That's Just the Half of It!

What you know is only half of innovating. The other half is the new knowledge you can and must create.

After years of helping others generate ideas, I am now humbly aware that idea generation is less likely innovation’s critical path, despite what many assume. Ideas—particularly ones that deserve serious attention—are more likely outcomes, not the input, driving successful innovations. Peter Drucker alluded to this over 25 years ago when he declared in Innovation and Entrepreneurship that the bright idea is the least reliable source of innovation.

Innovation’s more likely critical path is knowledge-creation—what most of us call learning. Strong ideas come from knowledge-creation. Weak ones eventually reveal some form of knowledge omission or commission, especially about what is valuable to the customer. When R&D-based innovations break through an otherwise “me-too” crowd of look-alike products, it is not because someone made a lucky guess. It is because some new learning occurred, some new observation was made, some knowledge was created, and correspondingly, something new and valuable was conceived.

What most see in successful innovation are outcomes. However, the paths leading up to these outcomes are filled with:

•     experience and experiments (physical, virtual, mathematical) that create data,

•    interpretations of data that create information, and

•     applications of the information, successful or not, that create understanding of what works and what doesn't, and why...and that, in turn, develops knowledge.

These knowledge-creation paths twist and turn and cycle back, far from the mythical straight line hindsight suggests—more like a “Slinky” than a taught string.

R&D organizations are filled with knowledgeable experts—those who understand not only what works, but why. However, it is not simply what experts know that creates value.  It’s what experts do with what they know that leads to value creation—the critical path for innovating. 

The irony of the expert’s knowledge is that it can be the very thing that blocks learning, especially about the customers’ value ecosystem. It has often been said, “all value is derived from context.” If true, then to create new knowledge the expert must interpret the context (the ecosystem) in which the customer lives. That is where new value emerges and where innovation is nourished.  

Identifying where gaps are in our knowledge, especially of what’s meaningful and valuable to customers, may be where the critical path begins for the knowledge creators in R&D. Selecting and describing gaps in our knowledge may be one of the more reliable ways of targeting where we should focus our efforts. Successful innovations always seem to emerge from that kind of knowledge-creation. 

What you know is only half of it.  


This article was originally published in Innovating Perspectives in September 2011. For this and other back issues of our newsletter, please visit our website at innovationsthatwork.com or call (415) 387-1270. 

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, Dependsä, 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.

Rough and Tumble Innovation

There is a form of play that shows up in humans and a variety of other species. It is called rough and tumble play.

Some people mistake it for fighting. Yet most play scientists recognize this form of play as a—if not the—key contributor to the necessary fine-tuning of social empathy and confidence sufficient to face new and uncertain environments. This is essential for the survival and “thrival” characteristics of the species. “Roughhousing” is what my father called our rolling around on the floor together when I was a young boy. The restrained tackling and wrestling with my daughter when she was younger are also fond memories for me of rough and tumble play.

Vigorous rough and tumble play also directly contributes to an organization’s ability to innovate. Without this play, a launched innovation neither resonates with consumers nor lasts in the marketplace. This is especially true when competitive conditions in the marketplace change. Rough and tumble play is essential for the healthy development of each innovation. It is also essential for the healthy, robust and collaborative problem solving which innovators need to invent.

Many organizations have cultures that actually work against rough and tumble play. On one hand, some companies overvalue politeness. These tend to mistake rough and tumble play for fighting, and are quick to inhibit it, even to the point of avoiding conflicts altogether. Nothing could be more disastrous for an innovation’s development. Without experiencing the stresses that come from multiple iterations of trial and failure, our innovations will remain flabby or flimsy with little value traction.

On the other hand, some companies have become so rough and tumble themselves—even brutish—that internal competitors replace external ones. There simply is no play of any kind, much less rough and tumble. It is all about performance, all the time. There is no permissible time or safe place for thinking out loud with one another. Companies under significant public scrutiny are often play-deprived, especially of the rough and tumble type.

As many of you know, we have a close friendship and collaborative association with Dr. Stuart Brown, founder the National Institute for Play, a non-profit organization dedicated to advancing the science of play (www.nifplay.org). Dr. Brown has looked at how play—a state of consciousness and set of behaviors—is essential for growing the adaptive capability necessary for people to make healthy adjustments in order to thrive in a changing environment.

The more play experience one has, the greater the organism’s ability to adapt. The less play experience, the weaker the organism’s ability to adapt to changes in its environment. What hard science is teaching us about the vital contribution of play to an organisms’ adaptive capability, our experience confirms regarding how play impacts an organizations’ ability or inability to innovate.

While playing at the appropriate place and time is important, the form of play may be of equal consideration. How you play may be as important as the playing itself. Healthy innovation requires both.

Over the past 25 years, I have facilitated more idea generation sessions than I care to admit. Many of these ideations served to engage participation, and in that they were useful, but too few left any traceable contribution to a successful end result. One reason these brainstorming sessions don’t produce as much as they promise is because people often get caught up in Alex Osborne’s primary rule of brainstorming which is to withhold judgment.

My experience is to populate invention sessions with diverse but well-informed and experienced experts and ask them to go beyond their judgment, but by no means withhold it. It is their judgment that enables the rough and tumble playing with ideas, the result of which is a much higher quality of thinking.

“Fear that might keep you from voicing your real thoughts is poison. Almost nothing could be more detrimental to the well-being of the company,” says Andy Grove in his book, Only The Paranoid Survive, which chronicles his experience with Intel’s precarious navigation from memory chips to microprocessors.

We need to consider formally installing play periods right after gate reviews in the stage gate processes. Play is not only appropriate to the front end of innovation, a time and place for healthy, open dissent should be permitted and encouraged at various points in an innovation’s development. Learning applied to creating value can only be advanced when we replace conflict avoidance with safe and protected “housing” for rough and tumble play. ❑

This article was originally published in Innovating Perspectives in September 2009. For this and other back issues of our newsletter, please visit our website at innovationsthatwork.com or call (415) 460-1313.