Tuesday, May 31, 2011

Innovators as Interpreters

Our colleague, intellectual property counsel, Jim O'Shaughnessy recently suggested we read the book, Innovation: The Missing Dimension by Richard K. Lester and Michael J. Piore (2004). Their essay rightly suggests that not only does innovation require both analysis and interpretation, but that for a variety of reasons, we tend to over-do the analysis and under-do the interpretation. This is one reason, the authors contend, why innovation is so often “missing.”

Years ago I learned the importance of striking a balance between analysis and interpretation in another context—when I was learning how to analyze very old and familiar biblical texts and attempting to craft something new and meaningful for my Sunday morning listeners. Text can be analyzed. Context must be interpreted—both the context of the text and that of the listeners. If one relies on analysis alone, the message tends to be lifeless, dry and at best difficult to hear. If, on the other hand, one relies only on interpretation, the message risks losing substance, even though it may be easier to follow with the ear.

The major point of the book struck a chord with what often happens at the so-called “front end” of innovation efforts. In the rush to discover some new and proprietary insight before it is generally recognized (particularly by the competition) what consumers say or do is often canonized and regarded as sacred “text.” Prematurely we apply sophisticated analytical methods to these texts, often ignoring important elements of context. Quickness to analyze is aided and abetted by a general discomfort in dealing with ambiguity. The result is too often partial or erroneous conclusions regarding what consumers want and need and how important it is to them.

"There is no information lacking…something else is lacking…a something one person cannot directly communicate to another,” the Danish philosopher and theologian, Soren Kierkegaard, stated over 100 years ago. His observation seems just as relevant today as it undoubtedly was back then.

One of the first, if not the first, challenge for the innovator is to interpret—to creatively “read” the end-user's context—whether cultural, technological or otherwise. To discover and understand something important the competition does not yet see concerning current or potential end-users—for example, “a job the consumer needs doing”—requires interpretive ability as much, if not more, than analytical acumen. And interpretation is best done through direct and indirect conversations with others, frequently, Lester and Piore suggest, requiring a “protected” space.

Recently I found myself trying to define the word “protocol” to my eight-year-old daughter. (Why we were mutually interested in that word is another story.) My first attempt led me to tell her how diplomats rely on protocol to communicate correctly between two countries with very different languages and cultures. When I realized that illustration wasn't working, I tried defining “protocol” from the world of computers and the Internet. I said, “You know when you want to visit Disney.com?  It's a protocol that allows your computer to find and connect with the computer over at Disney.com.” She actually understood that definition better than my first attempt with diplomacy.

Established protocols are available and essential for interpreters to follow wherein interaction and communication patterns are known. However, for the innovator who deals with novelty, established protocols don't yet exist, patterns of interaction and communication are unknown. There is no established protocol. The job of the innovator is to create one—to make a meaningful connection. And this requires interpretation.

The innovator is an interpreter. He or she stands between two different worlds, each with its own linguistic and cultural signatures. To effectively interpret requires sufficient knowledge, empathetic imagination and understanding of both to adequately discover a new and meaningful connection between the two. Proficient interpreters can work quickly to translate the words—text. Excellent ones translate the text in context bringing richness and meaning in the appropriate intonation of their voice.

Successful innovations are built upon the foundation of interpretive activity as they arise from the discovery of meaningful new connections across the boundaries (real or imagined) of previously unconnected worlds. The innovator’s job is to design and build those bridges, based on firm foundations of understanding, both in the world of the company's know-how and the other world—the world of meaning and value to people the innovator seeks to serve.

Perhaps this is what Albert Einstein was alluding to when he mused, “Imagination is more important than knowledge.” To that we might only add, “empathy.”

This article was originally published in Innovating Perspectives in May 2005. For this and other back issues of our newsletter, please visit our website at innovationsthatwork.com or call (415) 460-1313.

Tuesday, May 24, 2011

The Twins of Innovation: Discovery and Invention

One of the lessons we learned this past year reminds us that our entrepreneurial initiatives have a better chance for success when technical invention is linked to market discovery.  

