In writing the Innovation and Neuroscience chapter, I was surprised to learn the extent to which our brains are "wired" in a way that is conducive to innovation.  In Professor William Duggan's book Strategic Intuition, he explains how the neuroscience field is revealing some interesting insights into how new ideas are created.  He cites several important works that do two things:

They debunk the long-held idea that the two halves of the brain are either creative (right brained) or analytical (left brained).  Everyone thinks with their whole brain.

The process of solving a problem is based on the idea of "Intelligent Memory", whereby the brain selectively searches stored memories in an answer to a problem. 

What this means is that our brains are "wired" to seek out relevant solutions to posed problems without bias as to whether they are creative or analytical.  This supports an idea that I have long held that random idea generation is of little value in the innovation process.  If we want to find new ideas that are useful, the most important thing we can do is to do the hard work of clearly defining the problem we are trying to solve.  This is easier said than done, and honestly, where the bulk of the work in innovation needs to happen.  We've all had this experience.  Once we struggle with finding a new solution, when we are able to reframe a problem it seems to solve itself.  This requires us to let go of our initial perceptions about our innovation goals, and when we allow a new perception to emerge, then the problem can be defined differently, allowing a new solution to follow.

This then leads to the question of how we know a problem or solution is right.  When random idea creation comes to a close, the ideas selected are often the ones we already know are right.  How do we know when a new idea could also be right?  Dr. Robert Burton focuses on this question in his book On Being Certain.  In that book, he describes the mechanism for how we know what it is that we know.  This post won't do the details justice, but suffice it to say that Burton and Duggan build on the same recent neuroscience research, and although they have a different focus, their work is highly complementary. Both of these thought leaders emphasize the importance of intentionally directing our mental focus on our specified goal.  Both of them also recognize the importance of being able to let go of an initial perception so that the brain is free to fully explore new connections.

When it comes to establishing a process for innovation, it is important that we establish conditions that enable our brains to a) know what we are truly searching for and b) allow them to search our memories freely and "intelligently". When I was researching the topic to write the chapter, it made me think about how modern day management techniques can actually be counterproductive for innovation.  I see organizations either micromanage or over-prescribe a solution, or go the opposite direction and allow random idea generation into the process.  Neither way will work.  In the next post, we'll look at some specific ways we put up mental barriers to innovation.  For now, start to become conscious of how you are thinking about a problem, and how you are establishing criteria for success.  Try to make sure your initial goal is to define the right problem, not prescribe a type of solution.

By now it seems to be common knowledge that when talking about Innovation and New Product Development, the Fuzzy Front End is where the magic happens.  However, I've come to the conclusion that it's not that way at all.  All the fuzzy magic people are talking about really happens in the middle. Here's my logic.

Let's assume that the true beginning starts with the identification of an opportunity.  This typically happens from observing the environment (let's say this is the market, but it could be any context), and deriving the reasons why the environment behaves the way it does.  In the consumer world, this is where we derive the consumers' motivation for their behavior.  The goal is to to take this knowledge about what motivates the market, and translate it into a viable product or service that will satisfy motivations better than the currently available alternatives. In other words, we want our consumers to love us so that we can crush our competitors.

Yes, it does take work to derive a consumer's motivations from their behavior.  It also takes work to come up with a creative solution in the form of a product. But what happens in-between the two steps?  Consumer motivations may be real, but they are very intangible, and in their pure form they are not satisfactory product requirements. 

What's required in the Fuzzy Middle is the translation between the two worlds.  It's almost impossible to make a direct, linear link between the attributes of a caterpillar and those of a butterfly, but what goes on in the chrysalis is what I'm talking about.  That's the Fuzzy Middle.  In the product development world this is a very confusing, scary place. Most companies are designed to optimize the manufacturing process. Developing something new goes against the grain.  Market research often happens in companies, but that's because the specific activities involved can usually happen without disrupting the manufacturing process.  But when we try to implement what we learned the antibodies come out in full force.

