Makinginnovationmore

I saw a sign in my Twitter feed recently that spoke volumes about innovation culture.

 

Let's contemplate the audacity of suggesting an idea about a movie full of sharks in tornadoes for just a moment.

Creativity and Combinations
To suggest a movie about sharks in a tornado demonstrates creativity.  Good innovation often happens when you combine two unexpected attributes or components together to create something new.  In this case I think everyone understood that Sharknado was over the top. And why not?  If you look at the rest of the movies being made, something a little tongue in cheek makes sense.  The first thing to take away that someone in Hollywood did right from an innovation perspective is making unusual connections.

The guts to go beyond the obvious
But beyond the idea of combining unlike objects, imagine the guts it takes to suggest something so new and unusual.  In many organizations even reasonable ideas get shot down very quickly.  Participants will wonder about profitability or ROI.  Others will question customer demand or technical feasibility of ideas that seem possible and not outlandish.  That's because all of the possibility and "wonder" has been squeezed out of us in the corporate world.  The vast majority of people live lives of quiet desperation, recognizing opportunities but quickly looking away, aware of the challenge to create new ideas or the price one might pay for suggestion them.  What environmental, economic, and emotional conditions must exist for people to suggest outlandish ideas?

Accepting the impossible
Now, place yourself back in that setting, where some low level production assistant has just suggested making a disaster movie, one that places sharks (looking back to Jaws and other killer aquatic animals) in tornadoes (again, looking back at classic disaster movies).  The idea combines two traditional Hollywood tropes, but in an unexpected way.  You'd think even Hollywood producers would have laughed the idea out of the room.  But they didn't, and that's why Hollywood creates more stuff (that's good and bad) than most other organizations and industries even contemplate.

Some producer or producer's assistant had the guts to say:  tell me more.  Rather than shooting down an idea that marries two very unlikely protagonists, someone accepted the nearly impossible idea and said, go further.  This is what divides innovators and creatives from the realists and the execution-oriented folks.  Realists and operationalists would scoff. They'd say "Sharks don't get caught up in tornadoes" or "That's unrealistic, no one would believe it".  Yet today we walk around with more processing power in our smart phones than a spaceship had that carried men to the moon.

We in corporate America need to regain a sense of wonder and possibility.  We need to stop thinking about what customers need next week, and start imagining what they'll be doing or what need they'll have in 3, 5 or 10 years.

But that's Hollywood, you'll say
Some of you reading this will argue that it's Hollywood's job to create funny, compelling, mindless entertainment, and that means stretching the genre or combining or creating really different concepts to attract and retain an audience.  But isn't that also our jobs in corporations?  To create really interesting and valuable products to attract the attention and revenue of new and existing customers?  Do we really think that in a time and place where change happens so frequently, societal norms and tastes shift rapidly, where information flows so freely that we can win by developing safe, me-too products?

Did AirBnB or Uber create a safe, me too product, or did they dream up something new, audacious and quite different that clearly threatens the existing industry players?  Corporations, in all industries and of all sizes need to get some of this Hollywood spirit, to foster new and outrageous ideas, to encourage new growth, to create new and interesting products and services for customers.

Conclusion

We need a little more Sharknado thinking in corporate America, and to get it we'll need a lot more Hollywood style interaction - mixing unusual stuff together, extending ideas or concepts beyond the breaking point, being willing to generate and speak out loud really outlandish ideas, with the sense that someone will say:  tell me more.  The people in Hollywood aren't that much more creative than the folks you'll find in many Fortune 500 companies, but they have an expectation and culture of creating new things, and a tolerance and expectation of failure and experimentation that many companies lack.

As a sometimes writer of blogs, white papers and even a few books, I understand the challenge of facing a blank page, trying to form the words into meaningful and insightful sentences.  A lot of times the concepts and ideas that sound so good in my head get misplaced and mis-translated on the page or simply don't ring with the same clarity when written that they seemed to have when I thought about them.  Writing in any form is a challenge, and increasingly I think writing is very similar to innovation.  Writing, after all, is the act of dreaming up something new to say about something old, bringing new concepts or new stories to light in a new way.  Writing, like innovating, is creating.

What's more, writing, especially stories, takes real creativity.  Tolstoy wrote that there are only two basic story lines:  a person goes on a journey or a stranger comes to town.  When you think of the diversity of stories, the creativity it takes to make them compelling and the range of story types, characters and plots, you can easily see that writing is creativity and innovation.  So perhaps we innovators can learn something from good writers.

What good authors know about writing

It turns out that many writers don't think they know much about writing.  Joe Fassler, who wrote the article that prompted this post, says that many authors find writing difficult, frustrating and challenging.  Even those that you would think are "experts" describe their struggles.  Steven King, Amy Tan and others talk about writing and re-writing, often rethinking and reworking their ideas and stories over and over again.

Reading Fassler's article made me think of my own writing and how it relates to innovation.  There are a number of interesting parallels.  First, when writing an article, blog or story, the author must have an interesting story to tell, a new perspective, and make the story as interesting as possible to the potential reader. In the same way an innovator must target customers who have needs, and shape ideas into new products or services that customers want to buy.

Second, authors will tell you (and they do so repeatedly in the article) that first drafts are for discovery and experimentation.  These drafts identify gaps and weaknesses and potential areas of opportunity or discovery.  Amy Tan notes that she throws out 90 to 95 percent of her initial work.  Innovators face the same challenge, but often have very different expectations.  In business we think because we have detailed processes and deep experience, we should get ideas right the first time.  Instead we should learn to diverge and converge and iterate until the ideas achieve their correct shape, but time and cost pressures rarely allow innovators to fail, restart and reshape ideas.

Finally, the article says that the artistic process never gets easier. Even experienced authors struggle with phrasing, story lines and plots.  They constantly work at their craft.  Innovators could learn from this dogged determination.  Most innovators arrive unready and unseasoned, attempt to perform an innovation activity quickly, declare victory once they've defined a new product or service, and return to their regular jobs.  They don't hone their innovation skills and are surprised when innovation is difficult or requires learning, discovery and iteration.

Paralyzed by your thoughts

One author described being "paralyzed by her thoughts".  This statement made me think of many people in idea generation or brainstorming sessions who are unable to generate ideas in the moment, placing far too much pressure on themselves to get an idea right.  The pressure we place on ourselves as writers or innovators is often detrimental to creative thinking.

The author of the paper sums it up nicely when he says "I’ve learned, bigger feats, bolder ideas unfold over the long haul—in the space where success feels uncertain, even unlikely".  Good innovators recognize the agony and humility in this statement, but the best ideas do take time and require hard work.

One final quote that I think captures both writing and innovating:  "I'll keep at it stubbornly and gladly until the job is finished".


Innovators and authors have similar jobs and similar challenges.  Most authors write because of a passion for a story or an idea, and learn to iterate and rewrite/rework.  Most true innovators also have a burning passion for an idea or a problem, and most successful innovators are more than willing to describe their experiments, their failures and their iterations that ultimately led them to success.  We need to understand how these two jobs are similar, and what authors and innovators could learn from each other.

I think we often over complicate the work of innovation, because we believe it cannot be simple and straightforward.  After all, how can an activity that can disrupt an industry, create compelling new products or services and reap significant riches be simple?  To drive all of this change, certainly innovation must be difficult and complex, right?  Consultants often benefit from this assumption that innovation is difficult or unusual.  Unfortunately the presumption that it must be difficult also means that many people are afraid they don't have the requisite skills.  Fear, uncertainty and doubt about innovation and the knowledge and skills it takes to do it well mean that far less innovation is attempted than probably should be.

In order to accelerate the pace of innovation and increase the amount of innovation that's done, we need to simplify it, or at least remove some of the uncertainty.  To do that I'm going to argue in this relatively short post that innovation has three important deliverables:

• problem definition, 
• ideas and 
• solutions.

Between those deliverables are two very important activities that illuminate and contribute the the generation of those deliverables.  Those two activities create context and content. While we focus on the deliverables it's actually the content/context that really drives innovation value.  Let's review the deliverables and the activities between them to understand what I mean.

Problems/Opportunities

The first real deliverable in any innovation activity should be defining and scoping an interesting problem or opportunity.  To ask for innovation without defining a need or opportunity is useless - but to innovate based on a key insight, opportunity or problem is exceptionally valuable.  Your first goal is to find the right problems to solve, the right opportunities to address.  I don't have enough pixels in this blog post to tell you how to do that, but have written about this previously.

