Category: Innovation

“Innovation Is Strategy”:
Imperative #1 for the Crazy World of 2015/2015+

I'm labeling what follows a "précis" of my current concerns. It originated with a client request for projected "takeaways" associated with a forthcoming speech. I responded, as requested, with a single page. Then, more or less for the hell of it, I expanded the outline/précis to a 2,000* word short essay (PDF and PPT also).

Herewith FYI:

*It's been said a million times, but it must be repeated: The pace of change is unprecedented—and staggering. Robotics, genetics, artificial intelligence, and nanotechnology, among other things, are literally "changing everything." White-collar work can be augmented (IA/Intelligence Augmented), but high-end white-collar jobs by the tens of millions are under threat (AI/Artificial Intelligence). Robots to vacuum the living room floor are terrific, but roboticized war via "autonomous drones" is too gruesome to contemplate. "Designer babies" (and other genetic "miracles") may result in extraordinary healthcare advances—but may also introduce the stuff of wild-eyed science fiction. Our organizations—and nations—must take all this into account. The world will change shape—for better, and for worse. And it's happening more or less in a flash. Leading physicist Albert Bartlett goes so far as to suggest, "The greatest shortcoming of the human race is our inability to understand the exponential function."

*From a business—and, for that matter, government—perspective, there is, in a sense, only one overarching strategy: constant, high-speed innovation. The likes of efficiency and top quality are imperative for every enterprise—and the achievement thereof is hardly a small thing. (It's one damn big thing!) But that's "table stakes" in 2015/2015+. The (only) winning hand for one and virtually all is an organization designed from top to bottom as a de facto "innovation machine." In three words: "Innovation is strategy."

*A "culture of innovation" must be embedded and nurtured by top management and made central to every leadership position. Who are the organization's innovators? EVERYONE. (Or else.) A culture of innovation turns every organizational unit—from 6 to 6,666—into a school house, a learning machine, a buzzing, blooming experimental laboratory. (FYI: It goes without saying, implementing and sustaining such a culture is a daunting task in most organizations—it requires daily attention, more or less forever.)

*Simple as it is to say, but ever so hard to instill, there is a "big secret," and it is "Whoever tries the most things wins." "Move fast, break things" is Facebook's mantra—and it must become the mantra of all of us. Translation: Literally everyone must be trying and testing "new stuff" every day. There is an uncomfortable corollary to this, captured in the title of a recent book, The Paradox of Innovation: Whoever Makes the Most Mistakes Wins. To try a lot necessarily means to fail a lot—leaders must understand this and make it a centerpiece of the strategy and culture of the organization. "Good tries" that fail are to be celebrated, not punished or hidden. And hustle on an unprecedented scale should go without saying.

*Almost as important as lots of good tries is diversity. That is, every business unit must become a bubbling, "crazy" mix of views and backgrounds and tastes, feature constant intersection with outsiders of every flavor—constant contact with those who make us uncomfortable. Side by side with this bubbling cauldron is a "culture of curiosity." We only want team members—in every position—who question every thing every day, keep asking more and better questions—then, of course, tying it all to those constant tries.

*We are citizens of the world—the world is our source of playmates. The new technologies allow us to play with and partner with, day in and day out, practically everyone on the planet. Our source of ideas and partners is "everybody, everywhere." This approach is "not optional."

*Social media is everybody's "game." One social media baron said, "It takes 20 years to build a reputation, five minutes to lose it." (True.) And a big-firm financial services CEO said he would rather have a single direct twitter conversation with a customer than spend millions on a Super Bowl ad. (Sensible circa 2015.) Add a dozen like, "radical" assertions and you have this: (1) Social media is ubiquitous—and is everybody's business. (2) Stay as near the forefront as you can—and get personally engaged. Big Time. Best time to start this journey? Today.

*There are two giant, still under-served markets: Women (who buy everything) and "oldies" (who have all the money). Women make the large lion's share of purchasing decisions—of commercial as well as consumer products and services. (Re the latter, in the U.S., for example, over 50% of purchasing professionals are women.) Every aspect of the organization—from strategic planning to R&D to after-sales service should be designed for and take direct aim at the still oft-ignored women's market. Likewise, the population is aging at an incredible rate; and the "oldies" have more or less all the discretionary income—to say their needs are under-served is gross understatement. What's at stake? For one thing, the women's market worldwide is an estimated $28,000,000,000,000.