In order for companies to innovate in truly meaningful ways, there must be a place where the Fuzzy Middle can survive and thrive.  This is difficult because it combines simultaneous measures from both worlds.  It's where new ideas are developed, concepts are refined, and business models are born in order to satisfy new opportunities.  It's where research is simultaneously generative and evaluative; product concepts are often developed to generate new information, not to be manufactured. They are evaluated based on how well they deliver an experience, and how well they help us to define success criteria for final products.  It's where there is more than one right answer; but there is clearly a difference between right answers and wrong answers.  It's where the balance between the competing points I just mentioned must be rediscovered for each new project. There is no clear, repeatable model or process to get from one side to the other. 

If that doesn't describe fuzzy, then I don't know what does.  If the above paragraph makes no sense to you, then you probably spend your days on one side of the fence or the other. If you're smacking your head with the sudden realization of why you've been so frustrated lately, then it's likely that you've been living in the Fuzzy Middle without knowing it.  This isn't hard to do, since most companies sort of shut their eyes and muddle through hoping they get out alive and with an acceptable product intact.  Instead, rather than pushing through to get to a defined product as quickly as possible, try using the Fuzzy Middle to translate intangible opportunities into tangible solutions in a deliberate way. Work to embrace ambiguity of multiple right answers while driving out the uncertainty of not knowing the different between the right and wrong answers.  These ideas may be difficult to grasp, but if you do nothing else, just try to recognize the Fuzzy Middle that's passing through your development process - and enter the chrysalis...

Last week I attended the International Society of Professional Innovation Managers (ISPIM) conference in Barcelona. I had never been to this conference before and had no idea of what to expect. I had decided to attend because they had accepted a topic I had submitted to present. I welcomed the opportunity to speak about translation (more on that later), but I was also curious about this group that had been in existence for so long that I had known so little about.

The first thing I'll say is that the conference was excellent. Next year it is in Helsinki, and I'm pretty sure I'll be going back. It was formally founded in Norway in 1983, as the result of an initiative by Prof. Knut Holt to study Needs Assessment and Information Behavior (NAIB) as a way to inform the innovation process.  Why it had never crossed my radar before is a mystery to me, but the membership is largely European.

The conference is a nice blend of academics and industry people, many of whom give presentations on interesting work they are currently doing. It was very different from the Front End of Innovation conference held every year, which seems to be the "go to" innovation conference in the US. Unlike the FEI conference, ISPIM was not filled with semi celebrity key note speakers. It was much smaller and had a much larger percentage of attendees presenting their ideas. As a result there were few if any people there on corporate boondoggle trips, and the experience was extremely rich and engaging. It was not for anyone who wanted to sit back and be informed or entertained. Here are some key  ideas I took away.

It was refreshing to be with a group of people who understood that good ideas are developed and inform new offerings, rather than expecting fully formed products to pop up from brainstorming sessions. In fact, brainstorming wasn't mentioned once in three days, even in sessions on creativity and ideation. Did I say refreshing? Yes!!

As can be expected, large companies are lagging in terms of developing very innovative offerings, as well as incorporating innovative ways of working. The few who stood out were General Mills, who acknowledged the challenges in getting a huge company to work in new ways, and focused the presentation on how they are doing it.  A great presentation from Sara Lee focused on how following the consumer too closely can get you into trouble. This wasn't a new idea, but they offered a very good example of a product that failed as a result of getting this wrong. It was a very humble and gutsy presentation.

I was surprised at the number of national governments that are sponsoring projects between academia and industry in an effort to spur innovation. There was a lot of very progressive work being done through these collaborations. One of these ideas is a tool called Living Labs. I thought this work was very interesting and will post about it separately. The government of Norway is funding similar projects which seem to be gaining a lot of traction.

The idea of Design Thinking was alive and well, and I knew i was in good company when all but maybe 1 or 2 people felt that the term was problematic  in terms of furthering the intended goals. I saw more great examples of the principles put into action than I have ever seen come out of the design community in the US.  More on that topic later as well.

Speaking of Design Thinking, the Australian government really blew me away with a presentation of their focus on learning about the needs of their constituents to develop new solutions to existing problems. They started with a simple project in the tax department, where they learned that many people don't file their taxes, and audit rates were high because people had a difficult time understanding what they needed to do. Tis resulted in a first step in redesigning the tax forms.  Sounds simple, but the result of redesigning the forms to meet the needs of the people who actually used them has been a huge success in solving the problems. They are now progressing to use this process to influence policy development. It is helping them to transcend the party driven method of policy development. (I don't know about you, but I can think of another government that would benefit from a new method of policy development.)