Too many innovators and innovation teams start out without a good problem definition or opportunity, and this lack of scope dooms their work.

Ideas

Many people think an innovation activity begins with an idea, but they are wrong.  An innovation activity begins with a problem or opportunity that you investigate, and learn more about, and discover needs, all of which is context, and the next deliverable is a set of viable ideas to solve the problem.  Ideas are simply a waypoint in an innovation process or exercise.  Unfortunately many people think they are the output.

And, even when innovation teams generate ideas, they often limit their thinking to small changes, incremental ideas, and a small handful of ideas rather than fully exploring the innovation opportunity.

Solutions

Innovation doesn't begin or end with ideas.  It ends with a valuable solution that customers can acquire and use, that makes their lives better or easier or more valuable.  There really isn't any innovation without this final value realization, so a valuable solution, well launched and well marketed, is the final deliverable of an innovation activity.

Now that we've identified the three deliverables of an innovation activity, let's turn to the activities that shape and inform the deliverables:  the context setting and content development that helps shape and inform ideas and solutions.

Trends and Needs:  Context/Content between problems and ideas

Once you have settled on a problem or opportunity to solve, you need to back up and gather context.  What are the issues?  What are the challenges?  Why does this problem or opportunity exist?  Who else is working on it?  Do customers understand the need or opportunity?  Is there value in solving it?  This context helps you shape the problem and begins to point at potential solutions (ideas).

We typically frame this in two activities:  trend spotting to understand the evolving nature of the world, the market, customers and technologies, and customer insight gathering, to understand the gaps and needs of customers and what they value.Without this insight, discovery and context you cannot generate meaningful ideas, and if you do manage to generate good ideas you won't be able to describe to anyone why they matter.  Too often innovators assume that they know what customers want or need, or simply believe their solutions and technologies are so valuable that they can address any needs or gaps.

Evaluation, Prototyping and Development: Context/Content between ideas and solutions

Once you have good ideas you must evaluate them against customer needs, corporate viability and competitive reality.  Then you must determine how to produce them and launch them in a timely fashion.  These activities too require investigation, discovery and context setting.  In many cases if the ideas are very new or different, you may need to create new product or service development capabilities or develop new business models or channels.  This may require new discovery and new experimentation - something your existing product development processes won't value or understand.  You may simply need new context for new ideas to be realized as new products.

Where the real work lies

The real work of innovation lies in this context and content development, between a good problem statement, ideas and solutions.  We often get far too caught up in these discrete deliverables, never realizing that the value lies in how well we understand the context and generate and evaluate the content between the deliverables.  If you want to know - its in these content and context activities that the innovation magic happens.







We innovators place far too much emphasis on the deliverables of innovation, and on ideas in particular, when we should be focused on the generation and understanding of the context and content activities that must occur between the deliverables.

I was thinking over the weekend that for years we've positioned innovation incorrectly.  Too often we position innovation as creating a new and valuable offering or solution, ready when customers are ready to demand new products and services.  In other words, we've positioned innovation as something to do to prepare for future business, future needs and future demands.  Innovation does answer for these issues - identifying needs and developing ideas for products and services for unmet and perhaps unanticipated needs.

But in the hustle and bustle of day to day business, the main focus is on the now.  What can you deliver today, this week, this month, this quarter?  How can you help me achieve my quarterly revenue and income goals?  Sure, the future is nice, but I'll worry about that when I get there.  With this mentality, cost cutting, becoming more efficient, gradual but general improvement is the key focus, not innovation per se.

Making innovation more relevant right now

So the question becomes, how do you make innovation more relevant, right now, to executives and managers who are so focused on the short term?  One approach would be to focus on the "short term", what can innovation do for us to put better products on the shelves in less than 90 days.  The general answer to that, given product development cycles, channel issues and customer awareness is:  no much, except perhaps in the virtual world.  Building, modifying and releasing a physical product is going to take more than 90 days, and 90 days is the magic timeframe.  Anything we can do to impact revenue and cost within 90 days is good.  The timeframe beyond 90 days seems almost imaginary.

Innovation, where practiced at all, becomes incremental because of this pressure to generate rapid results.  Even if we can speed up innovation activities (we've run innovation programs from problem definition to fully developed prototypes in under a week) you've still got to go through the product development and launch cycle.  This means innovation will be focused on items and attributes around the periphery - messaging, packaging, claims, rather than interesting or radical innovation of the product or solution.

Another approach is to use innovation to ferret out efficiency gaps.  If we can't create better products and services, can we use innovative thinking to shorten any barriers or gaps to bringing our products to market with less cost or with fewer inputs?  This has been the management focus for years - right-sizing, outsourcing, automating.  It doesn't necessarily lead to new products but may lead to less expensive products or more rapid turns of incremental products.

So, while we can speed up the existing processes and use innovation to identify gaps or inefficiencies, or use innovation to make some changes to the periphery of the product or service, there's not a lot of innovation that can be delivered and impact the bottom line in 90 days or less.  So we need to think about innovation differently, or perhaps in different categories.

Categorizing innovation

Clearly, as I've defined above, there's a real need for focus on process and peripheral innovation.  These innovations are meant to gradually improve the product or service, cut costs and deliver more bottom line value, and to do so quickly.  The driving pressure for this innovation focus is cost reduction, time reduction and the desire to show customers something "new", even if the newness is relatively minor.

There's also a need for preventative innovation.  I'll call any work to blunt attacks by existing competitors or new entrants as preventative. This kind of innovation identifies potential openings and gaps in a product line, or new "in demand" features or benefits that you don't currently offer.  Preventative innovation considers a slightly longer time frame - perhaps 2 or 3 quarters - doesn't necessarily create a new product as much as identify missing features or product line gaps and carefully evaluate what competitors and potential entrants are doing.

Then there's radical or disruptive innovation, creating a completely new product or service, or disrupting an existing adjacent market.  This kind of innovation takes focus and planning, commitment for quarters or even years, and full commitment over several planning and budgeting cycles.  This kind of innovation ends up on the magazine covers and is what every CEO wants but can't quite understand how to deliver given the demands for quarterly results.

Three horizons

The three categories I've defined above are exceptionally similar to the "three horizons" model that many innovation consultants talk about.  But rather than call them "incremental", "radical" and "disruptive" I think it makes more sense to describe them based on what they are:  constant evolution, preventative and creative.

The first type of innovation is necessary (and is almost always underway) because your products and offerings can't sit still.  You must find ways to cut costs, make your delivery more efficient and tinker around the edges of existing products.  The second type of innovation is probably the least understood, because too many companies don't understand what their competitors are doing, and are often shocked by the offerings of new entrants.  Companies need to do a lot more preventative innovation, from a defensive point of view, to ward off new entrants and sustain or grow market share.

Everyone acknowledges the importance of creative innovation - that is, the creation of a completely new offering that radically changes the competitive landscape - but few truly know how to do it or are willing to commit the resources to do it.

Investment cycles

Here's where every innovation consultant will lecture you about how much time and investment should be made in each of these three portfolio segments.  You can think about the three horizons, or my evolution, preventative and creative phases, as components of an innovation portfolio and next ask:  how much time, energy and investments should go into each one?  The general rule of thumb answer is 70:20:10.  Seventy percent of your innovation effort should go into evolution, 20% into preventative and so on.  But what if your budget for innovation is:  zero?  What if executives demand innovation but don't provide budgets or funding or resources?

The inevitable fall back position is to conduct efficiency innovation (evolution) because that's something your teams understand and can do relatively well now.  And, of course, you'll build and staff one high profile team to explore some really interesting innovation (creative) but they won't have the commitment or funding to stick it out - it's merely window dressing, because you expect to show some immediate results from the evolution innovation in the next few weeks and everyone will be satisfied.

Let's change the language

I think innovation champions and teams would do themselves a big favor by refocusing innovation language and talk about innovation in line with processes and outcomes.  We can flavor our language with:  evolutionary innovation to deliver short term benefits, preventative innovation to resist new entrants and sustain market share, creative innovation to win adjacent markets and customers.


Once we win the language battle and demonstrate we can deliver on evolution and preventative efforts, we can get the funds and resources to do truly creative innovation.

In television, an outlandish episode that seeks to introduce revive a series often signals the eventual downfall of the show.  Those old enough to remember the TV series Happy Days will remember the episode when Fonzi jumped the shark on water skis.  This gave us the expression that something had "jumped the shark", an event signalling an inevitable downfall.

