Unlocking Innovation: How to know what you don’t know

Remember the old cartoon of the military sergeant who asks one of his troops the difference between ignorance and apathy? The troop’s response: “I don’t know and I don’t care.”

I think of that cartoon sometimes when we attend innovation workshops or visit with clients who are dutifully hosting their annual off-site brainstorming retreats or “all hands in the conference room” idea days.  HR brings in the balloons and sticky notes and off we go! Right? Wrong. Innovation doesn’t just happen on-demand; it’s a fluid process that must be cultivated all the time—from all corners of your organization at all levels of the org chart. That way, whenever a customer/client need or opportunity hits, you’re more than ready to fill it.

As the old saying goes: “Good luck is what happens when preparation meets opportunity.” But how often are we really prepared when opportunity knocks?

Last month, Michael Dunham, CEO of the Associated General Contractors of Georgia, Inc. told me that if you have all the money in the world and a lot of staff, you can just sit around, throw out a bunch of ideas and see what sticks. “That’s not the case here. You need to go stay alert, identify needs that must be filled and then look for creative ways to solve them. My job is to find out what members need before they know they need it and then have a solution waiting when they get there,” said Dunham. See more insights from Dunham here.

Last weekend, Warren Berger, author of the book A More Beautiful Question, argued in a New York Times article that encouraging employees to ask good questions is one of the best things companies can do to help spur innovation. At a time of rapid change and rising uncertainty, Berger wrote there is constant “pressure to keep learning and to keep anticipating what’s next.” In fact, Berger referenced an organization called The Right Question Institute which believes that the simple act of formulating questions “organizes our thinking around what we don’t know.”

Of course, as Berger points out, getting management to respond well to questions is not as easy as training employees to ask more and better questions. “For questions to thrive in a company, management must find ways to reward (not thwart) the behavior.” It could be as simple as publicly acknowledging a “good question” when asked and by encouraging employees to think in terms of “What If?” and “How Might We?” wrote Berger.

The only trouble is that most of the world’s best question-askers don’t work for our companies—they tend to be kids, whose question-asking acumen peaks at age 4 or 5, not 40 or 50, according to researchers.

If your innovation practices still need a jumpstart, we strongly recommend webinars and conferences from the International Association of Innovation Professionals (IAIOP), where you learn more about the difference between the art and science of outcome driven innovation.

Our blog and website have more about this and related topics. 

Conclusion

According to Berger, “leaders could do more to encourage company-wide questioning by being more curious and inquisitive themselves.” Of course, that takes a great deal of courage whether you’re a sole practitioner or a Fortune 500 exec.

So at the end of the day, how do you know what you don’t know? Simple. Just ask. And never stop thinking like a kid—something my wife says is never a problem for me.

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Get Obsessed About Innovation

5 traits that great entrepreneurs and visionaries share

Summer doldrums got you down? Not firing on all cylinders like you usually do? Well, you’re not alone and it’s better to recognize the signs of mental fatigue than to beat yourself up for missing your lofty goals. Some professionals go to the beach, lake, mountains or Europe to re-energize. But, increasingly high achievers are going to conferences of like-minded peers, even when they start on weekends and are in non-resort destination cities.

 

Case in point. Last week I attended the American Society of Association Executives annual conference in Detroit. More than 6,000 association execs from financial, insurance, health care, manufacturing and education organizations descended on "The D" as locals now call it and they weren’t disappointed.

Keynote speaker and Detroit native Josh Linkner explained that creative thinking is the driver of both disruption and avoiding being disrupted. "Regardless of your job title or industry, all of us in the corner office need an additional unwritten title of ‘Chief Disruptor,’ ‘Business Artist’ or ‘Entrepreneur,’" said Linkner, CEO and managing partner of Detroit Venture Partners and author of the business best-sellers Disciplined Dreaming and The Road to Reinvention. If you haven’t been to downtown Detroit lately, you might be pleasantly surprised.

