Innovate or Die: The Innovation110
A Menu of [Essential] Innovation Tactics
Part Two: Tactic #17 through #42

We Are What We Eat.
(And Who We Hang Out With.)

17. Hang out/”We are what we eat” We are what we eat/We are who we co-habit with, and variants thereof are of infinite importance to the effective innovator. Managing “the hang-out factor” is of the utmost strategic importance—and usually an under-tended lever.

18. Hang out/Basic axiom. Hang out with weird—get more weird. Hang out with dull—get more dull.

19. Hang out/Customer portfolio. Consider one’s customer portfolio. Perhaps a few giant customers account for 85% of one’s revenues. One must listen to them, but the odds are that these giants are relatively conservative. Hence one must purposefully and urgently recruit oddball-“on the frontier” customers. Their revenue stream may be limited, but these folks force you to play with novel products and services to meet their peculiar needs. Hence careful construction of the total customer portfolio is an essential practice.

20. Hang out/Customers everywhere. Customers at various staff meetings, on various teams, etc.

21. Hang out/Our folks at customer sites. Imbedded staff at lead customer locations. The success watchword is “intermingle.”

22. Hang out/Vendors/Outsourcing Partners Portfolio. Instead of a few “strategic suppliers,” as important as they may be, one needs “far out” vendors and outsourcing partners whose innovations force you into an innovation mode. I.e., repeat #19 and #20 and #21 for vendors.

23. Hang out/Locale (Hotbed). Company or unit HQ location is important beyond measure. Working in a “hotbed” (e.g., Cambridge MA and biotech) is an immeasurable spur to innovation. (Beware: Hotbeds eventually become lookalike and-or complacent—think Detroit, 1920 vs 1980–2008.)

24. Hang out/Team placement. An offsite team in an innovation hotbed often takes on the attributes of a gang of on-the-make pirates. A team near a plant takes plant-derived considerations particularly seriously. Etc. Want weird? Start with consideration of locale.

25. Hang out/Space management. Space management is arguably the singlemost important strategic lever. Designer moved next to the CEO? Design vaults up the importance scale. Etc.

26. Hang out/Consultants Portfolio. Types of consultants brought in influences who we talk to-live with, how we approach problems. There are “hot” consultants, and “not-so-hot” consultants. Again, purposefully and strategically manage the portfolio.

27. Hang out/Crowdsourcing. Crowdsourcing stands a good chance of radically changing the world of innovation! You simply must experiment vigorously. The tool is powerful, but the process is not automatic—it needs lots of thought and oversight. (And it applies to every nook and every cranny of the enterprise—and to small enterprises.)

28. Hang out/Clubs, learning networks, etc. Electronic, physical, any and all formats. Turning the enterprise into a de facto university, with learning and growing honored and ubiquitous and fast and furious and fun, is the point here.

29. Hang out/Staff. Where staffers live relative to their line customers is critical. A finance person imbedded in the logistics department, for example, changes both perspectives.

30. Hang out/Lunchmates. Never waste a lunch!!!! Lunch is 5 opportunities per week, 220 opportunities per year, to get to know interesting outsiders, folks from other functions, customers, vendors, frontline staffers. This is remarkably important. “Lunch management,” a “lunch culture” is not an amusing aside.

31. Hang out/Meeting Attendees. We spend enormous amounts of time in meetings. Never waste a meeting. Invite interesting outsiders, folks from other functions, etc. (See #30 immediately above.)

Diversity Per Se.
Sine Qua Non.

32. Diversity/Every flavor/Management & Measurement. Diversity with a lower-case “d.” Black, white, brown, purple … tall, short … North American, Asian … public school, private school, no school … etc. … etc. (Etc.) Decision-making of every sort is far, far better with diverse views of any flavor. Period. I have come to view this as a gamechanger—for a 6-person project team, a 20-person company, a huge enterprise.

33. Diversity/Hiring. Search every oddball corner of the world for interesting people. Hire dull, get dull results. (Duh.) (This holds across the board—and irrespective of the size of the enterprise.)

34. Diversity/Freak Acquisitions. I’m an enemy of 99% of mega-mergers, and a vigorous ally of small acquisitions that allow skipping steps in obtaining interesting new pieces of the puzzle for an enterprise. This can be the purchase of an intriguing 2-person accountancy by a 15-person accountancy, as well as a small-acquisition overall strategy by the likes of Cisco Systems.

35. Diversity/Promoting. Diversity of every stripe at every level, achieved by design. Remember, diversity-qua-diversity works.

100% Enthusiasts.
100% Innovators.
HR = Supercool.

36. “What do you think?” Innovation-an innovation culture engages one and all. (All = All.) Getting everyone to think about improvements small and large comes from, de facto, constantly asking “What do you think?”—perhaps the 4 most important words in the innovator’s vocabulary. Treating every voice as valued yields more value from every voice.

37. Hire enthusiasts. Innovation is about active engagement. The more enthusiasts, the more people want to “opt in” and fully engage. Enthusiasts are innovators almost by definition. (Or, at the least, non-enthusiasts are guaranteed non-innovators.)

38. Promote enthusiasts. Enthusiasts are important in all roles. Enthusiasts as bosses is a “no option” imperative—if you want to create an “innovation machine” in organizations of any size.

39. Innovative behavior is the best predictor of innovative behavior. Want to discover an innovator? Best test: a history as an innovator, apparent at the latest by, perhaps, age 10 or 12 or 14.

40. Re-invent HR to be a Center of Innovative People. It’s not that HR has to “support” a culture of innovation. HR must be a chief carrier of the culture of innovation, must model innovative behavior 100% of the time. An “innovation culture” in HR is arguably more important than an innovation culture in marketing and new product development. (Think about it.) (Alas, this is ever so rare.)

41. Get the incentives right! Profitability, quarter by quarter, is essential—in organizations of all sizes. But a commitment to innovation as evidenced by the likes of share of revenue from products introduced in the last 24 months should be a major component of discretionary compensation. Equivalent measures must be developed for logistics, purchasing, HR, IT, etc. Incentive schemes must “speak” innovation.

42. Get the evaluations right! Per #41 immediately above, the evaluation process must focus on risk-taking, innovations launched, “excellent failures” as one exec puts it. Department bosses might be evaluated by comparative innovativeness at similar departments in peer-competitor firms. Etc. Innovation-in-evaluation is a 100% affair.

Tom Peters posted this on January 6, 2009, in Innovation.
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