Today I'm wondering if making a movie about toys is a signal that something has "jumped the shark".  In strange and disappointing news, Lego announced that it was facing dire sales projections, with growth slowing from over 25% per year to low single digits.  Strange, when just a few years ago Lego was on top of the world, with great new toys, Lego kits, Lego Robots and the Lego movies.  While the management team blames internal complexity for the slowdown, those factors don't necessarily contribute to slowing sales.  Rather, I suspect that a company that had been on the brink of bankruptcy only a little over a decade ago discovered how to innovate in desperation, and began to neglect innovation as growth accelerated.  What we are seeing now is the aftermath of too little innovation and too much marketing.

What lessons can we learn?

Of course I should admit I'm doing this analysis from a distance, without complete information since Lego is a private company, but over the last few years Lego hasn't done nearly the innovation or introduced nearly the range of products and services that it did from the mid 2000s until 2012 or so.  Lego management turned the company around in the mid to late 2000s, and growth accelerated, only slowing in the last year or so.  The signals were out there, of course.  A new CEO was hired and let go within only 8 months.  What can we learn from Lego's example?

Growth can lead to bureaucracy and risk avoidance
Lego may be challenged by its aggressive growth, and with that growth came size and complexity.  However, and complexity isn't necessarily a factor in its innovation success, unless Lego allowed complacency and bureaucracy and risk avoidance to grow as sales grew.  Innovating at the brink of bankruptcy clarifies the mind (Steve Jobs would agree) and forces companies to focus on what's really important.  Getting large and perhaps bureaucratic can mean that concerns grow about taking new risks.  Internal bureaucracy didn't cause slow sales growth unless it blocked new innovative products or redirected investments.  Lego probably just lost some of its edge and taste for risk and innovation.

Only the paranoid survive
To me, one of the most important take aways should be, you simply cannot become complacent.  Good innovations from just a few years ago will only sustain your growth and differentiation for so long.  Customers are hungry for new solutions, rapacious in their research and unforgiving in their quest for new stuff.  In the past products and solutions had long shelf lives.  You could create an interesting product and merely tweak it, adding a handful of new features every few years.  Those days are over.  Customers demand and expect new capabilities and features on a regular, recurring basis.

Companies need to gin up a consistent innovation program which aims for incremental and disruptive innovations to occur all the time.  Lego is just an extreme example of desperate but winning innovation to avoid bankruptcy followed by a period of less interesting or less successful innovations while harvesting the profits of the prior innovations.  Lego and companies like this are particularly subject to this boom and bust cycle because of their target audience (children and teenagers primarily) who age out and don't want the same toys their siblings or parents had.  But while Lego is an extreme example, companies in every industry should take note.  From the peaks of profitability and industry acclaim to laying off 8% of its workforce in a period of only a few years.

Explore the adjacencies
I had hopes for Lego when they built some of the early Lego robots, because 1) the robots were cool 2) the robots extended Lego's audience into older kids, teens and even adults and 3) they were more expensive and had pull through.  But more importantly the robots were an exploration of an adjacent market or customer group.  Good innovators must constantly evaluate the adjacent markets and customer segments and provide new capabilities, features and products that entice new customers.  The apocryphal story is that Lego discovered lead users building robots with basic Legos and entered the market with their own product.  If that story is true, perhaps it's time for Lego to go back to evaluating what users are doing with Legos and capitalizing on new adjacencies.

The quote from the Lego chairman that he wanted to simplify the business model in order to reach more children suggests that Lego isn't reaching for new adjacencies, but doubling down on a fickle core market.

Grow up but don't grow old
Lego's problem mirrors Disney's problem in a way.  The business scales, but only so far.  Both attract children and young adults, but have difficulty really capitalizing on the adult market.  Disney has made forays into music and movies with some success, but they should be able to win more share and more business from adults.  Both of these firms need to grow up (expand their customer base using their trusted names and capabilities) but not grow old (build sclerotic bureaucracies that resist innovation).

You'll forgive me if I lapse into a bit of consultant speak - can't help but do so since I've been in consulting for many years.  One of the factors that dictates what people do as consultants (and in other jobs or industries where time is tracked to projects or other expense categories) is the availability of charge codes.  Everyone knows that lawyers, for example, typically bill their time in 15 minute increments.  They need not only to bill their time in these time segments, but they also need a "charge code" - some mechanism to associate the time they just spent to a client, a business development activity or some overhead charge.

As consultants, most of us are no different.  Regardless of how you ultimately bill the client (time and materials, fixed fee, gain-sharing or other mechanisms) almost every consultant and consulting firm I'm aware of tracks consulting time.  I'm sure the same is true in many other industries where people are accountable for a time sheet at the end of a week or month.

Tracking Time

In a consulting firm, where you spend your time matters, especially if you are expected to generate revenues by billing clients.  As a consultant one of your primary goals is to generate enough business to sustain your salary and overhead costs.  A second goal is develop new and interesting value propositions or skills that can provide customers with new insights and create service differentiation for yourself or your company.  In the consulting business we call this "practice development".  A third goal is business development, spending time to talk to new prospects and existing customers about new work. Finally, in every business there is some time that is simply "overhead" - filing, retrieving data, filling out time cards, doing stuff that drives the business forward but isn't billable.

As an individual with a time sheet, you are constantly evaluating your time commitments:  how much time for this customer?  How much time and effort for that customer?  How much time in business development? How much time in practice development?  Time and how it is accounted for, becomes a major consideration in everything you do.

Cobbler's Kids

Which is why even consulting firms need a charge code for innovation.  While we in the consulting industry are good at tracking and allocating time, we aren't always good about spending time innovating our own products, services and business models.  And time allocation matters - if you have a goal of being 70% chargeable, that's where your focus and emphasis will be.  Which means you'll spend more time with customers and less on business development, practice development and lastly, of course, will be innovation.  This is why even consulting firms that lead innovation efforts are often like the Cobbler's kids - they have the worst shoes.  Even those of us who talk to our customers about making time for innovation often fail to do it well.

If we, who track time so assiduously fail to define time and account for time spent on innovation, what must it be like for corporate practitioners who don't account for their time or worst, don't have specific time allocations?  As we know, innovation is very important but rarely urgent, so it frequently slips down the "to do" list until it becomes an utter necessity, at which point it becomes a "rush job".  No time allocation, no fixed expectation of time spent in innovation and an acceptance of allowing innovation to fall to the bottom of priorities mean that very little time is spent building skills to become better at innovation, let alone actually doing innovation.

What If

But what if everyone in your company had to account for their time, and what if everyone had a specific time allocation for innovation?  That might differ depending on the individual, their experience and interest in innovation of course, but what if at the end of each year you could look across your team and see how much time an individual spent building innovation skills and contributing to innovation projects.  Wouldn't that be valuable as a manager?

Wouldn't the signal that people will be expected to spend time on innovation, and that time will be managed and accounted for, send signals about the importance of innovation and the expectations that innovation must deliver results?    All too often we hear that people within corporations don't have time for innovation.  That's because they believe they are 100% allocated to their "day jobs" and can't afford distractions or time away.  What if managers and executives specifically allocated and measured time spent in innovation by individual, team and department, and set goals for each individual or group, and examined the outputs and outcome.  Do you think people would find time for innovation?  Do you think more innovation would get done?  Of course the answer to these questions is "yes".

Innovation with a purpose

But the final twist to this story isn't just that people should spend significant time, but that they should be focused on significant opportunities.  It's easy for people to commit 5% of their time to innovation and to generate really incremental ideas.  That outcome isn't really all that better than what happens today.  Beyond simply allocating and evaluating time, management teams should include specific portfolio goals - 70% of your innovation time on incremental tasks, 30% on disruptive ideas, and then measure against those goals.  If every individual or team in your company spent 5% of their time on innovation (100 hours in a 2000 hour work year) and 30% of that time was focused on disruptive innovation (30 hours per individual per year), could we expect some really new and interesting ideas?  You bet we could.


What's holding innovation back?  Time.  Time to think, time to explore, time to experiment.  And strangely, we aren't time deficient.  Most people work a 9-5 job and spend inordinate amounts of time in meetings where very little gets decided or done.  If we could reclaim even a modest amount of that time and reallocate it to more important activities, and direct those innovation activities to more interesting outcomes, the innovation most companies could create would be incredible.

It seems strange to me, after working for over 12 years in innovation, that so many people can view the same set of circumstances and opportunities in so many different ways.  Our economy is awash in innovation opportunities, and the opportunities are growing and expanding.  There are opportunities to innovate new products and services, of course, but also new channels and new business models.  Customer experience is rapidly becoming an important innovation avenue.  Paul Hobcraft and I have been writing about the opportunities that are available in entire platforms and ecosystems, and these of course create in turn new opportunities.