5 obsessions of successful entrepreneurs

Linkner’s not a think tank guru who’s never run a business. He founded four Detroit-based technology companies that sold for a combined $200 million. After becoming a VC, he became obsessed with the creative thinking methods of great entrepreneurs. After interviewing 200 great entrepreneurs and thought leaders for his book, Linkner said five common traits bubbled to the surface. As an advisor, you should pay heed to each of them:

1. Insatiable curiosity. "The more obsessive you are, the more creative you become," said Linkner. He recommended asking why—not once, but at least five times in a row, borrowing a page from Toyota. Asking a deep question and then repeatedly probing "why" is not just child’s play. It uncovers layers of behaviors and assumptions that are taken for granted and are where the potential for creative disruption lies.

2. Crave what’s next. Even for wealth advisory and financial services firms that are healthy and not facing disruption, Linkner warns that you must constantly look to the future and be willing to reinvent yourself. He shared the example of legendary Duke University basketball coach Mike Krzyzewski, who trains his players to shout "Next play!" after every basket. "Coach K has trained his team to literally shed the pad every 20 to 30 seconds," said Linkner, who added that LinkedIn handed out 8,000 "What’s Next?" T-shirts to its employees the day of its IPO, so they wouldn’t become complacent and spend their days calculating the value of their stock options.

3. Defy tradition. For many companies, including wealth advisory firms, tradition can be a formidable barrier to innovation. So Linkner advised doing a "judo flip" by doing the 180-degree opposite of what tradition or experience would suggest. Rather than immediately dumping money and resources into solving a problem, try throwing imagination at it, he advised.

4. Get scrappy. True innovators like to "MacGyver" their problems, he said, in reference to the popular 1980s detective show about a protagonist who always got himself out of impossible jams with limited tools and resources. "It’s the classic mindset of the start-up, but even large, well-established organizations can adopt it by envisioning how a new start-up firm would try to gain traction in its niche. You can’t think that way without being the start-up," said Linkner.

5. Push the boundaries. Genuine disruption comes from more than just incremental change, observed Linkner. He advocates the "10X" test that his firm uses in evaluating venture investments. Does the idea have the potential for a tenfold improvement over an existing product or service that’s being offered? It could be a tenfold improvement in market size, cost, revenue or some other key metric that you use.

Conclusion

"No matter how good things are going, we can’t become intoxicated by our own success," observed Linkner. How many of these 5 obsessions do you honestly think you have? If you answered three or less, it may be time to reboot your world view.

If the city of Detroit can reinvent itself for the better, so can you.

Our blog has more about this and related topics.

 

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TAGS: Innovation, entrepreneurship, Detroit comeback

Finishing What You Start

What U.S. military and women’s soccer team can learn from savvy marketers. Hiring trends optimistic for digital media. Speed and innovation key.

For better or worse, it’s that time of year when vacations, out-of-office replies and steamy summer weather conspire to slow down the pace of business decision-making worldwide, even in the U.S. For most of us here at HB, it’s the most stressful time of year, because we worry we’re overlooking something or just plain not trying hard enough when the phone’s not ringing off the hook and frantic emails aren’t clogging our inboxes.

Other folks—the smart ones—take this opportunity to catch their breath and contemplate where their businesses are going, what could be going better and what could be done more efficiently.

Thanks to the ease of social media, online video and virtual events, our guess is that there have been a record number of new media initiatives started in both the corporate and not-for-profit world. But, rather than really analyzing what’s working and not-working well, most organizations just keep launching new initiatives to show they’re cool, up-to-speed and always in touch with their customers, clients and constituents. Of course, constant startup, without the discipline of mid-course corrections, much less finishing, will simply drain your energy, your resources and your organization’s patience and take you off your core mission. Either that, or a cynical CFO, VC or IT person asks to see some measure of return on resources expended. At that point, most innovators throw in the towel…or start something new.

