A friend was recently discussing her experiences in having to exercise her Power of Attorney authority over her mother's affairs. In the US, Power of Attorney "is an authorization to act on someone else's behalf in a legal or business matter." Many parents grant this authority to their adult children, to be exercised in the event that they are unable to mentally or physically act on their own behalf.

When she first took on this role, my friend imagined she would be merely assisting her mother to execute the plans that had originally been set forth. She soon realized that financial and legal guidelines and associated paperwork changed much too quickly for her mother to keep up with. For example, a simple request for assistance with an investment account would result in a discussion with the accountant to understand new tax implications of what her mother was trying to do, adjusting the initial request as necessary.

My friend described how the experience was changing the way she interpreted her mother's requests. In order to give her mother what she needed, she had to learn to look beyond what her mother asked for. And in order to preserve her mother's dignity, my friend needed to learn to discuss issues with her mother, listen to her direct requests, understand what she was trying to achieve with each request, and then translate those requests into the current procedures required today.

Sound familiar? All companies act on behalf of their consumers as they strive to produce products and services that are of value to them. In essence, they exercize Power of Attorney authority in every product development decision they make. How many people involved in the development process take their roles as seriously as my friend does when they are making those decisions? Hopefully, the answer is that they all do.

In the last couple of months I've found myself recommending Steven Kerr's article "On the folly of rewarding A, while hoping for B" several times, and felt I should share it more broadly.  It's a classic (1995), and is short, sweet, and always worth the reminder.

I'm reminded of this when I see a friend of mine struggling with launching a new product to market.  He is rewarded for successful launch of new products.  His manufacturing counterparts, however, are rewarded for delivering the lowest cost, fully optimized products that can be produced.  Their metrics are the same for new products as they are for existing products.  I asked whether the manufacturing group could be rewarded differently for new products, maybe being measured on fewest number of days to make a new product.  Of course, my friend was quick to laugh at such a suggestion.

Clearly we can see the waste that is created in the system here, and the unnecessary hurdles that are put in front of the innovation goals the company says they want to achieve.  And of course, the manufacturing group doesn't want to be the reason why their company is less successful at launching new products than their competitors.  But with the current system in place, this is surely what will happen.

Reward systems are one of the easiest things a company can change, and they are often the last thing that a company recognizes should be changed.  And because the development cycle often carries the burden of different reward systems that have been developed in individual silos, the true consequences of changing one reward system can be difficult to assess.  In addition, companies may be better served by creating reward systems based on end results than by discipline.  In my friend's case, everyone who is responsible for launching new products needs to be rewarded to make that happen, and not by discipline.   

If your company has clearly stated its desired innovation goals, and is having difficulty launching new, consumer relevant products, look at the reward systems in the development process.  Don't look only at the obvious rewards.  Really dig into the whole system and look for any inconsistencies.  I'm sure you are getting exactly what is being rewarded.

Interesting article from IMD on why small companies have an edge over their large company counterparts in driving innovation.  The point I found most interesting is that they point to psychological safety as a necessity to foster a culture of innovation.  They define psychological safety as "the assurance that if you have an idea and explore it yet it fails, you won’t be fired or penalized for it."

Most organizations understand that it is important to accept failure in innovative cultures.  But how do you send a clear message to the organization about what type of failure is acceptable, and what type of failure is not acceptable?  No one wants to reward people for not being thorough, screwing up, or being lax.  Stating this fact seems obvious, but in practice it can become quite muddy.  What do you do if an engineer perfects a new technology that has no relevance in the market?  This is what can happen when companies try to encourage failure by creating sandboxes that can be tangibly measured.  For example, each group or person gets a budget of $x to spend on exploration, or (as Google famously states) each person has 20% of their time to work on whatever is of interest to them.  Yes, a random breakthrough may occur, but these metrics are meaningless if they are not tied to innovation goals.