As far as my work goes, I presented the concepts of translation that I've been working on lately. More on that topic later as well, but the idea that people respond go product attributes in predictable ways, and that they can be deliberately worked into the design of an offering to make it more consistent with a consumers needs was new to many people. I walked away with several connections that I hope will lead to collaborations about how to define the skills possessed by people who are good at doing this type of translation.

As you can imagine, there were many, many more things I took away, but these are just a few of the top lines.  The conference was very well organized, and I came away excited about the ideas and connections that I'm sure will blossom in the next year.

A friend of mine, Alicia Arnold, wrote a new book which will be published in August titled Creatively Ever After; A Path to Innovation. She sent me an advance copy, and there were several things about it that I felt were excellent.

Alicia makes very clever use of nursery rhymes as a non-threatening way to introduce commonly experienced business problems.  In the book, the main problem centers on Jack and Jill's desire to come up with an innovative way to get down the hill with a pail of water - without falling and tumbling down.  Many businesses encounter this type of challenge as they try to develop new solutions to achieve their goals. 

This simple analogy carries through the book in a very engaging way as Jack and Jill experience many of the common pitfalls that companies face during the innovation process.  It then introduces a structured process for creativity called the Osborn-Parnes Creative Problem Solving Process (CPS).  Personally, I'm not a fan of structured, facilitated, processes as a way to solve new problems.  However, I do understand that some people, (either very linear thinkers, or those in companies that do not reward deviation from the norm) will often need a structured process to break out of ingrained patterns of thinking.  In that sense, as long as the process focuses on exploring ways to identify the right problem before exploring solutions it can work.  CPS does that.

As Jack and Jill's journey to find a new solution continues, the problems identified and the ultimate solutions developed are ingenious.  It is a great example of how any challenge can be overcome by thinking differently.  While the book does follow the CPS process to achieve that goal, it can be clearly seen that the process alone is not what solves the problem. (This too is a common pitfall that many companies run into.) As new characters are brought in to assist, they are chosen for specific skills that are relevant to the task at hand - the task being to think differently.

They say "It ain't easy being easy", and this book, with it's engaging, entertaining story that can be read in about an hour surely couldn't have been easy to develop.  But it is this accessibility that makes it a great tool for anyone trying to get their organization unstuck. This is not one of those books that will be handed out that no one ever finds the time to read.  It's something that parents could enjoy with their kids, with each one getting tremendous value from it.

Well done Alicia!

A couple of weeks ago I was given an advance copy of a new book called The Other Side of Innovation: Solving the Execution Challenge, by Vijay Govindarajan and Chris Trimble, two faculty members from the Tuck School of Business at Dartmouth.  The publishing date will be September 2, 2010.

I'll start by saying that this is one of the most useful books on innovation I've read in a long time.  I want all of my clients to read it.  A few months ago, I wrote a post cautioning business leaders against expecting innovation to happen within their development processes.  In this book, the authors focus on this point, and provide clear guidance for developing innovative ideas that cannot (or should not) be developed within the existing development process.

The book is broken into four main parts:

In the introduction, the authors provide some good background information to help the reader to discern whether or not a new idea should be developed within the current development process, or whether a new process should be created.  They use clear examples, and illustrate which types of ideas the current processes should be able to handle, and show examples of companies that have executed both within new and existing processes.  In this section they also lay the groundwork for their basic premise that managing innovation is not a wild, maveric process.  It is a controlled, disciplined process that just happens to look very different from managing the day to day business.  The rest of the book discusses how to create and manage the new process once it is determined that the innovation cannot be developed within the existing process.

