February 27, 2012

Innovation’s 20 Questions

From the start – this will qualify as a TL/DR.  If you want the fast view, without any detail, here it is.

At last, some simplicity around Innovation.  I’ve seen and evaluated a lot of frameworks for delivering innovation in the organization.  A lot of them are very pretty.  They are lofty and fluffy.  I wanted to take away all of that and give you something extremely practical and real.  Normal language.  No really big words.  Just a set of radically simple questions to help you determine if something should qualify to receive the time and attention innovation deserves from your organization.

Face it, innovation requires care and feeding.  It requires time and effort.  It requires creativity and collaboration.  So, I broke up a quick and simple 20 questions into 4 categories to see if there was a quick start approach to enabling ANY organization to begin to collect its thoughts on any type of innovation project. These are not intended to be exhaustive.  They are intended to provide the right level of conversation for your organization to move from idea to actions.

New and Different

Is it new?  This assesses if, when and how it has been done before – and what was learned.  It also better assess what’s changed to enable it now.

The goal of these questions is to remove the hype and novelty – which are interesting but not helpful.

Being able to articulate clearly what the differences are between what is and what could be is necessary.   The hype really should be pressure tested in “Why does it matter?” A feature change – unless it reinvents the user experience is novelty, not innovation.  It is concept of making a difference.

In examining “Is the change real?” you address two aspects:  how far along is it – proposal, prototype, production?  – and what are the current forces that will bring about the magnitude shift to underpin success.

With “What competes?” we take the broad look at replacement.  Not faster horses, so to speak but an understanding of what is this intended to replace or open up markets for.

“Are there exemplars?” asks for context.  It was with this question in mind, we presented you with TEDKinect Hacks and MIT Media Labs. Many technologies garner niche adoption before they get their big bang.  You need not have invented it to innovate it.  It allows you to examine where it sits (yet another reason I found the frameworks we introduced in the 12 days of innovation valuable: future exploration networkenvisioning tech, trendwatching.) Consider uses of, for instance a technology or technique that is analogous or aligned from which we can draw reference.

The decision gate at the end of your assessment is:  Are we different enough and is the marketplace ready? This will be informed gut feel, leap of faith and hopefully all the evidence of change you’ve amassed.

In Service Of…

We addressed the what – and now we need to address who and how.  Who benefits?  This addresses who wants/has need of the innovation – how can we find them, help them?  How do we disrupt the current service models?

Again, making something cool is invention.  ”Who is served?” defines the underserved or emerging group that benefits.  So, the first question is not some target group with specific demographics attached.  It addresses the consumers of a proposed innovation.  In detail.  More than a few sentences and likely less than a page, and it should also answer question 7 – “Why do they care?”  Where is the value in it for the consumer? What promise is being made, and can it be fulfilled? Most likely, you will get part of this wrong.  It’s okay.  The people who made hardened bike frames that withstood little kids’ falls probably didn’t foresee the first people who took their old-school bikes up a hill and beat the crap out of them going down as mountain biking either.  But they watched and responded.    Which leads us to “how quickly?” You have to be attuned to the marketplace – not the major marketplace.  That’s not where innovation will happen.  The fringe.  Average has NO place in innovation (or much of any place else either).  You’re not innovating for the “average” user.  Those people won’t spend money on your bike, augmented reality device, gesture-based interface or rapid checkout.  You only care about the ones that will at this point.  But that gets us to the last:  ”replacement/displacement?”  In many cases, you will be changing how something is done today.  This question gets you to think about how to address the competition or define the market you are making in terms your executives and you board can understand.  If you were Derek Sivers, describing CD Baby, you’d likely say “I am replacing a system that favors distributed access, intermediaries and labels with a simple means for artists to get music to fans directly.  I need to be simple to use, knowledgeable and friendly in a way current systems are not.”  He didn’t say that – I did, but I think it’s probably reasonable.

The decision gate here is:  Is the market engaged enough to make it happen?

Scope and Scale

Now we’re getting down to brass tacks:  What criteria is necessary to succeed?  What are we testing?  What are we learning?  Does the idea scale (does it need to)?  How big and how quick?

So the first question “how do we handle barriers?” examines entrenched business model, industry standards, safety issues, privacy concerns or contractual obligations. It however doesn’t say you need to heed them.  You simply want to be able to address how you’re different.  If Steve Jobs gave a shred of credibility to “entrenched,” there’d be no iPhone.  That being said, he also understood how it fit.  It’s a full on capabilities assessment.  Where do you have what you need?  Where will you get what you don’t have?  What’s build?  what’s buy?  If Jobs had to take on creating a distribution network for it, against entrenched approaches, he might not have found success.  You need to examine how your approach to the barriers addresses models for manufacturing, supply, purchase, service and sharing information.  You need to specifically identify what areas around your innovation that will require assistance, change, personnel and solutioning.  PS – if you don’t have those things, you probably have a feature, not an innovation.

You will not be able to get around the Risk question.  Nor should you want to.  What you are doing is inherently risky.  I have quoted Gimli the Dwarf from Lord of the Rings before:  ”Certainty of death. Small chance of success. What are we waiting for?”  Because simply put, if what you are doing is magical, and helpful and better, you have to focus on how big that change could could be.  You also need to have a battle plan to address the s@#t you will face.  You might be cannibalizing yourself – such as an agent-led insurance company who buys an online company understanding the potential impact to its own portfolio.  Your competition might respond faster or earlier than planned and deep discount you out of business.  You might not find you’ve been disruptive enough to garner adoption.  They’re very real considerations.  Covalent offers a simple risk consideration model, if you want a fast scoring method.  Just email me, it’s free.

