We are too afraid of conflict at work and that is why we often get what Margaret Heffernan calls Willful Blindness. Watch her explain the concept on this video
We are too afraid of conflict at work and that is why we often get what Margaret Heffernan calls Willful Blindness. Watch her explain the concept on this video
Here is the list of the 40 Most Exciting Innovations of the Year as chose by Tech Insider. It contains some truly lateral ideas including a clever way to reduce rhino poaching.
I am often asked to give corporate innovation training workshops. I always request that the senior executives attend but often when I arrive I find a class full of keen young troops and a sprinkling of middle managers. The youngsters are eager, intelligent and motivated. They readily absorb the ideas and the methods. In the interactive modules they generate and select great ideas for the company. These regularly include new products, services, processes, working methods and marketing initiatives. We select and present the best ideas at the end of the workshop. However, when I follow up in say two months’ time and ask which of the great ideas are implemented or underway the answer is muted. Despite the assurances given before and immediately after the workshop something has derailed the good intentions. The problem is ‘business as usual.’ Once the keen young executives return to their desks they become immediately re-immersed in their day jobs. They do not have the time, budget or authority to implement the great innovations that they conceived and planned. Their supervisors tell them to focus on their objectives and meet this quarter’s numbers.
The trouble does not lie with the delegates. It lies with the senior team. They want more innovation so they spend money on training their younger staff in how to do it. But innovation is not a game for juniors. It requires senior level commitment and involvement. People at the C level in the organization need to agree the objectives, attend the course, commit the resources and help drive the implementation.
My message to business leaders is stark. There is no point in committing resources to idea generation – whether in suggestions schemes, brainstorms or innovation training – unless you are prepared to commit significantly more resources for the implementation of the best ideas. Otherwise you run the risk of disillusionment among the staff who came up with the ideas. They will ask, ‘What is the point of spending time generating and evaluating ideas if nothing gets implemented.’
Business commentators and writers commonly quote Kodak as an example of a company that was destroyed by disruptive innovation. The usual message is that the big company was just too slow and complacent to react to the obvious tsunami that digital photography represented for the film industry. The facts are dramatic. The company was founded by George Eastman in 1888. It rose to a totally dominant position and was much admired as a technology and business leader. In 1976 Kodak enjoyed 90% market share of film sales and 85% share of camera sales in the USA. It developed the world’s first digital camera in 1975 and patented the idea. At its peak in the 1990s Kodak employed 70,000 people and had revenues of 16 $B and profits of 2.5 $B. Yet in 2012 it filed for Chapter 11 bankruptcy – laid low by the switch from film based photography to digital photography.
It is easy for the outside observer with the benefit of hindsight to be smug and critical of the Kodak board and its strategy. But it is far harder to identify exactly what they could have done to avoid their fate. The people who ran Kodak were not stupid. They could see the digital trend from well off and they tried a number of different and initially appealing ways to tackle the problem.
Kodak entered the digital camera market late but by 2001 they were number 2 in the USA behind Sony. However, they lost money on every digital camera they sold. Digital cameras dropped in price, became commodities and were ultimately replaced by cell phones and tablets. Even if Kodak had plunged into digital products earlier it would not have saved them.
The text book answer is diversification and Kodak diversified. They went into imaging services, pharmaceuticals, medical diagnostics, copiers, printers and computer hardware. But none of these ventures was really successful in replacing the huge revenues from film which were ebbing away.
They hired CEOs from outside the company to fight complacency and ensure different thinking. They were applauded at the time for bringing in first George Fisher from Motorola and subsequently Antonio Perez of HP. But neither could work the magic that was needed.
Kodak fell into the classic trap expostulated in Clayton Christensen’s book, The Innovators Dilemma. They kept listening to their customers and trying to build on their strengths – usually great things to do but not when you are facing disruptive innovation.
Rebecca Henderson who, ironically, is the Eastman Kodak Professor at MIT Sloan School put the problem well. She describes a hypothetical conversation between a Kodak executive and an early digital evangelist:
“I see. You’re suggesting that we invest millions of dollars in a market that may or may not exist but that is certainly smaller than our existing market, to develop a product that customers may or may not want, using a business model that will almost certainly give us lower margins than our existing product lines. You’re warning us that we’ll run into serious organisational problems as we make this investment, and our current business is screaming for resources. Tell me again just why we should make this investment?”
Maybe there was no smart way out. Maybe we have to face the fact that sometimes time is up for companies as well as people.