*"Design" is an attitude, not prettification—and it has universal application. With Apple as our role model, we finally understand that "design pays (b-i-g time)." Both aesthetics and user-friendliness rule. But design consciousness that matters is not an afterthought or "add on." It should infect every decision. And, make no mistake, design consciousness applies to an 8-person training department as much as to a retail outlet!

*Little is as good as big, maybe better. Innovation over the long haul rarely if ever comes from enormous "breakthrough ideas." Steve Jobs never "invented" anything. He took extant ideas and polished and polished and polished some more and perfected and repurposed them until, eventually, something magical emerged. Also, and perhaps even more important, time and again (if you're trying enough stuff quickly enough), a tiny twist or turn will yield gargantuan results—e.g., change the entrance road into a Vegas casino from a harsh 90-degree turn to a gently curved road and the number of people who come to the casino doubles! Walmart significantly increases shopping cart size and small-appliance sales shoot up by 50%! (I could add 100 more similar eye-popping stories if I had the space.)

*Little beats big: Like it or not, our giant firms are rarely our best innovators. It's our SMEs/Small and Medium-sized Enterprises that spearhead innovation and carry the weight of sustainable economic progress. We must support these firms in every way imaginable, from funding availability to development of large-scale innovation incubators to instilling a national proclivity for entrepreneurial efforts. (FYI: In the U.S., women-owned venture-financed startups outperform—finance, growth—male-owned startups.)

*Little-within-big. The "death of hierarchy" is unlikely—and even unwanted. There must be a structure of accountability in any complex operation. On the other hand, much/most of the work in today's organizations will be done by project teams, project teams with a mishmash of members from all over the map, collections/collages of project teams, and constantly re-forming sets of project teams. Developing and sustaining a fluid organizational "structure" that allows these teams to be rapidly generated, change shape, and disappear—without losing the capability to execute and finish the job—is a major and challenging chore.

*"Sweat the details." An old boss of mine in the White House in the '70s said, "Execution is strategy." Great ideas need polishing and polishing—and polishing. It ain't over until the last 1%% is in place. Or consider this: A hotel is only as good as the efforts of the housekeeping staff; lousy housekeeping and a poor customer attitude on the part of front-line employees in general can torpedo a $100,000,000 hotel investment in a perfect location. (FYI: One retail genius said, "Remember, your customers can never be any happier than your employees.")

*Needless to say (but it always needs saying—and then saying again and again), capturing and keeping an energized, empowered, engaged, growing workforce is the bedrock of all the above. "Putting people first" must stop being a slogan—and become everyday reality and agenda item #1 in every organization of every size; the payoff is staggering, from retail to biotech. Training and development—with a passion and a big budget—are the bedrock of the bedrock; as one executive put it, "Why go berserk over training? Greed—it pays off in spades." (E.g., when the financial crisis hit, the Container Store, voted the top company to work for in America a couple of years back, doubled rather than cut the front-line training budget in order to increase the sales tickets from the lesser number of customers coming in the door. It worked. And yes, I did just say that a middle-market retailer, not Google or one of its sexy peers, was the %1 USA company to work for.)

*Women are the best leaders: Toward "gender balance" and more. The evidence accumulates: Women are the most effective leaders. A study reported recently in the Harvard Business Review determined that women top men on 12 of 16 key leadership traits—including "hard 'male' stuff" like goal setting and "results orientation." A McKinsey study showed that boards of giant companies with gender balance had 56% more operating profit than the male-dominated flavor that, alas, remains the norm. It is so so absurd not to act decisively on such information—which is just the tip of the iceberg.