The next two sections present the heart of their recommendations for executing innovation.  The first section contains three chapters discussing how to build the team.  They call the team charged with developing the new innovation the Dedicated Team, and clearly point out how this is different from the team that is charged with managing day to day development, called the Performance Engine.  These designations are very useful, and the authors do an excellent job of describing how the two teams need to collaborate, how to select people for the Dedicated Team, and how to manage the partnership between the two.  They also make a nice distinction between the responsibilities and challenges the leader of the Dedicated Team will face, and the role of the senior executives who need to support them.  What I found particularly useful is that they identified just about every "pink elephant" that could be in the room when discussing these issues, and this book could be used as a guide to foster objective discussions about potentially sensitive issues.

The second of the two sections discusses the management of the innovation initiative itself, referring to the work of the Dedicated Team as running a disciplined experiment.  These chapters provide an excellent resource for illustrating how the work of executing innovation is very different from the work of the day to day development process.  It discusses performance metrics, and how Performance Engine metrics will be harmful to the execution of innovation initiatives.  They present an enlightening way to talk about planning, acknowledging that plans for innovation initiatives can only be based on assumptions.  The goal of the process is to focus on learning, considering the initial plan as a hypothesis, and adjusting it as more information is learned.  They also discuss the fundamental difference between this approach and the Performance Engine approach, which is to focus on results and adherence to plan.  Again many "pink elephants" are exposed as the authors point to the many ways it is easy to fall into the trap of using Performance Engine metrics when evaluating against assumptions.

The final section is the conclusion, and here the authors share several innovation myths, many of which center around one main idea.  Managing the innovation process is not the result of people breaking rules, creating crazy ideas, and throwing things against the wall to see what sticks.  This is akin to what I would call running a casino inside your company.  Instead, managing innovation requires just as much discipline and rigor as managing the Performance Engine.  In fact there is no room for running on autopilot, as the team needs to be on their toes constantly to evaluate what they are doing to see if they are getting closer to their goal.  The authors do a great job of calling out and dispelling these myths repeatedly throughout the book, and it's nice to see them listed out at the end.

Finally, this book is clearly for people looking to manage the execution of innovative ideas to make them real within an organization.  It is not for people who are looking create new ideas.  In fact there was only one statement I disagreed with, and it came at the end of the book.  As the authors were reiterating their point that innovation cannot happen without disciplined execution, they correctly point to the fact that most organizations focus most of their innovation efforts on the Big Idea Hunt.  They then say that the Idea Hunt may be serendipitous and difficult to manage, but that this random nature applies only to the Idea Hunt.  Here I strongly disagree.  In my work, I apply similar principles and discipline to the Idea Hunt.  What this tells me is that regardless of whether you are trying to create new ideas, or develop the most promising ones, developing innovative ideas is anything but random and Govindarajan and Trimble have presented an excellent guide for how to execute them.

I was recently asked to contribute a short piece to the blog section of a new website - OnInnovation.  It's sponsored by the Henry Ford Foundation, and is intended to collect insights from innovators and thought leaders, and enable people to connect with their ideas.  I thought it was a great idea, and one worth supporting.  Below is an intro and link to my post:

Preserving Dignity to Drive Creativity
Posted August 10, 2010
We’ve all had the nightmares in one form or another.  You find yourself at a podium and you forgot what your speech was about.  Or you are at the office and realize that you aren’t wearing any pants.  These nightmares are powerful reminders of our deep seated fear of exposing ourselves to the judgment of [...]  Read Complete Post

I'd love to know what you think of the site.  Does it have legs?

I was recently reminded of the "hit rate" for investment in innovation (I'm also including entrepreneurial ventures here).  Most companies, VC's and others use estimates as rules of thumb.  An optimistic one is something like 1/3 of their investments will be winners, 1/3 will break even, and 1/3 will fail.  Others are more like 1% will be wild successes, 2 - 3% will do OK, and the rest will fail.

What's interesting to me is that most people accept these rules of thumb.  The reason why this is interesting is because this means that for the most part, people buy into the idea that the likely success of a new venture is largely random.  And yet there is a lot of money being spent on market research, market testing, basic due diligence, etc. before deciding to pursue a new opportunity. 

Clearly, there are forces at work that the current business community and education system do not yet recognize, let alone support and develop.  Steve Jobs' success at identifying and developing winning ideas may be intuitive, but it is not as if he is a magic person with a crystal ball.  He is just an example of someone who naturally has the ability to connect underlying market motivations with new and different offerings to satisfy them.  I'm sure there are others who have this natural ability, but if they do not also have the desire or skill to be the CEO of a large company, then the output of this ability will not be as apparent. 