All too often our efforts are unbalanced with one side of the equation is emphasized more than the other. Complete commercial success can easily elude a brilliant technical invention because it lacks a match in demand from customers and end-users. Likewise, success can also elude the insightful discoverer of an emerging customer need without the technical and proprietary means to exploit it.

Some innovations that came from the successful integration of market discovery and technical invention include:

  • The invention of a proprietary process technology for non-woven materials along with the discovery of the prevalence of incontinence among an increasingly aging population led a Fortune 500 company to create a significant new market and product category.
  • The interest of a few bikers to ride trails rather than paved roads, coupled with the appearance of larger knobby tires, stronger bike frames, more gears and shorter handle bars led to the introduction of the first mass produced mountain bike which transformed the entire bicycle industry.  
  • The invention of the bread machine radically changed the bread baking habits of consumers and thereby significantly affected the competitive demand and dynamics of ingredient suppliers.
With such compelling evidence for the importance of matching technical invention with market discovery, it is a bit surprising how often we short change one or the other. Is it because the people who can do both, the “flute playing brick layers,” as my mentor used to call them, are so few and far between?

Perhaps a partial answer lies in recognizing that while newness—the key attribute of both patents and superior marketing—can come from either technical inventiveness or market insight, it is much better to source that newness from both sides.  

This article was originally published in Innovating Perspectives in January 1997. For this and other back issues of our newsletter, please visit our website at innovationsthatwork.com or call (415) 460-1313.

Tuesday, May 17, 2011

The Free Range

The “free range” is a metaphor the Mavericks Network uses to describe the sources of innovation and organizational renewal, particularly for corporations in need of rediscovering their entrepreneurial fire. 

“Free range” denotes the variety of different places and approaches to which successful veterans of corporate innovation turn for their inspiration (and their perspiration!). Other metaphors include “leading edge,” “out-of-the-box” and “window of opportunity.” The free range goes hand-in-hand with these other metaphors, especially in the context of the maverick way.

All of these expressions point to what Peter Drucker recognized long ago: “Innovation demands systematic abandonment of the established, the customary, the familiar, the comfortable . . .”  

“The Free Range is an area that is rich with the potential for corporate growth and innovation. By being “unbranded,” the maverick is able to cut across both internal and external borders, bringing people and ideas together . . .the free range is a place where the rules are being formed and reformed. Two things are battling it out—liberation versus domestication. And that’s what the free range is about. It is a place of conflict. And the maverick collects conflict.”  (from The Maverick Way).

Albert Einstein said, “Where the world ceases to be the scene of our personal hopes and wishes, where we face it as free beings, admiring, asking and observing, there we enter the realm of Art and Science.” The free range is where the seeds of innovations are not only discovered, but initially fed and nourished.

Free range means getting beyond the boundaries of our own paradigms, the limitations of our own experiences, the “blinders” of our own point of view. Mavericks are uniquely equipped to accomplish this for corporations as they are able to evade the organization’s antibodies to change (antibodies that are quite sensible in a world of too many options).

The free range is both a destination and a journey. It is a part from the “safe” confines of the corporate “pasture,” an exploration of realities outside the normative and at times confining corporate “realities.”

In the free range, mavericks search for, participate in, and learn from what is new and dawning. Mavericks do this by immersing themselves as much as possible in these other emerging realities. Thus immersed in the new reality, and because of their corporate affiliation, mavericks are in a position to discover and cultivate potent connections between observations, ideas and people. These connections are the sources of innovation and corporate renewal. For each company the “free range” may be a different “place” and a different “time.”

The notion of free range captures a frame of reference (if not a frame of mind) that is similar to the notion of the [entrepreneurial] window of opportunity. Just as the maverick is a person who doesn’t quite “fit,” so too does the free range offer the chance to discover innovations and opportunities that do not seem to fit, at least initially. Mavericks help find the fit, if it is to be found.

As Gary Hamel put it: “New wealth is created not by prophets but by heretics. . .Not satisfied with something better, they want something different.” Experienced mavericks know how to navigate in their corporation’s “free range” such that the proximity and timing of the opportunities these mavericks discover there are more attractive to their corporation.

The  Free Range is:

•  A method of gaining access to unconscious thoughts or ideas which are useful in throwing off our inhibitions and playing like children.

