Strategy. Innovation. Brand.

innovation

Innovation and Bananas

Start from the top.

Start from the top.

We’ve all heard the admonition, “If it ain’t broke don’t fix it.” We often take it at face value – if something is working, don’t make changes. On the other hand, we usually roll our eyes when a colleague justifies a process by saying, “Well, we’ve always done it that way.”

So which is it? Should you accept a process simply because it’s traditional? Should you assume that it doesn’t need attention? If your business processes are working reasonably well, should you never review them? Should you never seek to improve a process that’s fulfilling its basic objective? Is it OK to accept that we’ve always done it that way?

When I think about these questions, I think about bananas. I’ve always peeled bananas from the stem. It works reasonably well most of the time. But occasionally the stem breaks off awkwardly and mashes the end of the banana. I’ve also noticed recently that snapping the stem can aggravate the arthritis in my thumbs. But, hey – it’s not a big deal. I’ve always done it that way. Why would I change something that’s not broken?

Then I learned that monkeys peel a banana from the opposite end. This is actually the top since bananas grow “upside down”. You simply pinch the top and the peel separates; then you pull it back. It’s simple, easy to do, essentially foolproof, and it doesn’t hurt arthritic thumbs. (Here’s an illustrated guide).

Now I peel bananas from the top rather than from the bottom. Each time I do, I think about innovation. It’s a simple thought – I should ask more questions about how I do things. Why do we things the way we do? It’s a simple process – we just observe and question. It’s so simple, in fact, that we can learn it from monkeys.

How Long Does It Take (To Have A Good Idea)?

Developing a slow hunch.

Developing a slow hunch.

Friends often ask me how long it takes to write one of my web articles. I can frame the question narrowly or broadly. In the narrow frame, the answer might be 90 minutes or so. In the broad frame, it might be 30 years or so. Talk about a slow hunch.

I’ll illustrate with my most recent article: Hate, Happiness, Imagination. As with many things – especially innovations – the article is a mashup of several different sources and concepts. Let’s track them in chronological order.

The first idea came to me through Graham Greene’s brilliant novel, The Power and the Glory. The novel includes a lovely quote: “Hate is the failure of imagination”. Greene wrote the novel in 1940, so the idea is now at least 75 years old (or perhaps older since Greene seems to echo previous authors).

I read the novel when Suellen and I lived in Guanajuato, Mexico in 1980. The quote about hate and imagination struck me and has stuck with me ever since. So, I’ve been gestating the idea for 35 years. I would occasionally mention it to friends but, otherwise, I didn’t do much with it.

In 2005, David Foster Wallace gave his famous commencement speech at Kenyon College. He stressed that, all too often, we fail to imagine what life is like for other people. If we did use our imagination more fully, we would empathize more, and our lives would be richer and fuller. First, we have to recognize that we can make a choice — that we don’t have to operate on our egocentric default setting. Second, we actually have to make the choice.

I didn’t know about Wallace’s speech until I started teaching critical thinking. As I looked for sources, I came across a video of the (abridged) speech and used it several times in my class. I first stumbled across it in 2012.

I didn’t do much with the Kenyon College speech until a few weeks ago. Frankly, I had forgotten about it. Then one of my students discovered it and asked me to show it to the class. That led to a very healthy discussion during which I connected what Wallace said to what Greene wrote.

Bingo! I made the connection between the two ideas. Why did it take me so long? Probably because I was just thinking about it. Thinking is fine but I don’t think that merely thinking creates many new ideas. The give-and-take of the class discussion stimulated me to make new connections. The diversity of opinions helped me open up new connections rather than merely deepening old connections.

Still, I didn’t have a complete thought. Then Suellen read me a paragraph from a review of the new biography of Saul Bellow. The review mentioned Bellow’s belief that imagination is “eternal naïveté”. When I realized what he meant by that, it dawned on me that it completed the thought. Greene connected to Wallace connected to Bellow.

What can we learn from this? First, this little story illustrates Steven Johnson’s idea of the “slow hunch”. Many good ideas – and most innovations – result from mashing up existing ideas. Unfortunately, we don’t get those ideas simultaneously. We may get one in 1980, another in 2012, and another last month. The trick is to remember the first one long enough to couple it with the second one. (Writing a blog helps).

The other point is that the pure act of thinking is (often) not enough. We need to kick ideas around with other people. Diversity counts. I’m lucky that I can kick ideas around with my students. And with Suellen. If not for them, I wouldn’t be nearly as interesting as I am.

So, how long does it take me to have a good idea? About 35 years.