In his new book, Exponential Organizations, Salim Ismail coins the phrase an Iridium Moment. He explains how in the late 1980s the telecoms giant Motorola made a huge bet which turned out to be a strategic blunder. They could foresee a boom in demand for cell phones but at that time coverage was limited to urban areas which had local radio towers. Motorola launched a company called Iridium which planned to place 77 satellites around the Earth in order to provide mobile telephony coverage anywhere on the planet. It was an ambitious plan which failed spectacularly and cost its investors $5B. Why did it fail? Ismail explains that the plan was based on the wrong assumptions. The Motorola executives had based the justification for the satellite solution on the high cost and limited effectiveness of cell phone towers. This was true in the 1980s but by the time that the satellites came on stream the cost of towers had fallen dramatically and their range and power had increased. According to Dan Colussy, who organised the Iridium buyout in 2000, Motorola had refused to update its business assumptions, ‘The Iridium business plan was locked in place 12 years before it became operational.’ Ismail defines an Iridium Moment as using linear tools and trends of the past to wrongly predict an accelerating future.
Another example given by Ismail is Nokia’s purchase of Navteq for a staggering $8B in 2007. Navteq was the dominant player in in-road traffic sensing equipment. Nokia believed that the data from Navteq’s traffic sensors would allow it to lead in mobile mapping and traffic information. This would give it a strong competitive weapon against Apple and Google. Unfortunately for Nokia an Israeli start-up company called Waze found a much better and cheaper way to gather traffic information. They crowdsourced location data from the GPS sensors on people’s mobile phones in order to capture traffic information. The Navteq hardware cost a fortune to maintain and upgrade whereas the data from users’ phones was growing fast and was easily available. When Google acquired Waze for $1.1B in 2013 it had 50 million users – far more ‘traffic sensors’ than Nokia could match.
Nokia spent a fortune acquiring physical assets while Waze simply accessed information already available on people’s phones. Ismail characterises the Nokia approach as linear thinking – extrapolating the past and the Waze approach as exponential thinking by accessing and sharing information.
Before Beethoven classical music was genteel, calm, structured according to strict rules and designed to please wealthy patrons. Beethoven introduced the Romantic Movement with music that was powerful, disturbing and passionate. He composed nine symphonies, five piano concertos, one violin concerto, 32 piano sonatas, and 16 string quartets. He also composed chamber music, an opera, choral works including the celebrated Missa solemnis, and songs. He pushed the boundaries of music and changed the way it was composed and listened to.
Ludvig van Beethoven was born in 1770 in Bonn in Germany. He was one of seven children but only he and two younger brothers survived childhood. His outstanding musical talent was obvious at a young age. His father was ambitious to exploit Ludwig as a child prodigy. The boy was a brilliant pianist and at the age of 13 he was appointed organist of the court of Maximillian Franz, the Elector of Cologne. In 1792 he moved to Vienna where he met Mozart and Haydn both of whom influenced the nature of his early musical compositions. He went on to develop his own kind of musical style in what is known as his heroic period. Beethoven said, “I am not satisfied with the work I have done so far. From now on I intend to take a new way.” He composed a large number of original works on a grand scale. The first major work in his new style was the Third Symphony in E flat, known as the Eroica. It was longer and more ambitious than any previous symphony. It received a mixed reception at its premiere in 1805. Many listeners disliked its length or misunderstood its structure, but some recognised it as a masterpiece.
Beethoven had to battle a terrible affliction. At the age of 26 he began to lose his hearing. This was a dreadful blow for a professional musician. It caused him profound depression and he even considered suicide. He became completely deaf but this adversity impelled him to an intense level of creativity. Beethoven’s late period from 1815 until his death in 1827 is characterised by compositions of great innovation, power and intellectual depth.
He was acknowledged as a genius during his lifetime. 20,000 people lined the streets at this funeral in Vienna. He was a social revolutionary who deliberately broke normal conventions. Before Beethoven’s time musicians were paid servants of rich patrons. He demanded and received high fees. He disdained authority and social rank. He stopped performing at the piano if the audience were inattentive or chatted among themselves.
He supported the ideals of liberation and the French Revolution. He dedicated one symphony to Napoleon but revoked the dedication when Napoleon declared himself Emperor. The fourth movement of his ninth and final symphony contains a choral setting of Schiller’s Ode to Joy, an anthem to the brotherhood of humanity.
Beethoven used the affliction of deafness as a spur for even greater and more intense musical innovation. He transformed musical forms and defied social and artistic conventions. Beethoven knew that he was writing for posterity. When musicians complained that they found his music too difficult, he answered, “Do not worry, this is music for the future.”