Soccer, military and finishing

If you saw Sunday’s heartbreaking World Cup overtime loss by the U.S. women’s soccer team to Japan, you know what we mean. How many times did the commentators and even U.S. national team coach, Pia Sundhage use the term “finishing” or lack thereof? The U.S. kept blowing scoring chances throughout the scoreless first half and through much of the second half. Then every time they managed to bang one through the back of the net, the plucky Japanese squad would score the equalizer a few minutes later. When it came down to overtime penalty kicks, you could tell on the Americans’ faces they knew they would be toast.

We’ll keep our political views out of this forum, but, we can only sustain so much “nation-building” in Afghanistan, Iraq and other war-torn regions around the globe at any given time. Without the resources and strategy to finish what we started, we’ll have nothing to show for all the lost lives and billions of wasted dollars across the globe….kind of like a website with lots of outdated “news”, and old links leading nowhere.

Upbeat hiring trends for digital media professionals

Ed Koller, Managing Partner of Howard-Sloan-Koller Group wrote to clients on Monday that “innovation” was the dominant word in business last year. “But know we know that innovation alone is no longer enough. Speed is the overarching mandated. Speed to market for products; speed to hire for talent.”

HSK says despite the gloomy job market nationwide, there is a “staggering volume of demand” for digital product development, content development, sales and marketing professionals. As New York Times columnist, Thomas Friedman wrote last week, companies “are increasingly picky. They are all looking for the same kind of people —people who not only have the critical thinking skills to do the value-adding jobs that technology can’t, but also people who can invent, adapt and reinvent their jobs every day, in a market that changes faster than ever.”

Finishing what you start (video)

So if you’re an employee, manager or business owner, how do you make sure you and your teams are ready to really finish what they start? We recommend this video by best-selling author and futurist, Seth Godin who argues we don’t need people to be more creative. We need people to keep thrashing and have the courage to ship—when they say they’re going to ship.

WARNING: The vid’s about 18 minutes long. Don’t view it unless you have time to watch it all the way through and give it your undivided attention.

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Tipping Points: Digital Ad Spending to Top Print in 2010. Facebook Overtakes Google.

In digital economy, everything’s a commodity except ideas.

In today’s wired world, the most important economic competition is actually between you and your own imagination, wrote New York Times columnist, Thomas Friedman on Sunday. More on that in a minute.

Facebook Overtakes Google as most popular US Web site

Whether or not Facebook fits into your marketing plans, it’s important to note that the ubiquitous social network destination overtook Google as the nation’s most popular Web site according to a recent report by Hitwise. Checking Facebook accounted for more than seven percent of all Web visits, the report found. Studies show that the average American spends seven hours a month on the site and that 44 percent of all social sharing takes place on the platform. But as Online Metrics Insider pundit, Pat Lapointe recently noted, research from Keller Fay Group clearly shows that only about 10 percent of total word-of-mouth activity occurs online. Further, it establishes that in MOST categories (not all, but most), the online chatter is NOT representative of what is happening offline, at kitchen tables and office water coolers.

Digital advertising to eclipse print in 2010

While print advertising is expected to rebound slightly into positive territory, more and more signs are pointing to 2010 as the year that digital advertising officially surpasses print. Legacy media is one area that could certainly benefit from fresh ideas, or more to the point, executing on those fresh ideas. A new study from Outsell, a consulting and research group serving the information industry, recently released findings of its annual survey of over 1,000 U.S. advertisers and marketers. Altogether, U.S. advertisers and marketers plan to spend $368 billion in 2010, Outsell found -- up 1.2 percent from 2009. Within the 2010 figure, 32.5 percent ($119.6 billion) will go to digital, versus 30.3 percent ($111.5 billion) earmarked for print.

In another new study, Kantar Media found that print media in 2009 underperformed the entire industry as a whole, off 17.5% versus 12.3 percent, for the year and down 11.5% for the fourth quarter. B2B magazines particularly took it on the chin, down 26.2 percent for the year, versus a 16.6 percent for consumer magazines (which are down only three percent so far in 2010according to Media Industry Newsletter). As in previous years, print ad revenue declines will fall heaviest on newspapers -- with Outsell forecasting total ad revenues of $27 billion in 2010, down about eight percent from 2009. Outsell also sees revenue for print directories falling about eight percent to $11.6 billion. But it's not all bad news for print, as Outsell predicts a two percent increase in ad spending for magazines -- rising to $9.4 billion – reversing a several year long slump.