*Forget the "vision": Improving leadership effectiveness stems mostly from assiduous attention to a bin full of "tactics." "Vision" is one thing, but I like to focus on the "(so-called) little stuff": (1) religiously doing your daily MBWA/Managing By Wandering Around—i.e., staying in direct touch with the likes of front-line employees and customers come hell and high water. (2) Visibly and constantly acknowledging staff contributions. (3) Apologizing with an "over the top" response after screw-ups. (4) Acknowledging that meetings are "what you do" as a leader, and turning them from "pains in the butt" into "paragons of excellence"—no kidding! (5) Becoming a Master of Listening—through study and practice. And about 25–50 other things I can readily think of. The "big stuff" (vision) is not unimportant, but longterm improved leadership effectiveness will mostly result from practicing and mastering that hefty bin full of tactics.

*Excellence is not an "aspiration." Excellence is ... the next five minutes. Or not. Excellence is the next conversation in the hall—or not. Excellence is lending someone a helping hand when you are under pressure of a crushing deadline and "don't have the time"—or not. Turning an "insignificant" task into nothing less than a Glorious Exhibition of Excellence—or not. Excellence is not about the long term—it's about right now, or it's a bad joke.

*A "culture of innovation" starts early—that is, the traits enumerated above should permeate the education system, from age five onward. For one (very big) thing, the experimental attitude—and "whoever makes the most mistakes wins"—are antithetical to traditional education, from the USA to Germany to China; that must change if we are to generate satisfactory and challenging employment and economic growth in the near, let alone far, future.

The challenges enumerated here are monumental; few will get passing grades in every category. But we cannot reduce the pace of change bearing down on us, so we must create a strategy and culture that encompasses a big share of the ideas above. And do so at an unrelenting speed.

In Conclusion and Associated With the Above: A Few of My Favorite Quotes for the Times

"Business has to give people enriching, rewarding lives … or it's simply not
worth doing."
—Richard Branson

"Your customers will never be any happier than your employees."—John DiJulius, personal services chain superstar

"We have a strategic plan. It's called 'doing things.'"—Herb Kelleher, Southwest Airlines

"You miss 100% of the shots you never take."—Wayne Gretzky

"Ready. Fire. Aim."—Ross Perot

"The essence of capitalism is encouraging failure, not rewarding success."—Nassim Nicholas Taleb

"Execution is strategy."—Fred Malek, entrepreneur, financier

"Amateurs talk about strategy. Professionals talk about logistics."—General Omar Bradley, commander of American troops/D-Day

"I'm not comfortable unless I'm uncomfortable."—Jay Chiat, advertising giant

"It takes 20 years to build a reputation and five minutes to ruin it."—John DiJulius on social media

"Courtesies of a small and trivial character are the ones which strike deepest in the grateful and appreciating heart."—Henry Clay, American statesman

"You know a design is cool when you want to lick it."—Steve Jobs

"This will be the women's century."—Dilma Rousseff, President of Brazil, at the U.N.

"Avoid moderation."—Kevin Roberts, marketing's "guru of gurus"

"You can't behave in a calm, rational manner. You've got to be out there on the lunatic fringe."— Jack Welch

"Be the best. It's the only market that's not crowded."—George Whalin on great independent retailers thriving in the age of giants

[Ed.: Again, you can download a PDF or PPT of this blog.]

A TEN-POINT “NO OPTION” MANIFESTO: RE-IMAGINE. EXCELLENCE. INNOVATE. NOW. OR PERISH.

Herein the outline of my presentation to PAI Market Partners Conference on 05 December in Punta Cana, Dominican Republic:

1. "Software is eating the world."—Marc Andreessen. "It" has been coming for a long time. But "wait 'til next year" is done. Radical—very radical—technology-driven changes, featuring robotics-executed surgery, algorithms that dominate the world's financial markets, the "Internet of Everything," and the like are upon us, and the time-to-adapt is well within the five-year mark. Alas, what is making you successful today may get in the way—usually does get in the way—of imperative radical revisions. Customer experiences in retail in 2019, for example, will bear little resemblance to the world of 2014. Could I be wrong? Sure. But the odds of my being right are sky high. No, virtually none of you (in my PAI partners audience) compete directly with Walmart, but remember their "little" (1,500 folks!) Silicon Valley shop is creating a Richter 7.0+ tech-driven earthquake in customer experience; the aftershocks will be felt 'round the world.