•  A way of forming unorthodox thoughts based on independent reasoning by doubting conventional wisdom.

•  A place where one can choose between alternatives such that the result is an unrestricted creative or innovative action.

•  A wide open space where one can roam freely and graze without restrictions in order to exploit it.

•  A place to enjoy unrestrained liberty of action to change all dimensions of an idea or thought.  

This article was originally published in Innovating Perspectives in September 2001. For this and other back issues of our newsletter, please visit our website at innovationsthatwork.com or call (415) 460-1313.

Tuesday, May 10, 2011

The Fuzzy Front End of New Product Development

Thomas Edison said that genius is 1% inspiration and 99% perspiration. As one of the prolific inventors of all time, Edison undoubtedly knew what he was talking about. However, I don’t believe he ever indicated which comes first, the inspiration or the perspiration.

Generally it is assumed that inspiration precedes the sweaty work of invention. But recently my appreciation has grown for the perspiration that precedes inspiration, the labor that yields the powerful one-percent of which Edison spoke. The old adage “chance favors the prepared mind” speaks of the same truth.

Many companies are chronically dissatisfied with meager returns from their innovation efforts. This dissatisfaction may stem partly from an impatient and premature rush to generate new ideas. Managers with responsibility for new products or other innovation initiatives are under pressure to show progress for their efforts. In their rush to results, they can jump too quickly into the creative phase looking to the idea generation process as the way to get inspired. But without spending appropriate time and energy to discover, examine and understand the entrepreneurial opportunity, the corresponding innovation is undernourished.  And this malnutrition results in weak, uninspired ideas, not to mention a lot of sweat.

When the generation of ideas substitutes itself for the discovery and understanding of an entrepreneurial opportunity, then creativity is easily misdirected. Insight-less idea generation has left many innovation efforts stuffed with activity but starved for substance. What inspiration we can muster is focused on opportunities that are often too small or offer insufficient promise to compete for resources from corporate initiatives. 

Business planning and idea generation are absolutely necessary in new business, category or product development efforts. However, they often do not yield the kind of inspiration that direct observation and discovery can when done explicitly and purposefully. This discovery phase has been called “the fuzzy front end” of new product development.

A central task of the fuzzy front end is to get in front of the trends before everyone else; in other words, to discover underlying changes in behavior that reveal new trends before they are generally recognized.  Devoting appropriate time and attention to the fuzzy front end of innovation efforts before jumping into the planning and idea generation phases, can help managers make better decisions regarding which new opportunities to pursue.

The fuzzy front end—the perspiration that precedes the inspiration—is more about discovery than planning, more about observing changes in human behavior than analyzing market behavior, and more about creatively anticipating trends than analyzing existing trends, product categories or competitive behavior.

The fuzzy front end demands a willingness by managers to be lost for a while. The nature of the work in this phase is entrepreneurial and unfolding rather than managerial and administrative. Many managers spend insufficient time, patience and effort in the fuzzy front end of innovation.

Lack of attention to fuzzy front end is not surprising given the discomfort of uncertainty often felt during this phase. But doing the fuzzy front end of an innovation effort well and patiently can help address the chronic dissatisfaction companies have with the new product process.  In the end, an inspired, entrepreneurial observation may be even more valuable to a company than a creative idea.

For example, in the 1970s, research consultants were looking for new business opportunities for the Kimberly-Clark Corporation. In their search they uncovered two seemingly unrelated facts. Once had to do with the demographic trend heralding a burgeoning older population. The other fact came from the medical community—a significant percentage of people over the age of 65 years experience incontinence. These two facts were then related and coupled with a new non-woven technology called Coform, which was invented by a Kimberly-Clark engineer. This combination led not only to a new product, Dependsรค, but also gave birth to a new market, product category and a very successful new business.

A large part of the entrepreneurial challenge for established companies is to find an idea that is big enough to warrant the investment despite the risk and to divert resources from other priorities, yet related enough to corporate interests that it makes sense to pursue. It is not simply a question of fit. It is a question of fit and the size of the opportunity.

The dual challenge of the fuzzy front end is to both discover what is new and find the vocation of your organization.