I believe that the leadership of an organization bears the responsibility of defining the goals for value added innovation.  By this I mean that they need to define the business the company is in based on what benefits they provide to the market.  When this is very clearly stated, (as is usually the case in a small company) people know what challenges are set out before them.  They will then find ways to cut through silos, form groups that consist of people with diverse skills, and be able to tell when one path needs to be abandoned for another that's more promising.  These "failures" will be good failures because they won't look or feel like failure at all.  The goal will be greater than any one execution which removes the burden of failure from any one task or series of events.

In my opinion, the only real failures happen when leaders do not take on this responsibility.  They reorganize to remove silos, give up some money, free up some time, and sit back and wait for magic to happen in a vacuum.  If this is what happens in your company, think about what you can do to set market driven innovation goals.  Otherwise you risk rewarding real failure.

Individuals and organizations have one thing in common.  We all must carefully balance the time and energy we spend attending to the things that are important, and the things that are urgent.

What's important are the activities that keep you true to your mission.  Who you hire or choose to work with, how you contribute your talents, and how you solve the needs of your market are all important things to consider.  Your choices about them have long term effects on whether you will achieve your ultimate goals.

What's urgent are the activities that sustain you in the immediate future.  How you pay the rent, get the funding, or respond to external changes are all urgent issues that must be resolved along the way.  They are like bumps in the road, and your choices about how to manage them can also have long term affects on whether you will achieve your ultimate goals.

We all must attend to important and urgent issues, and how we balance them will determine our ultimate success.  For example, an entrepreneur may tweek a business model to ensure their company will get funded.  If they tweek it to the point that it is a different business altogether, they have gone too far.  It seems that those who go too far are lacking clarity or vision of their ultimate goals.  They end up becoming a product of the external forces that they have allowed to shape them, and their reactions are driven by panic and fear more than vision and mission.

Today we are seeing unprescedented panic and fear that can shatter our ability to achieve our economic and social goals - if we let it.  This current bump in the road should change the way we do business, but we should not let it change our business.  Yes, we need to innovate, and I believe that the innovations that will add the most value will come from those who clearly define what's important - and decide to make it urgent.

For the last few months, I've been fortunate enough to be a participant in Seth Godin's online experiment - Triiibes.  This is a learning community, (currently, membership is by invitation only) and participants are actively exploring questions about the future of markets and marketing, and the forces that are changing the competitive landscape.  It has been a companion experiment to his latest book:  Tribes - We Need You To Lead Us.  I have learned enormously from the experiment, and offer thanks to Seth for starting it, and to the fellow community members for their participation and enlightened perspectives.

This week, Seth launches the book at an event in New York City.  It offers a new perspective that the future of successful marketing lies in the ability to create, connect and lead tribes.  Why is this important?  Because as innovators we need to learn to rally support from within our companies, our clients, and our peers.  Without the support we need from others we cannot succeed. Without strength in numbers, what we are doing is too scary for most people to support us.  We need to acknowledge their need to belong and believe in something greater than they can imagine today.  We do this for a living, and it's our responsibility to show the way.

In addition to the book, Triiibes - the online community, has collaborated on an ebook of tribal case studies.  Each one discusses elements that get to the heart of what makes tribes successful.  It's available to download for free, and I feel fortunate to have had two case studies selected for inclusion. Download, enjoy, and share!

updatedtribescasebook.pdf (2.97 mb)

I was looking over the last few blog posts and realized that the real purpose behind many of our innovation processes is to help us to work around traditional corporate reward systems.  Defining Active Thinking is a way to ascribe value to a process that many clients undervalue.  Brendan commented that mind-mapping tools are useful because they help to make thought processes more visible, and what's visible is more likely to be rewarded.

Organizations have good reasons for rewarding tangible, predictable processes.  Their main businesses typically revolve around providing high quality, consistent, relaible products or services.  The problem arises when they apply the same reward systems when trying to innovate.  If you haven't read Steven Kerr's article On the folly of rewarding A, while hoping for B it is well worth taking a few minutes to review it.  It's old, but the message is still fresh, and is something that is consistently overlooked.

