Company developed a winning tractor in India and how Harman International Industries created a cost-

effective in-dash infotainment system that delivers “functionality similar to Harman’s high-end products at half the price and one-third the cost”

for India and China are particularly compelling.

I have a few quibbles with the book. The second chapter is a speed bump; its discussion of the five “need gaps” in emerging markets is

positioned at too high a level to be useful, and it offers dated and recycled examples. The quality of the chapter-length case studies varies;

some of the latter ones (particularly the study of General Electric, where Govindarajan served as the chief innovation consultant for two years)

pack more of a punch than earlier ones. More broadly, although the case studies all describe interesting innovations in emerging markets, the

degree to which some have affected established markets is less clear. The cases also notably lack geographic diversity — most come from

India.

Finally, many elements from the playbook are consistent with general innovation practices, raising questions about the degree to which reverse

innovation is a distinct category of innovation. (To the authors’ credit, they note repeatedly that reverse innovation is a “next practice” that

requires further study, and Appendix B raises a host of interesting research questions.) Quibbles aside, Reverse Innovation is still the first

innovation book of 2012 that I widely recommend to clients and colleagues. It is an important contribution to the literature on this topic, featuring

powerful stories and practical guidance that will connect with strategists, academics, corporate leaders, and practitioners.

image credit: bloguin.com

This post was published by Booz & Company Inc. Copyright © 2012. All rights reserved.

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Scott D. Anthony is managing director, Asia-Pacific, of Innosight, an innovation consulting firm, and author of The Little

Black Book of Innovation: How It Works, How to Do It (Harvard Business Review Press, 2012).

Actually, People Love Change

Posted on November 19, 2012 by Tim Kastelle

“People resist change.” I heard this about 10 times at a workshop recently where I

gave a keynote. After about the fifth time, it got me thinking. When I went up to give my

talk, I asked people to raise their hands in response to these questions:

Who has moved away from the town or city that you were born in? (almost

everyone) Who has moved to a different country? (about half)

Who has gotten married? (almost everyone)

Who is a parent? (more than 3/4)

Who has moved into a job that is different from the first one you took after you finished higher education? (everyone except the

handful of PhD students who have just finished their higher education).

Who didn’t raise their hand at least once? (no one)

So, why do we say that people hate change?

It turns out that people don’t hate change at all. In many cases we actively seek out change. We move to a new city or country, we get married,

we have children, we take a new job. These aren’t just changes – these are massive changes. And we often seek them out.

People don’t resist change. At least, they don’t when they expect the change to make their lives better.

The kind of change that people resist is the kind that makes them worse off. Like letting 10% of your staff go, and expecting the rest to do the

same amount of work with far fewer people and resources. That’s not good change, nor is it inspiring.

Sometimes in a crisis you do have to make that kind of change – it’s the only way for your organisation to survive.

But most of the time, people will embrace change – they just need to see what’s in it for them.

If you’re trying to change things, here are some tips:

Solve a real problem. If you meet a genuine need, you don’t often find resistance to change. Well, you will, from the competitors who

lose out, but that’s different. This is another kind of change that people love. When the polio vaccine was developed, people lined up

to get it – even though getting a shot is no fun at all. It solved a real need.

Turn up the purpose. Inside an organisation, change is often resisted because it is not clear how the new way of doing things will

make things better. This is especially likely to happen when the organisation does not have a shared purpose

Here is Nilofer Merchant on the importance of vision:

“I see executives regularly saying that they want to “transform the business” or “win the market”,

but they can’t point out an end destination. And when I ask, I usually get that, “just leave me alone”

look. But here’s the deal. “Transform the business” could mean just about anything, especially to the

people who weren’t in the core room where the discussion and debate happened. It leaves too much

interpretation up for grabs. It is fuzzy. And fuzzy doesn’t help. Fuzzy means no one can help you do

it fully because they need to keep checking in. Fuzzy doesn’t turn on the spark of creativity to

generate ideas on how I can help you. Fuzzy creates a dependence, rather than allowing

interdependence and action by everyone.”

Her solution? Articulate a clear vision.

Connect. You can’t meet genuine needs if you don’t understand the people that will be affected by the change. Your best strategy is

to connect with them, and build that understanding.

But if you’re finding that people are resisting the change that you’re proposing, that’s a very strong sign that you don’t understand what they

need, and you haven’t articulated a clear vision of the future.

I’m not trying to oversimplify this. Innovation is hard – if it weren’t, everyone would do it. Change is hard – if it weren’t everyone would adapt

easily.

Deep in their hearts, people love change. That’s why we actively seek it out when we want to make our lives better. If people are resisting your

change, you’re not meeting their needs.

You should change that – it will make your life better.

image credit: name is change image from bigstock

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Tim Kastelle is a Lecturer in Innovation Management in the University of Queensland Business School. He blogs about

innovation at the Innovation Leadership Network.

Collaborative Innovation replaces Brainstorming

Posted on November 21, 2012 by Juergen H Staeudtner

The term brainstorming was coined over 70 years ago. Its use has been

disproved for 50 years now. It is time to apply techniques which really enhance

creativity like collaborative innovation.

Alex Osborn described the technique of brainstorming at BBDO in his book

“How to Think Up”, released 1942 (the “O” stands for Osborn). However, there

had been plenty of evidence in the past 50 years proving the technique has a

negative impact. Donald Taylor, Paul Berry and Clifford Block wrote about its

benefits in 1958 and raised the following question: Does Group Participation

when using Brainstorming facilitate or inhibit Creative Thinking? Their results consolidated and published by Jochen Paulus in the

journal “Bild der Wissenschaft” are as below:

The candidates can’t do any better in groups since they hinder each other. Usually they have to wait

until anyone else has finished speaking – and this inhibits creativity.

The explanation for this characteristic is given by Wolfgang Stroebe, professor of psychology at

the University of Utrecht. (…) He attributes the inhibition to malfunctions of participants’ memory:

To get input for new ideas the brain has to reallocate information out of the long-term memory, and

it has to keep them present. Both processes suffer from waiting when the conventional

brainstorming technique is conducted.

Admittedly, it is significant important for successful ideas to draw on others’ thoughts. The internet lists new methods and tools to generate

ideas, named ideation as part of “Collaborative Innovation”

With appropriate software support provided by the worldwide leading suppliers of innovation software we can facilitate two very important

features of target-oriented creativity in companies:

1. Participants are able to pass their ideas at any time – provided that they have a mobile phone. Ideas typically spring up in moments we do

ordinary activities, for instance when having a shower.

2. Moreover, participants are able to see what ideas others have. This is essential. Only a few can evolve seminal ideas out of their own mind –

ideas are based on each other.

Summarized: do not book any brainstorming workshops to create ideas unless the initiators are professionals in brainstorming. There are

enough other opportunities out there. Collaborative innovation based on innovation management software is one of them.

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Juergen H. Staeudtner is owner of Cridon, a consultancy and agency for innovation. He has held various positions in

management consulting and in line organizations since 1993. He holds a masters degree in mechanical engineering, business

administration and fine arts.

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