2. "Be the best. It's the only market that's not crowded."—George Whalin. There are modest-size companies in any industry you can name—that make you shake your head and blink 10 times they are so far out front of the pack. Larry Janesky's Basement Systems Inc. of Seymour, CT, is reinventing the very nature of, yes, our basements, increasing their utility almost beyond measure. (Can you believe it? $80,000,000 in revenue and growth to die for says Mr. J is onto something.) Then there's Joel Resnick's Red Carpet Store in Flemington, NJ—observe red carpets at a major celebratory event like the Oscars, and TRCS probably did the job. Add in Bronner's Christmas Wonderland of Frankenmuth, MI—sporting 6,000 Christmas ornaments and 50,000 trims (featured in Whalin's amazing Retail Superstars: Inside the 25 Best Independent Stores in America). And: W.A. Coppins, the sea anchor superstars from wee Motueka, New Zealand, providing hyper-high-tech products for the likes of the U.S. Navy and the government of Norway. There is room for stunning differentiation in any and every marketplace! The likes of these companies—and hundreds, thousands like them, which I call "Niche-/Micro-niche Dominators"—should give us hope and hard evidence that crazy-cool imagination, passion, and drive can lead to dominance in anything anywhere. Why not you?

3. "Insanely great." "Radically thrilling." C'mon, why shouldn't you shoot for the moon—reminiscent of those measures used by Apple and BMW? As Jack Welch put it as he re-imagined gigantic GE: "You can't behave in a calm, rational manner. You've got to be out there on the lunatic fringe." (Frankly, I look at Jack W's "command" as an imperative—for close to 100% of us.)

4. "Ready. Fire. Aim."—Ross Perot. My 48 years of watching and participating in major organization change lead me to conclude that, in effect, at the end of the day there is only one way to cause a revolution. Just keep trying stuff, almost recklessly. "Move fast. Break things."—Facebook. "Fail. Forward. Fast. —High-tech CEO. "You miss 100% of the shots you never take."—Wayne Gretsky. In summary, my Golden Rule: "WTTMSASTMSUTFW." Whoever. Tries. The Most. Stuff. And. Screws. The. Most. Stuff. Up. The. Fastest. Wins. Call it simplistic, that's okay by me, but I swear by it. Consider that Bloomberg Businessweek and the Wall Street Journal claimed that the #1 trait of enterprises that adapt is: "Experiment fearlessly." "Relentless trial and error." To which I say: Amen!

5. Value added through radical strategic services enhancement. UPS for decades emphasized the "P"—the parcels. Now it sees itself in the "S" business (Services—with a capital "S"); rather than just give you a package fast and reliably, now UPS wants to get inside your business—big time—and become your partner and even the captain of your entire supply chain. IDEO, the superstar design firm, is now doing more, much more than product and service design—including implementing fullscale systems of innovation for its clients. In my opinion, such an approach—radical service enhancement by strategic partnering with your customer—is effectively available to any business of any size.

6. "You know a design is good when you want to lick it."—Steve Jobs. "Only one company can be the cheapest. All others must use design."Insights, Design Council, UK. Value added by emphasizing-obsessing on design (a la Apple, Starbucks and a growing number of others) and developing a great customer experience are almost "musts" for any and all of us. My point of view—see #1 above—is that the entire shopping process is in the midst of a once-in-10-lifetimes transformation. And you can be a principal partner (that p-word, "partner," again) to your client in his or her design/experience quest for transformation.

6A. "Forget China, India and the Internet: Economic Growth Is Driven by Women."Economist. One more thing: You are indeed in the "experience business"—and that shopping experience is very different for women than men; the male shopper's experience is still the default position for many, even most, firms. And yet it is an unimpeachable fact that women are the premier purchasers—of damn near everything. (My message: Wake-up-ASAP-and-smell-the-enormous-opportunity.)