There is a lot of talk about the "new economy", and how the skills that got us through the industrial age will not work to take us forward.  And yet we are so entrenched in nurturing the skills necessary for success in the industrial age, that we no longer remember the fact that it took a lot to get people to focus less holistically so they could work more efficiently within the required corporate silos. 

Success in the future will require that we recognize, develop, and nurture the ability to think holistically; to be able to see similarities in ideas and objects that appear dissimilar on the surface.  This is what is necessary to make a connection between an underlying motivation, and developing a new solution to satisfy that motivation.  In my opinion, the current "rules of thumb" tolerate a lot of waste in the system.  I think we can do better.  Until then I'll continue my work in helping to build a linear path for organizations to reduce the random nature of their innovation investments.  It seems that it's currently the only way for the people who can think like Steve Jobs, but are not Steve Jobs, to make their ideas heard.

This all makes me wonder about two things.  Will we ever get to the point where most of us can spot the difference between a good creative idea and a bad creative idea before we invest in developing a product to see real market results?  And will we ever get to a point where people will recognize the limitations of linear logic, and use it in good balance with more holistic logic?

I've been talking to some people in the software industry about innovation, and we were comparing my innovation and development processes to agile and waterfall development processes used in the software industry.  At first glance, I thought it was a straightforward comparison; that the innovation process I describe is analogous to the agile development process, and the development process I describe is analogous to the waterfall development process.  After thinking about it more, I realized that it wasn't so simple.

The similarities are that the innovation process and the agile process are both iterative, while the development process and the waterfall process are both sequential.  In fact the development process I describe the waterfall development process used in the software industry are very similar, and work well when a process is known, needs to be repeated, and it's important to optimize it.  As I described many times, the system falls apart when companies try to innovate beyond incremental improvements when using this process.  The problem in the software industry is that the waterfall process is too often used to develop very new products.  As a result, people spend time trying to estimate very detailed steps required to develop something new.  However, if it's completely new, these steps are often unknowable.

While the development and waterfall processes are similar, I realized that the innovation and agile processes are only similar in that they are iterative.  The main difference is that the innovation process as I describe it is used to figure out what new products and services should be developed.  It requires a deep understanding of the market, and the ability to translate market needs into criteria for a successful offering.  On the other hand, the agile development process is an iterative way to develop an offering that has already been defined.  What is not known is the best way to develop the offering, because it is the first time it is being developed.  The future is uncertain, and this process acknowledges that as long as progress is made toward a defined goal, the correct steps will be taken at that time.

This also points out why many companies may fail to develop breakthrough innovations even though they are working with iterative processes while they develop new offerings.  Ultimately, development processes of any type are best used to develop defined offerings.  You can't "develop" your way to a breakthrough.  That can only be done by understanding what motivates the market, and translating that motivation into criteria the development team can work with - whether they iterate it or not.

In my last post I discussed four dimensions of innovation. Innovation is a very broad term, and impasses in understanding often result when people are using similar terms to describe very different things. In summary:

Innovation for Optimization - Creating and developing new ways to manufacture and deliver existing offerings to the market.

Innovation for Improvement - Improving the existing offering as it is perceived by the market.

Innovation for Invention - Developing new offerings that will deliver known benefits in ways that are currently unknown, but ultimately more relevant to the market.

Innovation for Disruption - Developing an offering that changes the competitive landscape of the market.

In distinguishing between different dimensions of innovation, we can begin to see that working to achieve the goals of each type of innovation requires very different types of problem-posing and problem-solving skills.  This also results in the need to make sure the innovation process itself is conducive to the work that needs to be done.  Let's think about how the process may differ to best enable each Dimension.

If we think about the first two Dimensions - Optimization and Improvement - the similarity is that the criteria for a successful is already defined, and the benchmarks are well established.  With Optimization, the goal is to deliver the same offering that has always been delivered.  Success can be easily measured.  With Improvement, the offering is different from the existing offering, but the existing offering is used in comparison and as a benchmark.  Since both of these Dimensions can be compared to what the company is currently doing, the existing development process is probably fine for managing the work.  Yes, issues arise when teams try to introduce levels of variation in Improvement projects, but most often, the process itself will dictate how far the variation can stray from the norm. 