I understand if at this point, you’re not exactly as excited as you once were about your innovation.  We’ve been pressure testing it.  You have to hang in for one more question on the Debbie Downer path…and it’s sizing.  ”How big could it be or how small can it be?” is a boundary question.  This is the question of “free.” Someone recently expressed to me their business model and after an hour of conversation, with my marketing hat on, I asked, “Can you make it free?  Or freemium?”  From the sound of the crickets, I knew that wasn’t a possibility.  The question he had to answer was what was the membership threshold- and would enough people pay a hefty price for his community to make it worthwhile.  He didn’t need a lot of companies to join.  He need a sufficiency.  The good news was, he knew EXACTLY what his bottom threshold was.  Everything from there was upside, at least until renewals.  It’s a problem for the business model to solve, but at least it has a slightly longer shelf life.  What if what you are doing becomes commoditized?  Better you assess that now.  When you’re running financial projections or models, you have to do one that says:  ”What if we gave it away?”  It’s not a damn commercial.  It’s a reality.  Facebook – that valuation of monstrous proportion – based on free to start…Twitter…Tiny Tower…  You need to address the free equation no matter what.  At all costs, take your least optimistic project and reduce it by half.  Do you still have a business proposition?  (I’m sorry, it hurt me to say it too.)  This is where you compare the costs to create and service to the revenues you intend to produce.

The last question is prototyping, beta, testing.  Not the focus group.  Please, anything but that.  Take an artificial environment, introduce more artificiality and a mirror.  See how that goes for you.  Unless you can put something real, nearly real or at least more than conceptual in front of people, don’t waste your dollars.  Adam Cutler at IBM Interactive long ago taught me the benefit of getting something inexpensive, useful and imperfect up and running.  Inexpensive so you aren’t afraid to make changes.  Useful so users begin to play.  Imperfect so people don’t feel guilty with their constructive criticism (man’s a genius, he created this, so is his brother, Matt, who is a serial innovator).

Decision gate:   Do we have or can we buy/obtain the resources needed to make it interesting?

The Obstacle Course

I met with a Fortune 50 who told me a project is a project is a project.  After I choked that down, I asked what they did to speed things to market that had executive priority.  They told me they had no path.  I’m a passionate person, as many of you know.  The shock on my face must have lasted for at least a minute. It’s damn good thing they have a sizable existing revenue stream.  In this set of questions, you need to address the most intangible and intractable:  the organization.   What needs to be removed to clear a path for innovation in the  organization and among its adjunct team members?

Who owns it?  No destination is ever reached unless someone is driving.  (Okay, I heard you smart-alecks offer up teleportation – someone is still driving.)  You need an owner to keep the wheels moving forward.  At the same time, you need an executive who is willing to stick their neck out.  Most innovation costs something – time, talent, resources.  It ain’t innovation otherwise.  So, you need to figure out what is in it for your Champion.  Sometimes that is “just” sincere belief.  Sometimes you come across something you simply belief in so much you are willing to put your time, energy and intellectual capital into it.  Somedays, you better have a damn good business case.  Even then, it still takes belief.  Shop for the single biggest believer with the budget to make it so.  Dont’ alienate anyone, but find the person who can tell the story better and with more passion than anyone else.  That person will likely have to defend your ask for cash in front of the Board, and everything you’ve done to date is simply the background sonata to their aria. If you are that person, I thank you every day.

“The red team,”  ugh.  I know you don’t want me to say this, especially not after this point, but embrace them. They will only make you better.  You cannot sacrifice what you believe in, what you champion, but they will absolutely help you find holes, additional considerations and market-based considerations.  You’ve come this far, so I think you are unlikely to be swayed, but they have real questions you need to answer.  A good red team is invaluable.  They’re even better if you tell them to poke holes.  Embrace them and they are actually your biggest allies in the end.  However, when you’re sure you have something, be sure you understand the “fast path.”  I spoke about a project being a project – there is no surer way to stifle innovation’s progress.  Understand what you can skip, how you can gain resources, what your Champion can influence.  They will help you avoid the wretchedness of traditional organizational timelines that equate to missed market opportunities.

Collaboration is crucial.  Albeit, there are no fewer than a million articles on innovation collaboration.  I shall not quote them, instead I shall recap them.  There are very few voices in an organization that are not valuable to have as allies.  Earn them, keep them, support them with talking points.  Use their feedback.  Encourage them.  Innovation – as well as nature – abhors a vacuum.  You need a full-on football team to do innovation.  Including defense to prevent the people who would shut you down.  Prepare for it.

Inertia is that last item.   And there is no greater risk among anything said in this looooonnnngggg post that that.  Organizations are designed to protect the status quo.  By now, you know who is a friend of the project and who is not.  You know the timing and the opportunity.  You know what you can skip and what the risks are.

Decision gate:   Can the obstacles be cleared through ownership, support and collaboration? (The answer here is always yes, or my friends, you need to reconsider your original proposition or your company’s commitment to innovation.)  Go forth and prosper.  And remember the best advice Yoda ever gave us:  Do or do not.  There is no try.  -c-