"The advertising recession began to ease in the final two months of 2009 and preliminary figures from the first quarter of 2010, when compared against the abyss of a year ago, indicate many sectors are experiencing growth," noted Jon Swallen, senior vice president of Research at Kantar Media in a company news release. As with other forecasters, Kantar says the best performing media category in 2009 was cable television -- losing just 1.4 percent for the entire year and up 2.7 percent in the fourth quarter. Network TV was down 7.6 percent for the year although it exceeded cable TV in the fourth quarter, up 4.1 percent.

Why ideas can’t be commoditized in the digital era

Today, just about everything is becoming a commodity, except imagination, except the ability to spark new ideas, New York Times pundit, Thomas Friedman notes: “If I get an idea, I can get a designer in Taiwan to design it. I can get a factory in China to product a prototype. I can get a factory in Viet Nam to mass manufacture it. I can use Amazon.com to handle fulfillment. I can use freelancer.com to find someone to my logo and manage my backroom. And I can do all of this at incredibly low prices.

The one thing that is not a commodity, and will never be is that spark of an idea. Thanks Thomas. That’s as true in 2010 as it was in 1910.

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Dow Holds Above 9,000. Home Sales Improve

Recession innovators extending lead over the pack. Mobile advertising gains.
In most parts of the United States, the recession seems to be losing steam and economies are beginning to stabilize, the Federal Reserve said today in a snapshot of economic activity from across the country. This assessment is based on the Fed’s latest “beige book” (PDF)which gauges economic conditions from 12 distinct areas of the country.

“Recession is over, economy is recovering — let’s look forward and stop the backward-looking focus,” John E. Silvia, Wells Fargo’s chief economist, wrote yesterday in a research note.

We're one-third of the way out of the recession, according to Kiplinger's Recovery Index, which tracks six key economic indicators. The National Association of Realtors (NAR) just said that sales of previously occupied homes rose 3.6 percent last month, the third straight month to do so. It was the highest level of sales since October 2008 and beat analysts expectations. Meanwhile, the Case-Shiller index of home prices in 20 metropolitan areas, produced by Standard & Poor's, rose 0.5% in May from the month before, the first increase after 34 straight months of decline. If you’re keeping score, the median sales price nationwide is now up to $181,800, up from 174,700 last month -- still 15 percent below $215,000 a year ago – but a key positive trend to be sure.

According to Kiplingers, home prices may be bottoming out after two years of decline (some say they bottomed out six months ago), but at least people are buying stuff. Said the Kippies: "Home sales activity is a key indicator of the economy's health because buying a house involves such a large commitment of funds, reflecting confidence about the future. Rising home sales also show that banks are willing and able to lend, which is another requirement of a healthy economy."

But, what about the sky high unemployment rate? Oh that. Jobless claims are still at record highs, but since unemployment lags behind other economic indicators, that’s not the downer it may appear – provided you’re among the lucky few still working. Breaking from historical patterns, the unemployment rate -- currently at generation-high 9.5 percent -- is ONLY one to 1.5 percentage points higher than would be expected under one economic rule of thumb, Lawrence Summers, President Barack Obama's top economic adviser told the Wall Street Journal last week. Since the recession began in December 2007, the economy has lost 6.5 million jobs, 4.7 percent of total employment. The unemployment rate has jumped five percentage points, while the economy has contracted by roughly 2.5 percent.

If you can take a moment to ignore the painful shrinkage to your retirement account, investments and college savings plans, the midsummer stream of earnings reports from major companies is refreshing, and so is the market's reaction to them. So far, July's quarterly results are reassuring in the macro view. Neither the economy nor the indexes are on the verge of backsliding, and they've helped push the Dow above 9,000. Some 61 percent of the companies in Standard & Poor's 500-stock index to report for the quarter beat analysts' forecasts.