 

Innovation Assimilation

Next?

Next?

In 1983, when I was a product manager at NBI, we were second only to Wang in the word processing and office automation market. Then along came the personal computer and disrupted Wang, NBI, CPT and every other vendor of dedicated word processing equipment.

I’ve written about this previously as an example of disruptive innovation. But I could also describe it as assimilative innovation. NBI’s products did one thing – word processing — and did it very well. The PC, on the other hand, was multifunctional. It could do many things, including word processing (although not as well as NBI). The multifunction device assimilated and displaced the single function device.

We’ve seen many examples of assimilative innovation. When I bicycled across America, I bought a near-top-of-the-line digital camera to record my adventures. It took great pictures. It still takes great pictures. But I hardly ever use it. My smartphone does a lot of things, including taking great pictures. Though my smartphone’s pictures are not as good as my camera’s, they’re good enough. Additionally, the smartphone is a lot more convenient.

Years ago, the automotive industry produced an odd example of innovation assimilation. American cars had a big hole in the dashboard (fascia) where you could slot in a radio and cassette player. You were supposed to buy the audio equipment from the car manufacturer but consumers quickly figured out that they could get it cheaper from after-market vendors.

So, did the auto manufacturers lower their prices? No way, Instead, they re-designed their dashboards so that the audio equipment came in several pieces that an after-market vendor couldn’t easily mimic. In other words, the manufacturers tired to assimilate the competition.

In this case, it didn’t work. The after-market vendors sued, claiming illegal restraint of trade. The courts agreed and ordered the manufacturers to go back to the big hole in the dashboard. I suspect this was a precedent when Nestlé sued to stop third-party vendors from selling coffee capsules for the popular Nespresso coffee maker. Nestlé lost. The courts ruled that Nestlé had created a platform that allowed for permisionless innovation.

What will be assimilated next? I suspect it’s going to be fitness bands. I wear the Jawbone band on my wrist to keep track of my activity and calories. It’s pretty good and seems to compete well with three or four other fitness bands on the market. The new Apple Watch, however, appears to have similar (or even better) functionality built into it. The Apple Watch is, of course, multi-functional. If history is any guide, the multi-functional and convenient device will displace the single purpose device, even if it doesn’t offer better functionality.

What’s the moral? When you buy a single function device, be aware that it’s likely to be assimilated into a multi-function device in the future. That’s not a bad thing as long as you’re aware of the risk.

Are Green Companies More Innovative?

Mashing up green and innovation.

Mashing up green and innovation.

By now, you probably know that I like to mash things up in the pursuit of innovation. Mashup thinking is also a good way to do research and discover interesting correlations.

With that thought in mind, I decided to mash up Boston Consulting Group’s  compilation of the world’s most innovative companies with Interbrand’s list of the Best Global Green Brands. Both studies identify 50 companies in rank order. Both tables are compiled annually; I used the 2013 list.

I first merged the lists and found that 74 unique companies occupy the 100 total slots. I divided these companies into three lists. Here’s how they break down:

  • 26 companies – the “greenovators” — appeared on both lists; that’s 35.1% of the 74 unique companies. (These companies are listed in alphabetical order below).
  • 24 companies (32.4%) appear on the innovation list but not the green list.
  • 24 companies (32.4%) appear on the green list but not the innovation list.

The degree of overlap increases as you go up the scale. Looking at the top ten companies on each list reveals a much higher degree of correlation than is found throughout the rest of the list. On the innovation list, eight of the top ten companies also appear on the green list (not necessarily in the top ten). Similarly, on the green list, seven of the top ten companies also appear on the innovation list.

So, there’s a high degree of correlation between being green and being innovative. There are at least four plausible explanations here:

  • Innovative companies are forward thinking and, thus, also interested in being green.
  • Green companies need to innovate in a number of ways to reduce their environmental footprint. The innovation spills into other areas as well.
  • The two lists are actually measuring the same thing.
  • Some third factor is causing many companies to be both green and innovative.

We clearly don’t have enough evidence to reach a conclusion as to cause-and-effect. However, the second hypothesis seems the most logical to me. To be green, a company needs to change its business processes. In other words, it needs to innovate. It seems logical that stimulating innovation in one area of a business would have ripple effects on other areas.

Additional findings are also intriguing:

Car companies dominate the greenovator group – of the 26 companies that appear on both lists, nine are car manufacturers (34.6%).  It’s the single largest industrial segment in the list. Why would car companies lead the way? It could be that green is a good marketing tool. It could be that car companies learned their lesson in the 2008 meltdown. It could be that government mandates for higher gas mileage lead to green innovation.