The basic building blocks of opportunities - customers, unmet needs, emerging trends and technologies - are all growing.  Beyond that most of us have our basic needs fully met - food, clothing, shelter are all reasonably achieved.  That means that new innovations may be more intangible, psychological, emotional, notional - but there are as many opportunities there as there are in tangible innovations, if not more so.

With this opportunity abundance, why is it that so many individuals and companies see restrictions, limits and barriers to innovation, rather than the vast potential that's available if only they'd set aside past conventions and risk tolerances.  After all, this isn't a 'glass half empty, glass half full' conundrum. This is more akin to a 'glass half empty, barrel overflowing' situation.  People simply aren't paying attention, are too distracted or too fearful to really think about all the potential innovation opportunity.  Or, as I'll explore below, we give into a perspective that suggests that many issues, conventions, regulations and cultures are fixed, unable to move.

Like an insect in amber

You may be familiar with amber - the gemstone that originates from ancient tree sap that hardened over time.  The Czar of Russia had an entire room that was covered in amber - supposedly one of the most beautiful rooms in the world.  You'll often find in amber insects from long ago that were captured by the sap as it flowed down pre-historic trees.  I often think of modern business executives and their teams share similarities with those insects.  They are caught up, stuck, and have lost their freedom of movement. But unlike the insects, that loss of freedom isn't because of a tangible, sticky substance, but because of the stickiness of their perspectives, their cultures, their experiences and education and their industry conventions.  They are insects in a virtual amber, doomed to limits that are dictated and prescribed by their own thinking.

Innovation comes from outside

It may not seem evident at first, but virtually all radical and disruptive innovation originates from outside an industry's boundaries, by people who often weren't even in the industry, who were serving other clients or other needs and saw a way to serve a new set of customers or solve a new set of needs.  The reason these outsiders can so easily disrupt an existing industry is because they haven't been paying homage to the conventions and cultures that built the industry or market.  These entrants have little or no stake in how the industry or market is built or its existing business models, and in fact can profit by radically changing the business model.  These individuals, like Richard Branson or increasingly Elon Musk, are radical free agents, who aren't bound by industry conventions or past expectations, who actively look across industries for rigid decision making and adherence to past ways of doing business.

Weak links / Strong links

The other way to think about this stickiness is a "weak link/strong link" framework.  There are two perspectives: first, the linkages within the industry or convention and second the linkages between the participants.  Disruptive innovation is easier in the first example when there are few strong industry conventions or shifting from existing conventions is relatively painless for the consumer, or when everything is shifting, so the customer accepts that shifts are necessary and important.  An example is when digital music appeared via MP3s and Napster made music sharing acceptable.  Apple was able to disrupt music distribution and publishing because the form factors changed, the technology (digital versus physical media) changed and the music players themselves changed.  When multiple factors are changing, disruption is easier to accept.

Conversely we can see why it is difficult to innovate in the airline industry.  There are too many rigid, regulated or business model conditions.  Safety concerns, unions, the transparency of pricing, the reliance on key volatile inputs (oil, labor), the fixed number of gates and so on don't leave a lot of options for innovation. This means that much of the innovation needs to happen outside of the core offering, and explains why the most interesting innovation has come from outsiders (Branson for branding) or new entrants (Emirates/Qatar) for new services.  But even these innovations pale when we compare them to innovations in technology, in software and in other markets or industries where conventions or regulations are absent or easier to ignore.

What's fixed / what mutable?

So the questions a potential innovator must ask themselves in any situation is:  what's fixed, and cannot be changed?  What do competitors assume is fixed but could change?  Where are there strong linkages that would be difficult to change, and where is change already occurring that we can surf to greater success?  And, how "fixed" or transmutable is my company's culture, perspective and thinking?  Can others around me recognize opportunity and move with it?

Innovation is possible in any setting and in any industry.  Even a very heavily regulated industry such as air travel has plenty of potential for innovation if only the participants would think beyond product innovation.  In other industries that are less regulated, innovation opportunities abound.  Innovators must determine the "fixedness" of their perspectives and cultures, and then the fixedness of the industry or market they compete in.  Otherwise, like the insect swallowed by the tree sap, they'll find themselves encased, unable to move and unable to innovate.

For the last few years a commercial has been running to advertise Dos Equis.  In these commercials there's always some hyperbole (I know, who would of thunk it in a beer commercial) about a suave, sophisticated gentleman who can simultaneously drink Dos Equis and entertain heads of state.  He is, we are constantly reminded, the most interesting man in the world.  We are told that his mother has tattoos that say "Son" on them.  Superman has pyjamas with his face on them.  And so on.  And because he drinks Dos Equis beer, you should too.

In light of this (admittedly interesting and captivating) advertising, I thought it would be interesting to describe in the same way what the most innovative man (or woman) in the world might think, might do and how they might behave.  While the most innovative man in the world doesn't exist, wouldn't it be worthwhile to imagine what skills, attitudes, perspectives and beliefs that individual would have?  Here we go...

The most innovative man (or woman) in the world

Motto
The most innovative man or woman in the world would have to have a motto.  The most interesting man says "stay thirsty" because he's selling beer.  I believe the mantra of the most innovative man in the world would be "stay curious", because he's interested in identifying and solving interesting problems.

Sidekicks
The most interesting man in the world, according to the ads, is almost always surrounded by supermodels and beer.  The most innovative man (or woman) in the world would be surrounded by customers and prospects, because he or she would be constantly trying to ascertain what the really interesting, unmet needs were.

Settings
The most interesting man in the world is always shown in exotic locations - skiing in the Alps or yachting in the Med.  The most innovative man or woman in the world would be found in more mundane places - research labs, startups, focus groups - always searching, always curious, open for any new insight.

Connections
One thing both share is the desire for connections, but for very different reasons.  For the most interesting man, connections are about social advancement, getting invited to the right party.  For the most innovative person, connections are about exchanging new ideas, mixing, combining and blending new ideas and experiences to create new solutions.

Approach
The most interesting man in the world has a "been there, done that" aspect, always with a wry twinkle in his eye that suggests he's done this before and knows how it will end.  The most innovative person in the world approaches every experience as if for the first time, with a Beginner's Mind approach, hoping to learn something new.

Conventions
Another thing they share is the lack of conventions.  Neither are interested in following conventions but in setting new conventions, new ways of thinking.  The interesting person does it for attention and followership, the innovative person does it to disrupt markets and industries and create new solutions and value.

Insider/Outsider
The most interesting person is a total insider - knows everyone, knows where the bodies are buried and his or her social capital is built on that, and on sustaining the status quo or bettering it.  The most innovative person is a near outsider - knows a lot of people in the in-crowd but also knows plenty who aren't "in".  He or she understands the social conventions and industry standards but doesn't rely on them, just as happy to subvert them as to sustain them.

Amalgamation
Finally, the most interesting man in the world is an amalgamation - the combination of a number of stories and people combined into one fictional person.  Likewise, the most innovative person in the world is also fictional, because it takes a group of people or a team to bring an idea to full reality, and few people possess all of these traits.

 Just as no man is an island, no one person can contain all of the skills and traits to take an idea from concept to realization.  The sooner corporations understand that innovation is a team sport that requires an interesting blend of different skills and experiences, and the environment in which these teams can thrive, the sooner we'll see more interesting products and services.

The most innovative person on the planet isn't known, and probably won't be, because innovation is a team sport, where many different people bring many different skills, perspectives and experiences to bear.  Stop searching for the most innovative person and start building the right teams and placing them in cultural and business environments where they can succeed.

There's probably few activities that corporate folks enjoy less than corporate training.  For most it's guaranteed to be a slog, or a review of policies and procedures rarely used and important only to a specific team or set of circumstances.  While people are attending the "mandatory" training to learn material of vague importance to their day to day jobs, their inboxes are filling up, cat videos are going unwatched.  Most people assume they have enough knowledge to do the jobs they have, and they are often comfortable simply winging the rest.

That's why innovation often presents such an interesting challenge.  For the most part people have the suspicion that innovation is unusual and requires new insights and skills they don't possess.  And, since they don't possess those skills, they will avoid doing innovation work (from fear of failure) or will make innovation work align to existing programs and policies (which they know well).  In response, many organizations are turning to innovation training and innovation workshops.