7. Little BIG Things. There is big mileage to be made from apparently small adjustments—dramatic change need not be accompanied by a whopping upfront investment. A Vegas casino changes the shape of its driveway, and twice as many customers come to the front door (the impact of that micro-adjustment can be measured in hundreds of millions of $$$). Walmart "merely" increases shopping cart size—and watches small appliance sales soar. Johns Hopkins' Dr. Peter Pronovost introduces a simple checklist, swiped from pilots, into ICUs—and begins a process saving thousands of lives. These sorts of "little BIG things" are lying in wait, ready for the plucking, in every nook and cranny of the experiences we concoct, can be tested quickly, and carry a low price tag. (So let's quit the strategic overthinking, and get on with that "relentless experimentation"—see above.)

8. Go "Social." "Social," that is, full-fledged use of the new media, is not the provenance of the "big guys."  It's available to all of us—today. Consider this from the social-media primer Youtility: "Today, despite the fact that we're just a little swimming pool company in Virginia, we have the most trafficked swimming pool website in the world. Five years ago, if you'd asked me and my business partners what we do, the answer would have been simple, 'We build in-ground fiberglass swimming pools.' Now we say, 'We are the best teachers ... in the world ... on the subject of fiberglass swimming pools, and we also happen to build them.'" Ready to follow this path? The answer, more or less, must be "Yes."

9. "Business has to give people enriching, rewarding lives ... or it's simply not worth doing."—Richard Branson. The smaller firm is even more dependent on stellar talent than the big guys. Find that talent and help each and every employee grow each and every day. I like to summarize it this way: "EXCELLENT customer experiences depend … entirely … on EXCELLENT employee experiences! If you want to WOW your customers, FIRST you must WOW those who WOW the customers!" As superstar movie director Robert Altman put it: "The role of the Director is to create a space where the actors and actresses can become more than they've ever been before, more than they've dreamed of being." In my mind, that holds as much for the local car dealer—and you and me—as in the world of Hollywood.

10. Pope Francis as model and clarion call to radical action. The new Pope is in his late '70s—and aims to change the world on his watch. You and I are not on a religious mission, but the new Pope offers heartening and unassailable proof that big waves can be made fast—and the wavemakers need not be the wet-behind-the-ears youth of Silicon Valley.

Good luck—go for it! (FYI: You really have no choice.)

[Get a PDF of this blog.]

TEDx
Manchester VT
Creativity

On 22 June 2013, I had the privilege of acting as MC/host for a TEDx conference in Manchester VT—effectively, my home town. The chosen topic was creativity, and some 13 talks attacked the issue from every angle imaginable. As MC/host, I began by attempting to set the context—and chose to do so along economic lines. Call it:

Creativity: NO OPTION.

What follows, very lightly annotated, is an expanded version of that context-setting overview.*

(*I did not give a speech—and I did NOT use PowerPoint. The presentation here is my notes subsequently transformed into PowerPoint.

Best of the Cool Friends
Tom Kelley

One of Tom's favorite topics is innovation, and you'd have a hard time finding a more expert person on the subject than Tom Kelley, General Manager of IDEO. His business is innovation, and we spoke to him twice, following publication of his first and second books. By reading his two interviews (links below) at tompeters.com, you get a very good overview of an innovative organization, and perhaps some tips on making your own organization more so. Best quote: "So part of the message of my book and the message from people like Tom [Peters] is that it's okay to act differently."

Tom Kelley Interview No. 1, following his first book, The Art of Innovation.

Tom Kelley Interview No. 2, following his second book, The Ten Faces of Innovation. Feedback from readers of the first book prompted him to write the second.

If you would like to learn more, we also have an interview with Tom Kelley's brother David Kelley, CEO of IDEO, who describes some of the history of that very cool innovation factory.

Off the Cuff #3

Our Off the Cuff video series is a direct response from Tom to your questions. This is the third video in the series, which poses a question from Jack, "Why don't big companies innovate, and who are the best that do?"

Anger and Innovation

Tom has written, "All (ALL) innovation comes from fury." Reading this in The Little BIG Things compelled the editor of Oxford American magazine to examine why he founded the magazine as well as what disturbs him about his competition. In this editorial, he rails against a competitor's simplistic portrayal of the American South. I've never laid eyes on either the Oxford American or its competitors, and being a deeply rooted Yankee, I have no authority to judge their authenticity or value. However, it's an opportunity to invite you to action.