A recent study by Capgemini Consulting, entitled The Innovation Game, charts the rise of corporate innovation centers (or centres as we say in Europe). Researchers interviewed leaders of such innovation units and conducted surveys of the 200 largest companies in the world. An innovation center is a team of people and a physical location. Its goal is to exploit the ecosystem of startups and accelerators to pioneer and test disruptive solutions and new business models. For example BMW’s innovation center in Mountain View aims to develop cutting-edge digital products such as virtual reality goggles that enable drivers to ‘see through’ the car. The Walmart Labs operation builds and test online and mobile technologies for Walmart and has acquired 14 startups in the past three years. It is claimed that the internal search engine developed by Walmart Labs drove a 20 percent increase in online sales conversions for Walmart. Staples innovation lab helped launch a digital wallet service in nine weeks — a record for Staples.
The report identifies six key goals for innovation units:
• Accelerate the speed of innovation
• Provide a fresh source of ideas
• Enhance risk-taking ability
• Attract talent
• Drive employee engagement
• Build a culture of innovation
The report concludes that large corporations can tap into thriving technology hubs and innovation ecosystems. By empowering their innovation centers they can re-energize their innovation capability.
Here is a super invention generated by a concerned student, Rebecca Pick. She has designed a tiny rape alarm which can be attached to your clothing. Through your mobile phone, when triggered it can inform police, give your location and record what is happening. It is a clever use of mobile technology and it makes you wonder – why did no-one think of this before?
Johannes Gutenberg (1398 – 1468) was a German blacksmith, goldsmith and printer who invented the printing press and movable type. Before Gutenberg all books had been hand written or stamped out with fixed wood blocks. Gutenberg combined two existing ideas – the power of a wine press and the detail of a coin punch to create the printing press.
His invention of mechanical movable type printing started a revolution in communication throughout Europe. It facilitated the spread of knowledge in the form of printed books and pamphlets. This fueled the Renaissance and the Reformation. There followed the Age of Enlightenment and the sharing of Scientific Knowledge.
There were many details which Gutenberg had to master. He invented a process for mass-producing movable type based on new metal alloys. He developed oil-based ink. He adapted screw presses used for squeezing grapes. His great achievement was to combine all these components into a practical system for the mass production of printed books.
In Renaissance Europe the arrival of inexpensive printed books started an era of mass communication which permanently altered the structure of society. Revolutionary ideas flowed across the continent and challenged the powers of established political and religious elites. Many consider Gutenberg’s printing press to be one of the most influential inventions in history. In 1997, Time–Life magazine picked Gutenberg’s invention as the most important of the second millennium. In terms of the impact on mass communication the inventions of paper and of the internet are the only two which come close to the printing press.
There are lessons for innovators. Many great innovations are really recombinations of existing ideas. Gutenberg’s great innovation involved combining the humble wine press and coin punch to make the mighty printing press. Another lesson is that great innovations have unintended and dramatic consequences. Gutenberg presses were originally used to print the Bible in Latin. However printing presses were subsequently used to print seditious, heretical and revolutionary texts which changed society forever.
Sometimes the by-product, the surplus or the unwanted extra can become the unexpected success. All it takes is a little imagination.
Brandy was originally a by-product used to help transport wine. In the middle ages in France duties were levied on the volume of wine being transported. Merchants boiled off water to concentrate the wine so as to reduce the taxes they paid. Water was then added later. However, someone discovered that the concentrate, brandy, tasted pretty good on its own.
In the 19th century diamonds were a rarity. They were primarily used as drill bits because they were so hard. The South African mining giant De Beers wanted to find a high-value market for all the surplus small diamonds that they found in their mines. They created the concept of the diamond engagement ring. They employed the ad agency N W Ayer to promote the concept of the engagement ring as the ultimate sign of love and devotion. Their strap line ‘A diamond is forever’ is considered by marketing experts to be the greatest advertising slogan of the 20th century.
Amazon developed tremendous IT skills and capacity as it grew rapidly selling books and other products on-line. It was a giant in B to C (Business to Consumer) products. After the dot.com crash in 2000 Amazon found itself with excess IT capacity in its data centers. It offered web services to businesses and became a leader in B to B (Business to Business) services – a completely different field from its original strength. Amazon Web Services is now a leader in Cloud computing.
In his excellent book, The Four Lenses of Innovation, Rowan Gibson gives the example of Imperial Billiards, a small New Jersey company which for 40 years specialised in making pool tables and other carpentry-based items. But sales of billiard tables were in steady decline. Then a customer suggested that they use their unwanted surplus sawdust and wood chippings to make wood pellets to burn in stoves and fireplaces. This turned out to be a better and more profitable business. A customer will only buy one pool table but will return time and time again for wood pellets for his stove.
Japan Railways East had a problem with water seeping from the mountain above into one of their tunnels. An engineer noticed that the water was of exceptional purity. In a stroke of marketing innovation JRE bottled the water and sold it as the Oshimzu brand.
Can you innovate with the under-utilized assets in your business? What by-product or surplus capacity could be put to better use?