I'm just back from leading a couple days of innovation training with a client, and the more we do this, the more convinced I am that 1) corporations can do a very good job innovating with the people they have 2) innovation training - learning the skills that make up a good innovation activity isn't difficult and 3) people will need to both learn, relearn and unlearn some things in order to achieve innovation success.

Learning

The fact of the matter is that most of us have spent the last 20 to 30 years learning to be efficient, to succeed at our first attempt.  This makes all of our efforts very careful and very incremental, and doesn't embrace innovation or disruption.  We aren't good at discovering new needs or experimenting with new ideas, and we need to learn some tools and methods to help us do a better job of finding unmet needs and creating interesting ideas.  You can learn the tools to innovate, and the more you practice these tools and methods the more creative and capable you'll become.  In this regard, innovation training is important, but must be quickly followed up with putting the learning into practice.

Relearning

A lot of what we teach when we teach innovation skills is going back to basics.  First is doing a good job defining an opportunity or problem to tackle, rather than simply solving the most obvious problems or symptoms.  Next is taking the time to understand what customers actually want and need, rather than presenting your latest technologies.  Third is having an open mind, creating and combining ideas.  Like Fulghum's book All I needed to know I learned in kindergarten, some innovation thinking is simply taking the time to contemplate and analyze a lot of ideas, using interaction methods and perspectives that you learned earlier in life and later abandoned.  It's also important to allow ideas to evolve and not judge them immediately - to build on and expand ideas and to provide the room for really crazy ideas to develop.

Unlearning

There is some unlearning that's required when people learn about innovation.  For too long we've settled for success, lack of variation, efficiency.  This means we've curtailed exploration, discovery, and wonder.  We approach problems as experts rather than as naive beginners, which shuts down a lot of good ideas and exploration.  We rush to converge when we should take time to diverge.  A lot of innovation seems almost counterintuitive, not because the tools and methods are difficult but because they seem to conflict with how we operate our businesses today.  To do good innovation you must sometimes take the opposite view, take on new perspectives, ask what would happen if industry norms were eliminated.  You have to unlearn some of your assumptions and ask unusual questions.

The benefits of innovation training

Like us old guys who laughed off yoga, stretching and warming up who are, later in life, coming to realize how important core strength and flexibility are in day to day life, you can get a lot out of innovation training and can become far more creative and innovative if you are willing to adopt some new tools and a new perspective or mindset.  This is true for individuals, small teams and ideally for an entire corporate culture.  You simply need to learn the tools and methods that work, relearn how to work together and unlearn some of the things that seem so certain.  Once you do that, or your teams or culture does that, you have the chance to be far more innovative.

Thank goodness for Twitter.  What would we do without this constantly refreshing stream of bromides, insights, accusations and occasional bursts of wisdom?  Just yesterday while perusing the Twitter stream I saw a quote attributed to Jonathan Ive that made me want to sit up and scream.  The quote was relatively straightforward and seems innocuous on its face:

"To do something innovative means you reject reason"

Sounds about right, doesn't it?  Innovation means that you are creating something new and potentially disruptive, and that means that you may have to go against "reason".  As I've said before, I'm a big fan of George Bernard Shaw, who said that all progress is due to "unreasonable" men and women. But do we have to reject reason in order to innovate?  I don't think so - in fact I think we have to embrace reason, knowledge and insight in order to innovate.

Reason or Convention

What I think gets confused here is the idea of fighting "convention" and somehow that becomes conflated with reason.  When we innovate we are often changing the status quo, and there are plenty of people with reasons to protect and sustain the status quo, who can give you plenty of..wait for it.. reasons why you shouldn't disrupt or change the status quo.  Convention is powerful, and if the quote had said, "To do something innovative means you reject convention" I would have said: Amen.

However, we cannot reject reason when we innovate, in fact we must rely on insight, intelligence, research and reason when we innovate.  That's because the only way to encourage people to commit to new ideas is to demonstrate new insights, new needs or new experiences, which are all based on research, insights into unsolved problems or challenges or new technologies.  This all appeals to reason - why would I choose an uncertain unknown over a predictable certainty?  Only if the unknown is promising, compelling and valuable.  And how would I communicate those benefits?  By appealing to your reason, and overcoming your fear of rejecting convention.

Innovators/Artists/Creatives

So, it might be rightly said that innovators, artists, creatives and others of a similar ilk are unconventional, even unreasonable in their pursuit of new ideas, but not that they lack or reject reason.  Shaw suggests that only people who are willing to bend the world to their viewpoint, who don't accept the status quo, create change and progress.  Only those who use insight, research, intelligence and sometimes their gut see what's coming and apply their reason to overcome conventions and objections to create a new reality.


I didn't have the opportunity to work with Jobs - Ive did - but I'd think Jobs was often unreasonable in his pursuits of innovation and rejected convention, but his insights called on his reason and his intellect.  And Jobs was simply better at spotting emerging needs and markets than others were - this isn't a rejection of reason, it is a validation of reason and a rejection of convention.

There are a lot of concerns about the advancement of artificial intelligence and robotics in regards to creating and especially destroying jobs.  When you read that many fast food and other basic service organizations are experimenting with replacing human workers with robots, you can begin to see the emerging problem.  In the past, many new or young workers gained skills and job experience in low wage, low cost service industries like fast food or retail.  If Amazon popularizes the concept of a retail establishment without cashiers, or McDonald's can fully automate its cooking, food delivery and checkout process, thousands of low wage, ideally entry level jobs will be eliminated.  This is all part of Schumpeter's creative destruction paradigm:  innovation creates new opportunities while destroying or disrupting existing markets and models.

The Implications

There are several implications from this rapid advancement of AI and robotics.  The first, as I've described above, is that many jobs will be eliminated.  This is good in some respects because they are menial, low wage or dangerous.  However, many of them were often entry positions that allowed people to gain skills and establish a work history, which allowed them to move on into positions with more responsibility.

On the other hand, until AI and robots can maintain, repair and upgrade themselves, the emergence of robots and AI into our lives creates new opportunities, for software development, better articulation and fine motor control for robots, maintenance of the robots and so on.  These jobs will pay more and require higher order skills than the jobs they replaced, so we better understand how to prepare people to do this work, which will very soon be in high demand.

There's a third implication I'm interested in exploring, which is that as the use of AI and robotics increases, the cost of robotics and AI will fall dramatically.  And that means that many of us may find a new helper in our lives.

Robots and AI as in-home or in-office solutions

Here's where there's a real opportunity for innovation.  As the use of robotics and AI increases, the price and breadth of services AI and robotics can offer will increase.  We are seeing the very first signs of this from Amazon and Google with their in-home devices that allow us to use natural language to request assistance from virtual assistants. This of course is simply the very thin edge of the wedge, however, because most of the interaction is question and answer, with the human then acting on the information.  As the AI gets more embedded into systems in the home and at work, the AI and/or integrated robots will take the actions, leaving humans free to do more (or take more leisure I guess).  Figuring out how to integrate smart assistants with networks and autonomous robots that can then take action (Siri:  please ask the Dyson to vacuum the downstairs hallway) is the next step but a difficult one, because many of the appliances we have aren't smart enough to be directed or guided by themselves even with very smart AI.

Robots, especially robots made for specific uses, can also provide a real lifestyle change.  If Roomba can vacuum your house then how long before Mowerba comes along to mow your grass, automatically and based on growing conditions?  I think we'll see a plethora of single purpose robots not connected to a central AI or hub just yet, while eventually we'll see robots that are more capable of doing more diverse tasks (but that are much more complicated).

Integration and Customer Experience

The two biggest innovation challenges then aren't creating the robots or the AI.  These to a great extent exist.  What's important is figuring out how to integrate these and other devices so that they work together seamlessly.  How does an AI operate a vacuum cleaner or even schedule it, for example.  Integration and shared platforms or standards will become important and there is a huge innovation opportunity here.


The other aspect will be completely overlooked by most technology companies, but it's just as vital.  The customer experience of these solutions will also matter.  If you are watching TV and your robot gets you a drink, what's the customer experience you want to have?  Will robots have appropriate bedside manner for the bedridden patients they are asked to care for?  The technologists that design and built AI and robots will want to prove these devices work efficiently.  The consumers using the devices will want a warm, empathetic, engaging experience.  There's room for innovators in that gap. While we'll understand the use of robots and other automated devices in our food service and health care, we'll still want and expect a level of interaction and experience that must be designed in.  Customer experience is still paramount, no matter who or what delivers the service, and getting this right is a real innovation opportunity.