White House budget director Peter Orszag and Fed Chairman Ben Bernanke have all talked publicly about the unusual disconnect between growth and employment. Though today's disparity between growth and jobs is especially stark, a jobless recovery wouldn't be new: The past two recessions were marked by firms reluctant to resume hiring right away after demand recovered. The current disconnect could reflect an unanticipated surge in productivity -- companies finding ways to increase output with fewer workers. That could set up the economy to grow rapidly in future years. Rising productivity is the linchpin of economic growth and rising living standards.

As history shows time and time again, if the wisdom of the crowd thinks things are getting better, then they eventually WILL get better, because so much of our economy (and marketing strategy) is based on psychology, rather than true fundamentals. as we predicted earlier this year (“Recessions Can Spawn the Best Ideas”) companies that hunkered down during the depths of the downturn – rather than full scale retreat – are starting to show the fruits of those decisions.

Innovation Rules

Last week Apple Computer reported its best non-holiday quarter ever -- earnings up 15 percent -- despite continued malaise in the overall electronics sector. Meanwhile the U.S. financial markets leapt to their highest level since November on news that The Conference Board’s Index of leading economic indicators rose for the third straight month in June. While the increase was a modest 0.7 percent, the index hasn’t had a three-month win streak since 2004 and seven of the 10 data points it tracks showed improvement including building permits. The S&P 500 Index – in which 70 percent of companies have posted better than expected earnings -- is up 5.3 percent for the year and up 41 percent since its early March nadir. The broader Wilshire 5000 Index is up 7.5 percent for the year.

Analysts point to unexpectedly strong sales of Macintosh computers and a surge in iPhone purchases. We’ve been banging the “innovate when times are worst” drum for months here in this blog and Apple’s an example of why. Its products work and function the way the human brain thinks. {Disclosure: we have not financial or promotional interest in Apple Computer, Inc.). Apple customers – not corporate I.T. wonks or Indian outsourcing farms – control the customer experience.

“We’re making our most innovative products ever and our customers are responding,” said Steve Jobs, Apple CEO in a statement. Shaw Wu, a Kaufman Brothers analyst, told the New York times that Macs were “resonating with increasing numbers of customers, as it is arguably the best platform for what people do today, which includes Web surfing and creating and managing content.”

Thanks to the Web, the rules are dramatically changing in the music industry too. The Internet, not record labels, is increasingly calling the shots when it comes to promoting and distributing music. Physical album sales fell 20 percent to 362 million last year, according to Nielsen, but sales of individual digital tracks rose 27 percent to 1.07 billion – that’s right billion – more than enough to make up the shortfall.

Major record labels no longer have an iron fist on creating and selling professional music and getting air time on the radio. Polyphonic and other savvy startups are running their record labels like VC firms, by investing in promising bands, allowing them to record their own music and choose outside contractors to handle their publicity, merchandising, touring, etc. Instead of groveling for advances and praying for royalties if they create a hit, musicians share in all the profits from their music and touring. Guess what, they’ll also maintain ownership of their own copyrights and master-recordings. Can you imagine Sony, Warner or EMI cutting deals like that with up-and-comers, let alone their stars?

The year of the true multimedia campaign?

Three in four (74%) of advertisers using the Internet are doing so more than they did a year ago, while half (49%) who use print are using it less, according to a recent Linked In / Harris poll (PDF) of 1,015 ad agency and marketing execs nationwide. The poll not only found 69 percent of mobile marketers are using the medium more than they did a year ago, but more than half of online advertisers overall, are using the Web as part of a broader multi-media campaign. Just one in seven (14%) Web advertisers, are committing dollars only to online.

We’re not out of the woods by a long shot. But those who continued to trust their instincts, resourcefulness and innate sense of direction during the darkest days are going to be the first ones seeing the clearing through the trees.