This story is an example of allowing fury at "how things are done" to spur you to delve deeper, to explore, to search intensely for truth or for the ability to see a situation or problem more clearly. It begs the question: what's making you furious? Not irritated. Furious. Now take that energy and start exploring how things could be done differently. This is how change happens.

The Little BIG Things
Synopsis Series
#30 Gender
#31 Innovation

It's time for two new sections in The Little BIG Things Synopsis Series. The next two sections in The Little BIG Things: 163 Ways to Pursue Excellence are titled "Gender" and "Innovation." Tom covers a lot of ground in Gender—from the penultimate example of female persistence to the economic impact of serving the women's market—when he points out why the gender difference is something worth your attention. The Innovation section is packed with insights and examples surrounding the key to being innovative: S.A.V. (Screw Around Vigorously).

You can download free pdfs of those sections from The Little BIG Things Synopsis Series* by clicking below:

#30 Gender
#31 Innovation

*The Synopsis Series is an adaptation that gives you a taste of the BIG idea in each of the 163 Little BIG Things. More information on the book can be found on this page. The Synopsis Series as released thus far can be found here.

Little BIG Video #45
Innovation:
Angry People Make Change

In video number 45 from The Little BIG Things Video Series, Tom tells us the single source of innovation is angry people. Their anger allows them to penetrate the resistance they encounter.

You can find the video in the right column of the front page of tompeters.com or you can watch the video on YouTube. [Time: 2 minutes, 57 seconds] You can also download a PDF transcript of the video's content: Innovation: Angry People Make Change.

World Business Forum 2010
#wbf10

Our longtime friends at HSM put on their annual World Business Forum in New York last week. Tom has spoken at this event in the past and this year they invited us to attend via the Blogger's Hub, a special section monitoring the event.

The roster of speakers was impressive, to say the least. To name but a few: Al Gore, Jack Welch, A.G. Lafley, Joseph Stiglitz, Steve Levitt, Jim Collins, James Cameron, and Charlene Li. The presentations ran the gamut from economics to innovation, but there was no lack of commonality of message with what Tom has been espousing for decades. So what were the major themes and takeaways of the event?

Talent
The first day of the event seemed to have an underlying theme of talent. Jim Collins, author of Good to Great, asked, "How many key seats are on your bus? How many have you filled with the right people?" Carlos Brito, CEO of Anheuser-Busch InBev, offered the equation, "Great people = Great companies." He advocated for creating a culture of owners, avoiding the "don't be gentle, it's a rental" mindset (you'd do things in a rental car you wouldn't dream of in one you own). Jack Welch, former CEO of GE, put it simply and definitively: "You get the best players, you win."

(more…)

California Dream

"Rumors of my death are greatly exaggerated."—Mark Twain

Did you know: 43% of all U.S. venture capital in 2008 went to the San Francisco Bay Area.

California on its last legs? I probably heard that sorry story five times in my 30-plus year residence, roughly 1966–2000.

What a crock!
Then!
Now!

Check out this week's Time cover story, "The End of California? Dream on!"

Here's an excerpt:

"Ignore the California whinery. It's still a dream state. In fact the pioneering megastate that gave us microchips, freeways, blue jeans, tax revolts, extreme sports, energy efficiency [CA's per capita energy consumption index has gone down steadily for the last 40 years while the U.S. overall has gone up], health clubs, Google searches, Craigslist, iPhones, and the Hollywood vision of success is still the cutting edge of the American future—economically, environmentally, demographically, culturally, and maybe politically. It's the greenest and most diverse state, the most globalized in general and most Asia-oriented in particular at a time when the world is heading in all those directions. It's also an unparalleled engine of innovation, the mecca of high tech, biotech, and now cleantech. In 2008, California's wipeout economy attracted more venture capital than the rest of the nation combined. Somehow its supposedly hostile business climate has nurtured Google, Apple, Hewlett-Packard, Facebook, Twitter, Disney, Cisco, Intel, eBay, YouTube, MySpace, The Gap, and countless other companies that drive the way we live."

I'll close with this quote from genomics guru Craig Venter: "This is the most dynamic place for change on earth. That's why we're here."

I suggest you delay the publication of the obit.
Roll on, mighty California!