Lately I've been reading about the efforts to build or create innovation accelerators.  Universities, businesses and even cities and regions are talking about innovation and the need to create accelerators or innovation enablers.  I'm glad that everyone is excited about innovation, and that they want to provide the means to help it flourish and help it move more quickly. But the thing is, like most late arrivals, they've got the wrong end of the stick as the Brits like to say.

Buildings, programs, artificial meet ups and other activities that are being put into place as accelerators aren't going to accelerate innovation.  These solutions will accelerate interaction, perhaps, but not innovation.  To accelerate innovation, we need to do a couple of important things that are being overlooked or ignored.

First, describe an important or interesting problem or opportunity.  Most cities and businesses are overwhelmed by opportunities and problems, yet they spend little time adequately defining and describing these problems or opportunities so that innovators can place them in context and begin to imagine solutions.  Rather, we build buildings or create "accelerators" where people work on random ideas that have little importance to the people who built the accelerators.

Second, describe the benefit to the organization, business or community of an incremental change and/or a radical or disruptive change.  What are the outcomes we seek?  Without a clear understanding of the potential end game, innovators and other participants will end up on one end of the spectrum or the other, either creating very marginally different ideas from the status quo, or seeking to overthrow everything and start afresh immediately.  Neither of these is practical or valuable, especially at the start.

Third, give the innovators and entrepreneurs a stake in the outcome.  This is especially true in business settings.  What rationale do innovators have to work on interesting or disruptive ideas if they have no stake in the outcome? We ask them to take risks through the innovation process for a small reward or some recognition if the idea succeeds, and the potential they might lose their job if the innovation fails.  This is why there is far more innovation in startups and entrepreneurial companies and programs than large companies.

Fourth, encourage exploration and experimentation.  Elon Musk can talk about hyperloops and tunnels under Los Angeles because he can afford to experiment and explore new ideas.  We allow successful people and visionaries that freedom. We restrict that freedom from everyone else.  A good example is the difference in startup culture in Silicon Valley and the East Coast.  In Silicon Valley the fact you've lived through a startup that crashed and burned makes you more credible.  In the East Coast it can make you a pariah when seeking new funding.

Fifth, consider who the judges are.  Frequently when incubators, innovation accelerators or other programs or enablers are created, the "judges" of such activities are often the more established leaders in the community.  These are the people who would scoff at Uber or AirBnB, who don't understand texting or emojis, who are uncomfortable with ideas or solutions that upset the status quo.  So they reward and recognize small, incremental ideas that align to existing infrastructure and investments and ignore and fail to fund really interesting or radical ideas.

Finally, don't worry about the money.  If the innovators have any marketing or social media savvy, they'll be able to publicize their ideas broadly and quickly with little cost.  There's enough money around that good ideas and good teams will attract funding, plus, working under tight constraints makes innovators face the real world and forces them to be more creative.  Money will come into play when the idea or solution needs to scale.  Only then will the idea need to move to where the money is - and that's when a business or community will be forced to make decisions.  Startups move to Silicon Valley because that's where the funding is in the later rounds.  If you want to be a real regional player in the innovation and entrepreneurial world, create or foster a critical mass of venture capital, which can encourage startups to stay local. Then perhaps you can build a critical mass.


The focus on accelerating innovation is a good one, but in many cases the solutions are the wrong ones.  Buildings, programs, incentives are all helpful and may accelerate some portions of the innovation process, but the facts above: critical mass, evaluation and judgement, easy exploration and cultural acceptance, clear definitions of the problem or challenge and having a stake in the outcome are most important.

I wrote recently about my last trip to Dubai, and the impact it had on me.  Dubai is unusual because it combines a number of factors - an energetic leadership, a country and region hungry for growth and transformation, a significant investment pool, and a real "can do" spirit.  Clearly things are changing quickly there, and everywhere.  During the conference where I spoke we had several other speakers who were futurists, including Matthew May.  He and others talked about what they believe is about to unfold as we move ever more quickly into the future.

Pause to acknowledge Daniel Pink

I'd like to pause here and tip my hat to Daniel Pink, who wrote a really good book that is becoming ever more prescient.  Daniel Pink wrote a book entitled A Whole New Mind in 2005, and at the time the book had a nice reception.  His key points in that book were that automation would increase, replacing repetitive labor.  Anything that can be reduced to an algorithm will be described, defined and encoded.  If it can be automated, it will be automated.  His further argument was that we needed to be focused on training people in skills that can't be reduced to algorithms.  Dan's book, published in 2005, deserves a re-read at this time, 12 years later, because a lot that he talked about is happening.  People are being replaced by algorithms, machines and artificial intelligence.

Where automation and AI are taking hold

McDonalds, that trusted first employer of many a teenager, is testing automation and robots to take orders, make food and complete orders.  It's possible within a few years that many McDonalds restaurants will be fully automated, finally achieving the original McDonalds brothers goal of speedy, efficient service.  Check out the movie "The Founder" to see how choreographed the original McDonalds were, and think about how those patterns and repetitive activities can be reduced to automation, machines and AI.

While I was in Dubai I was speaking with an executive of a firm that reviewed intellectual property.  20 years ago the firm had hundreds of US lawyers on staff, but shifted these jobs to a large Indian location where hundreds of Indian engineers and lawyers reviewed intellectual property claims and patents.  His belief was that within 5 years algorithms and machine learning would mean that he would not need many, if any, humans to review patents.

Wall Street is under attack as well from automation and machine learning.  Already there are stock funds managed almost exclusively by algorithms and machine learning, and a significant portion of stock trading is already done by software.  Machines can recognize patterns and act far more quickly than humans can - so you can imagine that a significant amount of trading and money management will be automated in relatively short order.

What does that leave for humans?

As automation, artificial intelligence, machine learning and robotics grow in capability, humans doing simple, repetitive jobs will be crowded out.  Robots are much more expensive initially but don't strike, don't get sick and do things exactly the way they are programmed.  They don't get overtime.  So what's left for humans?  Perhaps this will be a golden age - where increasingly we are removed from the drudgery of manual labor and repetitive jobs and are finally freed up to explore the unlimited creativity that we possess but have never been able to fully harness.  There may be far more Faradays and Einsteins in our midst who can fully recognize their creative potential as we are freed from boring, mundane and repetitive tasks.

Pink suggested in his book that the "right brained" people would rule the future. This is because machines aren't artistic or creative - yet.  We humans still possess far more creativity and the ability to assimilate and create in ways that can't be reduced to an algorithm.  We must take advantage of these gifts and differences.

But that doesn't mean that engineers, mathmeticians and scientists are doomed.  Someone will be needed to dream up the next AI, investigate black holes, explore space and perhaps discover how to travel at the speed of light.

What needs to change?  Everything

All of these factors mean that our educational system needs to change, to reinforce creativity and expansive, divergent thinking.  When we needed people on production lines who could do rote work, we taught in rote methods.  Now and in the future we need a completely new way of thinking, that frees up and encourages creativity and innovation.  But it's not just elementary schools, high schools and colleges that must change.

Our traditional hierarchical top down management models, first organized around the military and the railroads, must change and morph as well. We don't need to pigeonhole people into exceptionally narrow jobs, and we need to eliminate siloes and accelerate the best and most creative ideas to market as quickly as possible.  I write this on a day when Ford Motor fired its CEO, even after record breaking sales, because the firm isn't making enough money and its stock price is tanking.  Ford and the automotive manufacturers must shift their thinking from building cars to financing vehicles to providing transportation.

Will we leverage the power and performance of AI and machine learning and automation and robots to free people up to create even more incredible ideas and products - to add value where AI and robots can't?  Will we prepare our children to compete in a world where creativity and divergent thinking become more important than rote memorization?  Can we rethink our business structures and processes to embrace more divergence and creativity?

Innovation and creativity are the lasting competitive advantage, for individuals, for cultures and for businesses.  The sooner we realize that and act on it, the better off we all are.

I've just returned from a trip to Dubai to speak at an innovation conference there. This is my third trip to Dubai, and I come away consistently amazed at what the people and the government are doing in Dubai.  When I return to the States people ask me what Dubai is like.  I joking tell them that I was visiting the future.

In my three visits to Dubai, spanning only a couple of years, the development and progress has been really quite astonishing.  I've had the good fortune to lead innovation programs and workshops in a wide range of countries and regions, from Western Europe to South Africa to South America and in many locations in Asia.  There's no other place moving as quickly and with such purpose as Dubai.