Some non-green companies disappoint me – three of my favorite companies are Amazon, Apple, and Google. Only Apple makes the greenovator list. Similarly, UPS makes the green list but FedEx doesn’t. Why wouldn’t these companies want to be seen as green? That’s disappointing.

These are great brands – I recognize all of the 74 unique companies. Indeed, I’m fairly familiar with most of them. These are valuable brands and I’m sure that being seen as leader in innovation or green or both only burnishes their reputation. In fact, I think my next mashup may be a three-way: brand value mashed up with innovation mashed up with green.

In the meantime, if you can help me sort out whether green causes innovation or vice-versa, I’m all ears.

Greenovators: Apple, BMW, Cisco, Coca-Cola, Daimler/Mercedes, Dell, Ford, GE, Honda, HP, Hyundai, IBM, Intel, KIA, Microsoft, Nestlé, Nike, Nissan, Nokia, Philips, Samsung, Shell, Siemens, Sony, Toyota, VW

Innovative, Not Green: Amazon, Audi, BASF, Bayer, Boeing, BP, Dow, Exxon Mobil, Facebook, Fast Retailing, Fiat, GM, Google, Lenovo, LG Electronics, P&G, Renault, Softbank, Target, Tencent, Tesla, Unilever, Virgin, Wal-Mart.

Green, Not Innovative: 3M, Adidas, Allianz, Avon, AXA, Canon, Caterpillar, Citi, Colgate, Danone, H&M, IKEA, J&J, Kelloggs, L’Oreal, McDonald’s, Panasonic, Pepsi, Santander, SAP, Starbucks, UPS, Xerox, Zara.

On-Demand Innovation?

Unless you turn the innovation engine off.

Unless you turn the innovation engine off.

It’s not easy to innovate. Many companies make it even harder on themselves by trying to turn the innovation engine on and off. Turn it on when a crisis erupts. Turn it off again when things are rolling along smoothly. Unfortunately, it just doesn’t work that way. Innovation tends to be all on or all off. You can’t just turn it on when you need it. You have to bake it in to everything you do.

Samsung is my favorite recent example of “all-on” innovation. Samsung recently rose to number two in Boston Consulting Group’s annual ranking of the world’s most innovative companies. According to BCG, Samsung is ahead of Google and only slightly behind Apple. Samsung’s mantra – which they apparently repeat at every meeting – is “Change everything but your spouse and your children.” In other words, everything must change. No wonder they make such cool refrigerators.

I was reminded of Samsung as I browsed through Rita Gunther McGrath’s book, The End of Competitive Advantage. McGrath identifies six warning signs that your innovation engine is broken. In general, all six signs have to do with turning the engine on and off. Here are McGrath’s big six:

Innovation is episodic – it’s the on/off switch. Would you bet your career on a project that might be switched off? Maybe not. In the environment that Samsung fosters, you don’t have to make that bet.

Process is invented from scratch – each time we turn on the innovation engine, we act as if it’s never been done before. Time for a brainstorming session! But there’s a lot to be learned (even on this website) about the nature and processes of innovation. Why re-invent the wheel?

Resources are held hostage – as Rosabeth Moss Kanter has pointed out, if you’re trying to finance innovation out of the “regular” budget, you’ll fail. Too many people already have dibs on the funds. McGrath writes that too many companies don’t play to win but rather play not to lose. To innovate, you’ll need to gamble. You’ll need a person with the authority to gamble and some funds for her to do it with.

Innovations placed in existing structures – if you turn the innovation engine on and off frequently, where would you place an innovative project? After all, it’s likely to be temporary. So, just make it a “bag on the side” of the existing organization. But innovations require new processes, not just temporary homes.

Judging innovations by “historic” criteria – perhaps the worst example of this is to measure the ROI of innovative new products. ROI works best when there’s some consistency and predictability in the mix. An innovation has no history. Applying standard financial metrics to an innovative product will simply stifle innovation. In an “all-on” environment, you can afford to develop innovative metrics for innovative products. In an on/off environment, you can’t. (For some non-traditional metrics, click here).

Holding the innovation to plan – of course, you’re going to create a plan for the innovation. The danger comes in sticking to it and holding people accountable for the plan as originally created. Things change. Some innovations fail. You’ll need agile leaders rather than by-the-book managers. Punishing an executive for failing to stick to the plan will eliminate any incentive for other executives to innovate.

Moral of the story: once you get the innovation engine running, never switch it off.

 

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