Almost a decade ago, Peter Drucker made a similar point in his book Innovation and Entrepreneurship.  He said, “There is actually no empirical evidence at all for the belief that persistence pays off in pursuing the brilliant idea. Bright ideas are the riskiest and least successful source of innovative opportunities. The casualty rate is enormous. Most successful innovations are far more prosaic. They exploit change. And thus the discipline of innovation is a diagnostic discipline: a systematic examination of the areas of change that typically offers entrepreneurial opportunities. 

So where do you look for inspiration? The perspiration that precedes inspiration requires both an outward and inward search. Many have made the mistake of doing only one or the other, not both. The dual challenge of the fuzzy front end is to discover what is new and find the vocation for your organization.

The outward search can be as simple and mundane as simply getting out, wandering around and making observations, especially of people who are experimenting with new ways of living and working.  More formal activities can include various scanning activities, listening to customers in roundtables, “unfocused” focus groups, and structured or unstructured interviews, conducting expert panels with technologists and leading industry analysts. The goal is to identify the early indicators of significant change. A good way to do this is to make your own observations.

The inward search should be driven by an attempt to understand the underlying causes of expected events, results and discrepancies between what is and what ought to be in the context of the current business.  Surprise results, even when they are successes, should be closely watched. They may be the early warning signs of major change.

The fuzzy front end should be approached with a balance of curiosity, open-mindedness and humility.  And though it may not be very comfortable to put ourselves in the middle of ambiguity, it can bring us closer to an entrepreneurial opportunity your competition does not see. As the French writer and philosopher Voltaire noted, “Doubt may be an uncomfortable state, but certainly is a ridiculous one.” 


Potential Sources for Innovation

The following are symptoms of change worthy of our attention as they are likely to signal underlying opportunity for innovation. These sources are listed in descending order of predictability and reliability; yet those sources later in the list represent higher rewards for those who do succeed.

1.     Unexpected events and results.
2.     Incongruities
3.     Process needs
4.     Structural changes in industry or market
5.     Demographic changes
6.     Changes in values, attitudes and perceptions
7.     Arrival of new knowledge
 8.     The “bright” idea

  Sources from Innovation and Entrepreneurship: Practice and Principles by Peter F. Drucker

This article was originally published in Innovating Perspectives in October 1995. For this and other back issues of our newsletter, please visit our website at innovationsthatwork.com or call (415) 387-1270.

Tuesday, May 3, 2011

Strategic Patenting

Most people think of patenting after something has been “invented.” Increasingly, many corporations are patenting before the invention has been demonstrated physically (but after it has been conceived).

Lee Murrah, a patent attorney with a passion for innovation at Meritor Automotive, has come up with a “Window on Patent Values.” Murrah's window offers a clarifying perspective on the underlying motivations for patenting inventions. His window also describes the different types of invention workshops we have organized and facilitated over the past five years. 

Instead of waiting for the moment of invention before applying for a patent (i.e., “retrospective,” or patenting after the fact), many corporations are patenting the results of “thought experiments” (i.e., “prospective,” or patenting before the fact). While many regard “prospective” patents as merely “paper patents,” increasingly these prospective patents are commanding respect from rather large corporations.

Many view the value of patents as relevant only to technology that falls within the scope of their current business. However, as companies like Texas Instruments are demonstrating, owning intellectual property in areas outside your current scope of business may provide you with not only a healthy source of income from fees, but also leverage with competitors, suppliers and even customers.  

What value a patent retains for the holder depends upon where it shows up in the Patent Window. Retrospective patents most often prevent copying and are written that way. However, retrospective patents can also be created and used to gain leverage with other players in the industry, even where there is much prior art. Someone may, for example, patent a better way to implement another's invention, thereby gaining some bargaining power with the “original” patent holder. Prospective patents, on the other hand, can either preserve the envisioned future, or they can “prospect” options that attract other inventions, investment and ultimately, by means of technology, influence end-user behavior.

What are your patents worth?  It all depends upon what your are trying to accomplish with them. But whatever your reasons, conceptual inventions (that you patent) may be a cost effective way to strengthen your portfolio and preserve your options.

This article was originally published in Innovating Perspectives in March 1999. For this and other back issues of our newsletter, please visit our website at innovationsthatwork.com or call (415) 460-1313.