In our event we heard stories about the decisions taken to place Dubai on the innovation map, where the sheikh asked his people to visit Singapore and Hong Kong, places with few natural resources that were thriving.  These insights were brought back to Dubai and I think have accelerated the growth of the region and the city.

Innovation attributes/factors
Dubai has a number of factors that help it move quickly, including the fact that they started from a relatively basic standard of living and moved quickly to become a world class city.  Moving quickly is easier if you have less invested infrastructure.  In a recent article for Popular Science, one of the ministers leading the transition talks about the dirt roads he grew up with, which are now 8 lane highways.  Starting from a very humble base, Dubai has moved quickly to develop its air transportation (Emirates), its port, tourism, health care and other economic factors.  We will watch to see if Dubai can maintain speed and nimbleness as it grows and matures.

Dubai also benefits by being new and small.  It is still a relatively small city-state and as such is relatively nimble.  It has the ability to test and experiment with ideas, governance and technology at a pace that few other larger countries can manage.  As long as it keeps this nimbleness and flexibility, it will remain an innovator. Good examples of experiments and concepts are drones for personal transportation, a potential hyperloop and massive solar investments.

Dubai also benefits from its location.  It sits near a significant amount of oil, much of which is transported through the Gulf, right by its front door. Dubai and the middle east are also the half way point between Western Europe and India/China, making Dubai a natural transportation hub.  And we won't even mention its proximity to Africa, which when it develops will simply mean more transportation and logistics opportunities for Dubai.

Dubai benefits from two other attributes as well.  It has a forward thinking ruler, who has the ability to quickly implement his vision. This forward-thinking trickles down throughout the population.  Everyone seems infected by this vision and wants to know what's next.  There's a real sense of possibility, of seeking to overcome obstacles.  The sense of energy and optimism is pervasive.

Lastly, one of the factors that drives innovation in Dubai is a sense of openness, inclusion and tolerance.  I asked several of the conference attendees what they thought Dubai was doing well, and to a person they all mentioned engaging people of different perspectives, openness to new ideas and tolerance of different people, nationalities and ideas.  To quote the Popular Science article, "the sense of mutual tolerance is palpable, almost joyful". Many innovation commentators have noted that innovation thrives when diverse ideas and people interact in a place that can implement and accelerate them. Could Dubai model itself after Venice in the Renaissance?

Why these factors matter

These factors - tolerance, engagement, optimism, nimbleness, speed, location - all matter for innovation.  Tolerance and engagement mean that the best ideas will be considered, regardless of their source.  Optimism is vital for innovation, because new ideas are constantly failing, and that may become an opportunity for risk avoidance and pessimism.  I was surprised when one speaker at the conference talked about an idea failing and his company starting again.  What was surprising was the fact that the attendees applauded him for failing and trying again.

The government has a very forward looking posture and encourages experimentation.  It's organization and structure will reinforce nimbleness and speed as long as these factors remain top of mind.  Additionally, the government has demonstrated that it will fund trials and experiments that solve key challenges.  Solar farms and desalination programs are underway.


You may think of Dubai as a place for tourism, or to see the tallest building, or to ski indoors on a 100 degree day, and you'd be right.  But don't miss what they are doing to build an experimental platform for innovation as a city-state.  The whole city and government are moving quickly and it will bear watching to see what's next.

May you live in interesting times.  This is supposedly an ancient Chinese saying, replete with both opportunity and a veiled threat.  Interesting times can introduce great new innovations but can also inaugurate great conflicts.  Nowhere is this more evident than the evolving phenomena of autonomous vehicles.

Innovators across the globe, from the large (Amazon, Google) to the small are all working on autonomous vehicles.  Futurists are already predicting the demise of the long distance truck driver, whose job will be eliminated momentarily by autonomous trucks spanning long distances.  Soon, we are promised, we'll commute to work reading our morning papers - except there won't be papers - while the autonomous vehicle takes us efficiently and safely on our way.

If you are reading a hint of sarcasm in the above scenario, you are right.  We are reliving all of the hype about electric vehicles, circa 1991, when California demanded that 5% of all cars would be zero emission vehicles within 5 years.  They may reach that threshold in 2020. The promise and excitement of technology often ignores significant barriers to adoption.

Technology is the answer not the problem.

Thanks to Moore's Law and other advances in technology, we know that the bulky, unwieldy stuff welded onto prototype autonomous vehicles will be miniaturized and made more robust.  This will take time but it will happen if the markets are there.  The costs which are a bit prohibitive today will also fall.  The combinations of big data, real time analytics, sensors, on board processing, all linked to a very responsive processor connected to the engine and drive train will provide a safe and simple journey.  The technology won't be the problem.  But just like the electric vehicle, we'll discover the real barriers to innovation:  invested infrastructure, risk and regulation.

Invested Infrastructure

One of the items that slowed the adoption of the electric vehicle was the ubiquitous gas station.  When you have to carefully plan your trips to swing by electric charging stations, the overhead associated with driving an electric vehicle can be a bit overwhelming.  As battery lives improve and more charging stations are developed, driving an electric vehicle will be more predictable.  But we still face the challenge of deeply invested infrastructure that does not fully support electric vehicles.  And this is a dilemma that innovators always face - they must work within the existing infrastructure and compatibility or disrupt it.  And if they disrupt it they better have a fully operational highly capable alternative ready to go for the masses.  That was easier for Jobs and iTunes than it will be for fueling cars.

The invested infrastructure favors human drivers who are somewhat unpredictable, who must stop or yield at intersections.  The infrastructure favors drivers because we have significant investments in parking lots - where stupid cars wait on their drivers.  Autonomous cars don't require close in parking lots, because they can drive themselves or do other chores rather than sit in the lot.  Existing investments could become catastrophically obsolete when cars are smarter - this means some interests gain, while others stand to lose dramatically.

Risk

The organizations most likely to block rapid adoption of autonomous vehicles are the insurance companies.  We know what human drivers are likely to do in a car based on decades of historical data.  We know the frequency of accidents, the cost of those accidents and so forth.  With an autonomous vehicle there are several challenges.  First, where's the past data to build models on?  We don't have a lot of historical data so estimating and pricing will be difficult.  Second, who is responsible for an accident?  The vehicle, or a subsystem, like the navigation or data processor or the sensors?  Is there joint and several liability?  Third, what are the rules? Will the population revolt if autonomous cars (which are in fact robots) accidentally take a human life, ignoring Arthur Clarke's three Robotic laws? Risk is a terrible thing for insurance companies, and until they can quantify and validate the risk associated with autonomous vehicles they won't create insurance at comparable prices to cars with drivers.  No insurance, no autonomous vehicles.

Regulation

So, here's a question.  Suppose you are driving in Silicon Valley in your autonomous vehicle and you are crossing political boundaries - say you are driving from Palo Alto, where autonomous vehicles have been approved, and you cross over into San Francisco or some other municipality where autonomous vehicles aren't approved.  Given the Byzantine number of local, regional, state and federal regulations and approval bodies, you may never be able to leave your local municipality in an autonomous vehicle.  Existing regulation is often a barrier to any radically new innovation, and it will be with the autonomous vehicle.  Until all the municipalities agree or California and other states provide uniform regulations for autonomous vehicles, they are interesting museum pieces.
Regulations will have to change, and when regulations change there are winners and losers.  The organizations and companies that think they have something to lose - bus drivers, truck drivers, delivery people, etc - will put pressure on their representatives to slow or stall new regulation.

Finally, what does the innovation force to occur

In reality, there's one other barrier to innovation that the autonomous vehicle signals - the required changes once the innovation is accepted.  In reality, once a few autonomous vehicles are on the road, we'd all be a lot safer, more than likely, if all the cars were autonomous.  This would lower unpredictable driving and reduce accidents.  But that means than one can't be a little pregnant.  Either there are no autonomous vehicles or they all are.  Innovations, once accepted, often cause secondary and tertiary effects, and this is another reason there is resistance to innovation.  People can't always voice their concerns but innately they know that new technologies have knock on effects, and therefore they resist new innovations because of the unknown and unexpected consequences.

The knock on effects are both knowable and unknowable with autonomous cars.  Some scientists have speculated that autonomous cars could reduce the need for stop lights, because the cars and algorithms could sequence cars more effectively.  But this sequencing and hive mentality also suggests that a simple glitch or a hack could disable thousands of vehicles simultaneously.  Imagine a huge fleet of autonomous vehicles hit with a "WannaCry" like virus that shuts them all down with no warning.  Innovation offers great benefits but also secondary and tertiary knock on effects that must be understood, especially when human life is at stake.

What this means, generally

The autonomous car has a lot of promise, but some peril as well.  As an innovation, it is a good example of the factors that will block or become barriers for innovation.  Risk, especially when someone else bears the cost (like insurers) will always be a barrier to adopting new innovations.  Regulations will be as well.  The more disruptive the innovation, the more it will upend existing infrastructure and that will cause significant grief to a large portion of the population.  As innovators we must recognize that the value and benefit of an innovation must be measured in proportion to its impact on existing infrastructure, risk and regulation, because these factors can delay adoption.  We must also understand the secondary and tertiary effects of innovation, to understand potential barriers or resistance from those who will "lose" if the new innovation is adopted.


Some innovations, Facebook as an example, didn't encounter many of these issues.  There were few existing examples except printed facebooks at colleges.  There are few regulatory issues and little knock on effects.  However, when you innovate in a space where there is a lot of history - over 100 years of  automotive usage - then you're going to encounter resistance from those who have a stake in the status quo, and from regulation that exists to manage and sustain the existing way of life.  This should lead to a conclusion:  when you choose your targets and opportunities to innovate, choose carefully, because some innovation opportunities are much easier to realize than others.

Everyone's talking about innovation, which could be a good thing.  Except that while they are talking about it, they are often talking about the wrong things, or defining innovation too narrowly, or are too focused on tools rather than outcomes.  Sometimes, rather than doing something they are simply talking.  Talking about innovation is exciting, I'll grant you, because most corporate types don't get to do innovation, let alone talk about innovation.  They eat, sleep and dream about efficiency.  As Andy Cohen said at our conference they've Six Sigma'd the opportunity and then leaned it and then made it agile, then applied Six Sigma again.  Just to talk about innovation is a relief.

But when people talk about innovation they talk too expansively and without good definitions.  Innovation always reverts to whatever Apple did recently, whatever cool new technology or product someone produced.  We need to move beyond talking about innovation to actually doing more of it, and when we do it we need to do it with purpose and intent.  But beyond that we need to move beyond this narrow definition of innovation - a new product or service - to a much more expansive definition of innovation possibilities.

Innovators are like Astronauts

Right now we innovators are like astronauts who become fixated on going to the moon, when with a little more imagination and effort we could go to Mars, or Venus, or the asteroid belt.  We've allowed ourselves to become too enraptured, too fascinated by the possibility of new things, and not aware of or even talking about the possibility of new experiences or services or channels or business models.  There are several problems with the fixation of the near and the safe:

1. It narrows the scope of exploration and discovery
2. It suggests specific tools and outcomes and overlooks or ignores others
3. It focuses far too much effort on far too little potential gain

As innovators we are like astronauts, exploring, going new places, discovering new things.  Some of these discoveries will be valuable and useful, some will be spectacular failures that others will harvest and find the value we missed.  But right now our focus is far too narrow, because we talk about innovation without shared meaning or goals, and we narrow our conversations and objectives without needing to.

Setting our targets too low

To me, we are doing this all wrong.  We are talking about easily achievable, tangible outcomes when we should be considering what the end objective is:  what customers want and are willing to pay for - even to switch providers to obtain.  And in a nutshell that isn't a discrete product.  Customers will change for a dynamic, interesting and complete customer experience that improves their lives, solves their challenges or gives them new capabilities they didn't have before.  When we innovate we should always be asking ourselves: what is the ultimate customer experience our customers need and we can create?  We can leverage techniques like "jobs to be done" but as I've written before I believe this should be superseded by "experiences to be had".  The best technical innovation does not win customers if it does not fit within their expectation or work in their environment or force them to change.  The sooner we start talking about how to deliver an incredible customer experience, in any project or in any setting, the sooner our innovation programs will generate the kind of benefit everyone needs.

We've lost the thread


Focusing too much on Apple's iPhone, or Tesla's car misses the point.  We don't buy the iPhone or the car, we are buying the totality of the solution and experience.  Tesla and Apple are just especially adroit and combining these into one package.  Sure the iPhone is nice, but no better than Samsung or LG.  It's just that Apple has managed to combine services and experiences and business models in a more holistic way.  And this is what we consumers are ultimately buying.  If we were buying a phone we'd buy based on the best reception, or the best coverage.  Instead we buy based on design, integration, style, beliefs about the company, and many other factors that make up customer expectations and customer experience.  This is where innovation should focus - not on the shiny new technology or object - but on the total customer solution and experience.  We must start with this in mind and work backwards to the technologies and component solutions that provide a total experience.  This is the holy grail, and once we understand that innovation will take off like wildfire.

Sorry I've been a bit lax about keeping up the blog posts.  Between an open innovation webinar, a planned trip to Dubai to speak on innovation and a very successful innovation conference, (not to mention some customer work) I've been a bit busy lately.  But it was something I saw at our conference, and something I read today about Target that prompted this blog post.  Because I'm becoming convinced that you can't impose innovation from the top, it only gets exposed through internal cultural beliefs.

Lowe's at the Conference

We were fortunate to have a team from Lowe's (home improvement not grocery) speak at our conference.  This was the second year that a team from Lowe's provided us with insights on the opportunities and challenges of doing innovation in a large, distributed retail environment.  I liked the fact that the Lowe's team talked a lot about customer experience, starting their innovation activities with the customer's needs and jobs in mind, and framing everything based on experience.  In the discussion and Q&A afterwards, it became clear that a lot of Lowe's focus on innovation is cultural, embedded in the culture.  In fact one of our employees who worked at Lowe's while in college mentioned the discussion and how true it was for him - that Lowe's culture hadn't changed in 20 years and that it empowered people and encouraged them to make change and to innovate.

Retail at the crossroads

There's a lot to think about in the retail space, as news stories remind us that we have far more retail space than we need, and even ground-breaking shopping destinations like the leading malls are going underwater as people turn to online shopping.  Destination malls are suffering, and even retail strip centers are experiencing a drop-off in foot traffic.  Look at any strip center near a residential area and you'll see what was once a collection of shops, retail, clothing, food and hardware is now a collection of services businesses (dry cleaning and doc in a box) and restaurants.  Gone are the corner drug store, the corner hardware store, the small clothing boutique.  Whether we are talking about large malls or smaller shopping centers, retail is changing rapidly, thanks to Amazon, Wal-Mart and others.

What happens to Target?

Target, which was once one of the most interesting and unique large department stores, seems caught in a cross-fire.  It was able, years ago, to compete with Wal-Mart because it had better design and more interesting store brands.  It didn't necessarily compete on price but on value and style.  Those days are over.  Further, Target and other big box stores are feeling the squeeze as people are really busy and don't want to drive all over town, when they can order good like dish washing soap and have it delivered.  If you can't compete on quality and design, and certainly can't compete on price (versus Amazon and Wal-Mart) and people don't want the hassle of driving to your stores, what's left?

Target just announced today that its senior innovation leader is leaving so that Target can focus on "core business".  Mark today (April 24, 2017) on your calendar.  This could be the beginning of the end for Target.  It must either 1) improve its product lines and product value (innovation, but they are moving away from that) or 2) get closer to customers (who have already made it clear that they are happy online and don't want to visit stores) or 3) cut costs.  How do you cut costs and compete with Amazon and Wal-Mart?  Target is making a big mistake - it should be moving up market, creating new versions of stores and innovating its in-house brands, bringing value and style back.  Instead we're likely to get a Wal-Mart copy cat and/or a Amazon copy cat online from Target.

Target is removing its innovation capability and focus at the moment it needs it most.  In many companies, innovation is what CEOs reach for when everything else has failed.  In Target's case, either the existing innovation wasn't working, or the CEO didn't see value in the outcomes, but in either case the CEO is working against industry and societal norms.  You can win as a brick and mortar store, but you've got to innovate in order to do so.

Lowe's and Target


Strange that two companies that actually compete in some segments see the world so differently.  Both are "big box" stores that typically stand apart, aren't in a mall but may be in a strip center.  Both are destination locations.  Both have significant and comparable competitors (Wal-Mart/Kohl's/etc) and Home Depot.  Both are taking radically different approaches.  Target lost its way years ago when it shifted its focus away from differentiated products, and the removal of the innovation officer only confirms this.  Lowe's is doubling down on innovation, with a focus on customer experience.  I think Lowe's is tapping into a core cultural phenomenon, while Target was finishing trying to impose innovation from the top.  While I'm not a Wall Street analyst, I have to believe that the investment by Lowe's in innovation will provide value, while Target will founder.