In most companies, Innovation for Improvement is about as far as they can go in developing something new.  That's because that's the limit of most existing development processes.  If they can even attempt the second two Dimensions - Invention and Disruption - they struggle with them at best.  Think of the large corporations that spend lots of money on blue-sky R&D, open-ended market research, and open solicitation of new ideas that have a difficult time getting a new invention or disruption out the door.  That's because the existing development processes are not equiped to handle such a great variation on the theme.  Different processes are necessary to achieve the goals of the Invention and Disruption Dimensions.

So what does a process for Innovation for Invention and Disruption look like?  While the details may vary, there are some basic components that are necessary:

The main goal of this process is to define the criteria for a successful offering.  Just as Innovation for Optimization and Improvement start with a benchmark, it is equally necessary to know how to tell if we've done a good job.  This criteria is more fundamental than a benchmark, and is often described in terms of market motivation as expressed as an opportunity that informs all the other business disciplines. (Notice that it is not a fully formed solution. It needs to enable multiple solutions, and transcend specific technology solutions.  It should guide the development of new technology, not be a result of it.) Once this is in place, the other components follow:

It is not random.  Just because existing benchmarks are not relevant, that does not give license to just make things up.  This does not mean that everything needs to be linear, quite the contrary.  Non-linear and random are not always related.  If you've done a good job of creating the success criteria this will become obvious to the right people.  Which leads us to people:

The people need to have strong problem-posing abilities.  Too many random solutions live past their useful life because of a lack of problem-posing abilities in an organization.  In this process we must first pose the right problem, the solution to which will satisfy the success criteria.  This will then set the stage for any problem-solving activities.

The team should be multi-disciplinary.  Although people must first be selected for problem-posing abilities, they should also come from different disciplines.  This will help the team to avoid blind-spots, as well as ensure that the opportunity is translated accurately to the rest of the organization.

It must feed a development process.  Development processes are good at delivering an offering to the market.  The opportunity must be defined in such a way that the following development processes is informed, but not spoon-fed.  Therefore it is good to have some crossover people from the development team involved in the innovation process, as well as have some innovation team members move into the beginning of the development process.  Think of a baton hand-off in a relay.  It's not an abrupt hand-off at one point in time, but a gradual ramping up and down of the team members doing the transition.

These are the most important aspects, and I'm sure more points could be added.  But the important point is that this process is different from the development process: It is comprised of people with different skills, has different goals and outcomes, and should not be force-fit into an existing development process.  When people at your company talk about innovation, stop and think about defining what type of innovation is really needed, and then make sure the right process is being used to realistically enable it, and outsource it if you need to. 

We hear a lot about the need to break down silos, to look outside of the usual venues for innovative ideas, and to embrace new points of view. In this day and age, we have access to more information from more sources than ever before. At first glance, it would seem that the task of collecting different ideas and points of view would be easier than ever.

Unfortunately it doesn't always play out that way. Because there is so much information out there, the new challenge is in filtering out what is relevant from what is not, and this task is as daunting as finding new information used to be. Think about this the next time you search for information. How are you determining the relevance?  What are your filters? I do believe that people need filters to help them to cut through all the daunting information out there.  However, what I'm finding is that it is now the filters that are limiting the diversity of the ideas and points of view, rather than the desire to seek out what is new.

Filters are useful to the extent that they are used to focus the mind to recognize relevant information. But how often do you notice when people are using irrelevant filters? For example, if a certain author or expert provided useful information in the past, their point of view may be less likely to be questioned in the future. It becomes a shortcut that is intended to save time, but can result in blind following and group think. As I've said before, there is no excuse for not thinking about what you are doing. Especially in the realm of innovation, every problem is unique and a new filter must be created for every query for new information. This doesn't need to take a lot of time, but it does require that you stop and think before blindly accepting or dismissing new information or sources.

What filters are you using as you make decisions about new ideas or points of view? If you ask yourself if they are relevant to your current task at hand, you may be surprised at your answer.