I do believe that our tools and processes for innovation are useful. It is important to make the innovation process as consistent with our clients' processes as we reasonably can.  If it's too foreign or scary then innovation will never happen.  But sometimes the fit is just too forced.  In those cases, we may be better served to point out the obvious, and define a reward system that will enable the right work to be done.

I was reading a discussion yesterday on a closed site I get to use where it was mentioned that perfectionism is what often holds people back from achieving their goals.  When I think about this in terms of the Active Thinking concepts we've been discussing, I think perfectionism is a contributing factor when there is difficulty with this activity.

This doesn't mean that individuals are necessarily perfectionists, but most organizations reward getting right answers.  The very nature of Active Thinking requires that the team discuss many potential answers that end up being wrong.  By the end of the project, more wrong answers have been discussed than right answers.  This goes against the grain of most organizations, which in most cases is a good thing.  We want to ensure that a company is good at producing reliable products.  But when used at the wrong time it can kill innovative solutions before they have time to mature.

I was managing a team once that was having a very difficult time getting started.  We did a lot of consumer research, and the discussions were swirling around which frameworks would lead us to the answer.  The team was very reluctant to just try a few and discard what wasn't working.  No one wanted to be wrong.  So one day I asked everyone to bring their worst idea to the meeting.  Each team member was asked to present this idea and why it would be the worst thing we could possibly do.  We then guided the discussion toward what it would take to make each idea "less wrong."  This process required us to state our assumptions, question them, and build new constructs.  We were finally on our way.

What I learned is that sometimes the best way to change direction is to exaggerate the direction in which we're already going.  Since everyone was afraid to be wrong, we made being wrong the only way to complete the assignment correctly.  Sometimes being wrong is the only way to be right.

I have to clarify a point made in my last post about taking time to think.  I mentioned that clients tend to get nervous during the point in the project when they don't perceive that anything is happening, and that in fact, this thinking time is the most important part of the project. 

What clients fear is that this time is spent truly doing nothing while waiting for inspiration to strike.  I agree that this seldom works.  What I'm talking about is what I will call Active Thinking.  Louis Pasteur's quote "Chance favors the prepared mind" is relevant here.  Inspiration may in fact strike, but the only way to know if the inspiration is useful is to have done all the active thinking work necessary to prepare the mind to recognize its value.

When I refer to the active thinking part of the process, what is happening is that the team is creating the conditions necessary to prepare their minds for the solution.  They make models, try out analogies, and create frameworks, stories and scenarios.  They discuss these models, test them against their research, and keep going until they have something robust.  By this point, they are able to discern what will work, and what won't work quite easily.  When an idea strikes them, they are able to discern its value quickly, and either embrace it or move on.

I'm going to start using the term Active Thinking.  It's clear that there is a need to define this most important part of the process so that it's not confused with goofing off.

This video "The Process" is a great illustration of Monday's post.  Thank you Katie for sending the link!

http://www.todaysbigthing.com/2008/07/23

Enjoy!

Who is responsible for innovation in your organization, and how do they ensure that it happens in the right way for your company?  Not surprisingly, the answers to these questions vary greatly.  Here are some of the most common answers I've encountered:

• Everyone is responsible for innovation, because good ideas can come from anywhere, and people need to be empowered to bring them forward.
• The Head of R&D, because we need to be developing new technologies that can drive our success in the future.
• The Chief Innovation Officer, who is responsible for forging relationships with technology partners and developing new processes for the organization to integrate them.
• The Head of New Product Development, because innovative ideas are embodied in new products and services.

Of course, there is no single right or wrong answer, as every company is different.  What is striking is that the main focus of these roles is on collecting new ideas and technologies.  I seldom hear of roles that are focused on determining the success criteria for new ideas and technologies beyond internal metrics.

Today I will leave you with a few questions that I'd like to explore further.  How many organizations drive innovation efforts based on success criteria that satisfies consumer goals?  By consumer goals, I mean understanding the motivations behind what your consumers do.  What needs does your product or service really satisfy?  What would provide a better solution and fit more consistently into the consumer's life? 

Finally, who is responsible for ensuring that your organization has the right answers to these questions?