Ask a husband what percentage of the household chores he contributes. Write the number down. Now ask the wife what percentage she contributes. Write the number down. Now add the two numbers together. The sum will almost certainly be more than 100%. Now do the same exercise for a project team at the office. It’s a simple question: how much of the value of the project did you contribute? If you sum up all the answers, the total is likely to be greater than 200%. How can this be? Our memories work in funny ways. To manage a team effectively — and to stimulate innovation — you need to praise based on memory rather than reality. Learn more in the video.
I’ve never much agreed with Nicholas Carr, who wrote the famous Harvard Business Review article, “IT Doesn’t Matter” in 2003. His argument was that information is like electricity — everybody can get it and therefore it can’t differentiate one company from another. IT doesn’t matter any more than electricity matters. To me, this is like saying that we all have brains and, therefore, having a brain doesn’t provide any of us competitive advantage. I think many people would ague that it’s what you do with your brain that confers the advantage. Similarly, it’s what you do with information — via the IT function — that can confer important advantages.
While I don’t generally agree with him, I found his interview with Rotman magazine fascinating. (The magazine is published by the Rotman School of Management at Toronto University). I especially liked his insight on crowd-sourcing — it’s a good way to complete tiresome, repetitive tasks — like debugging software — but it almost never leads to innovation. You can read the complete interview by clicking here.
Why do people play video games for hours on end? Why couldn’t accounting software be equally addictive? Well, actually, it could be if we designed accounting software the same way we design video games. There are five key attributes that make a difference. Learn more in the video.
Let’s say that you’ve come up with an innovation and now need to convince your company’s executives that it makes business sense. The first rule: beware of the Finance department. Financial analysts are great with an alphabet soup of classic financial tools: ROI, IRR, NPV, hurdle rates, and so on. Unfortunately, classic tools are good only for classic markets. That is, mature markets that are well understood and more or less predictable. With an innovation, these tools are less than useless — the market doesn’t exist. It’s like trying to measure the path of an electron using Newtonian physics. Newtonian tools are good for classic physics but will do nothing but mislead you in the subatomic space.
So how do you measure the potential impact? Well, you need new analytic tools — and so do your financial analysts. One option (no pun intended) is real options analysis. Traditionally, “options” meant the option to buy or sell something in the future. “Real options” are similar but they give you the option to do something in the future. In other words, we’re trying to put a value on the concept of keeping your options open. A good financial analyst working in an innovative company should know about real options — you can use the video to introduce it to them.
Do you want to be more innovative? A good first step is to discover your blind spots. If you can’t see something, you can’t make it better. But, how do you know if you’re not seeing something? After all, your blind spots are blind. It’s not so hard if you follow the tips in this week’s video — you’ll discover how to identify your blind spots and see the world more fully. You’ll also discover why a diverse organization is essential. Building a diverse organization is not just the right thing to do. It will also stimulate new innovation. Now watch the video: