Innovation has become an idea arms race, an arms race that most of us cannot hope to win. We spend so much time trying to consume ideas, drinking from the innovation fire hose, that we have little time to devote to what really matters: synthesis.
When we’re focused on harvesting ideas from the environment around us—either inside or outside our organisations—we are, by definition, on the back foot. We must assume that we’re not the first to see an idea, when it’s discovered outside our organisation. Nor can we assume exclusivity on the ideas we generate. As Sun likes to point out, statistically all the smart people with the good ideas work for someone else.
My guitar teacher of some years back, Tom Fryer, had a bit of sage advice. It’s pointless to try to be original, as someone will always have had the idea before you. A more productive approach is to simply plow your own furrow; focus on the problems you want to solve, steal ideas shamelessly if they seem useful, and invent what you need to fill the gaps.
Tom has a good point. The challenge with being creative is in knowing what problems to solve, and bringing together old and new ideas to create a new solution. Hoarding ideas or worrying about their source, debating the worth of internally generated ideas against those sourced externally, misses the point when we have tools like open innovation at our disposal.
Success in innovation is driven by a smart approach to synthesis. Work to solve a problem. Take ideas from around you to incrementally building something new. Learn, tuning your approach as you go.
Take Sony’s Walkman as an example, an innovation which created the market for personal music devices.
The Sony Walkman was originally designed as a music player for couples, based on Akio Morita’s observation of teenagers lugging their radios with them on vacations (an incongruity) and came equipped with two headphone jacks and a recording facility. It even had a “hotline” button, partially overriding the sound from the cassette and allowing one user to talk to the other over the music.
Of course, nobody really used it like that and Sony was quick to see that most people used it as a personal, portable music player (unexpected) and redesigned it accordingly.
The Walkman wasn’t conceived and developed in response to a brilliant idea. Akio Morita noticed an incongruity in the market, which Sony created a new product to address. When they realized that the Walkman wasn’t being used as expected, the product was tweaked to align it with reality. As Peter Drucker pointed out with his seven sources of innovation, innovation usually has more prosaic drivers than brilliant ideas or shiny new technologies.
John Boyd called this process, creating snowmobiles. His area of interest was military strategy: the challenge of creating novel, unexpected and winning solutions when dealing with a rapidly changing and constantly evolving environment. Creating snowmobiles represented a thought experiment he used to challenge an audience near the start of his briefing on strategy.
The thought experiment goes something like this:
Imagine that you are:
on a ski slope with other skiers—retain this image,
in Florida riding in an outboard motorboat—maybe even towing water-skiers—retain this image,
riding a bicycle on a nice spring day—retain this image, and
a parent taking your son to a department store and that you notice he is fascinated by the tractors or tanks with rubber caterpillar treads—retain this image.
Now let’s pull the:
skis off ski slope—discard and forget rest of image,
outboard motor out of motorboat—discard and forget rest of image,
handlebars off bicycle—discard and forget rest of image, and
rubber treads off toy tractors or tanks—discard and forget rest of image.
This leaves us with
Pulling all this together, what do we have?
As Boyd points out, there are two distinct processes at work here. First we need to pull ideas apart and understand how they will work in different contexts (analysis), building a library of interesting tactics we can use in solving a future problems. Second, we need to put these ideas back together in new combinations (synthesis), providing us with the opportunity to understand how apparently unrelated ideas and actions can be connected to one another.
How do we create a situation where we can make snowmobiles?
We often strive for diversity, as we believe diversity brings with it a range of points of view, which in turn encourages innovation. This has prompted some organisations to search for T-shaped individuals: someone professional in one area, but with complementary skills. Their broad experience, so the theory goes, will enable them to look across a number of domains to harvest useful ideas. However, this does not address our core challenge: understanding which questions to ask, the questions which will driven the synthesis process.
The first step is take a mountain climbing approach to knowledge and ideas. At each stage in the innovation cycle we need to establish camp, scout the path ahead and then prepare our tools for the journey to the next camp further up the mountain. This requires a process of constant learning, and a willingness to explore new environments. Environments which might range from the various business functions, across technical and business domains to seemingly unrelated areas, such as John Boyd’s work on military strategy.
The Low Cost IVF Foundation is a good example of this approach. The program started with a clear goal in mind: of converting IVF from a luxury of the West into a tool for alleviating the public ridicule, accusations of witchcraft, loss of financial support, abandonment and divorce, not to speak of the shame and depression associated with being childless in the third world. At each innovation camp they scouted the path ahead, exploring the environments around them, identify the problems, and challenging the conventional assumptions about how they should be solved. Incrementally, over a number of iterations, they synthesised a new approach which radically cut the cost of IVF. While the journey might seem prosaic (much like Sony’s), the result is quite profound.
To support this approach to innovation, we need to become fluent in a wide range of environments, the second step. Fluency implies that we have sufficient experience in an environment to make understanding ideas automatic. We’re not devoting our time to basic comprehension. This creates the cognitive time and space to focus on understanding the connections between ideas, and their application to the task at hand. Fluency creates the time and space for synthesis.
“A loser is someone (individual or group) who cannot build snowmobiles when facing uncertainty and unpredictable change; whereas a winner is someone (individual or group) who can build snowmobiles, and employ them in the appropriate fashion, when facing uncertainty and unpredictable change.”
Our ability to effectively manage time is central to success in today’s hype-competitive business environment. The streamlined and high velocity value-chains we’ve created are designed to invest as little time (and money) as possible in unproductive business activities. However, being fast, being good at optimizing our day-to-day operations, is no longer enough. We’ve reached a point where managing the acceleration of our business—the ability to change direction, redeploy resources to meet new opportunities more rapidly than our competition—is the driver for best in category performance. If we can react faster than our competition then we can capitalize on a business opportunity (or disruption, as they are often the same) and harvest any value the opportunity created.
Time is our overarching business driver at the moment. We hope to be the first to approve a mortgage, capturing the customer before our competitors have even responded to the original application. We strive to be first to market with a new portable music device (Walkman or iPod), establishing early mover advantage and taking the dominant position in the market. Or we might simply want to quickly restore essential services—power, gas or water—to our customers, as they have become intensely dependent upon them. Globalization has leveled the playing field, as we’re all working from the same play book and leveraging the same resources. The most significant factor for success in this environment is the ability to execute faster than our competition—harvesting the value in an opportunity before they can.
This focus on time is a recent phenomena. Not long ago, no further back than the early nineties, we were more concerned with mass. The challenge was too get the job done. Keep the wheels turning in the factories. Keep the workers busy in their cubicles. Time is money, so we’re told, and we need to ensure that we don’t waste money by laying idle. Mass was the key to success—ensuring that we had enough work to do, enough raw materials to work on, to keep our business busy and productive.
When mass is the focus, then bigger is better. This is a world where global conglomerates rule, as size is the driver for success. Supply chains were designed so that enough stuff was available right next to the factory, where supply can be ensured, that the factory would never run out of raw materials and grind to a halt. Whether shuffling paperwork or shifting widgets, the ability to move more stuff around the business was always seen as an improvement.
This is also the world that created a pile of shipping containers too behold in the Persian Gulf, during the Gulf War in the early nineties. With no known destination, some containers couldn’t be delivered. Without a clear understanding of where they came from, others couldn’t be returned. A few of these orphaned containers were opened in an attempt to determine their destination or origin; however the sweltering Arabian sun was not kind to their contents, which included items such as raw poultry, so a stop was soon put to that. The containers just kept piling up. 22,000 of 50,000 containers simply became invisible, collecting in a pile that went by the jaunty name of Iron Mountain.
Our answer was to stop focusing on mass, on having enough stuff on hand to keep the wheels of industry turning. We have to admit that Iron Mountain proves that we could move sufficient mass. The next challenge was to ensure that materials arrived at just the right time for them to be consumed by the business. We moved from worrying about mass, to managing velocity.
Total quality management and process improvement efforts finally found their niche. LEAN and Six Sigma rolled through the business landscape ripping cost out businesses where-ever they went. Equipped with books on Toyota’s Production System and kanban cards, we ripped excess material from the supply chain. Raw materials arrive just-in-time, and we avoid the costs associated with storing and handling vast warehouses of material, as well as the working capital tied up in the stored material itself. Quality went up, process cycle times shrunk, and the pace of business accelerated. Much like the tea clippers from China in the 1800s, with the annual race to get the first crop back to London for the maximum profit (with skipper paid a profit share as an incentive along with their salary), we’re focused on cranking the handle of business as fast as possible.
Zara, a fashion retailer, is the poster child for this generation of business. The fashion industry is built around a value-chain that tries to push out regular product updates, beating up demand via runway shows and media coverage to support a seasonal marketing cycle. Zara takes a different approach, tracking customer preferences and trends as they happen in the stores and trying to deliver an appropriate design as rapidly as possible, allowing customer demand to pull fashion. By focusing on responding to customer demand, wherever it is, Zara has built an organization designed too minimize time from design to marketed product. For example, onshore, high-tech, agile production is preferred to low-tech but low cost, offshore production which involves long production delays. Zara takes two weeks to take a product to market, where the industry average is six months; the lifetime of Zara’s products is measured in weeks, rather than months; and the products offered in each store are tailored to the interests of the community it serves rather than a long term marketing plan.
The dirty secret of high velocity, lean businesses is that they are fragile: small disturbances can create massive knock-on effects. As we’ve ripped fat from the value chain, we’ve also weakened its ability to react to, and resolve, disruptions. A stockout can now flow all the way back along the supply chain to the literal coal face, stalling the entire business value-chain. Restoring an essential service is delayed while we scramble to procure the vital missing part. Mortgage approvals are deferred while we try reallocate the work load of a valuer dealing with a personal emergency. Or our carefully synchronized product launch falls apart for what seems like a trivial reason somewhere on the other side of the globe.
Our most powerful tools in creating todays high velocity businesses—tools like straight-through processing, LEAN and Six Sigma—worked by removing variation from business processes to increase throughput. The same tools prevent us from effectively responding to these disruptions.
Opportunities today are more frequent, but disruptive and fleeting. An open air festival in the country might represent an opportunity for a tolling operator to manage parking in an adjacent field, if the solution can be deployed as sufficient scale rapidly enough. Or the current trend for pop-up retail stores (if new products rapidly come and go, then why not stores) could be moved from an exceptional, special occasion marketing tool, into the mainstream as a means to optimize sales day-by-day. Responding to these opportunities implies reconfiguring our business on the fly—rapidly integrating business exceptions into the core of our business. This might range from reconfiguring our carefully designed global supply chain, through changing core mortgage approval criteria and processes to modifying category management strategies in (near) real time.
We’re entering a time when our ability to change direction, adapting to and leveraging changes in the commercial environment as they occur, will drive our success. If we can react faster than the competition then we can capitalize on a business opportunity and harvest any value the opportunity creates. Our focus will become acceleration: working too build businesses with the flexibility and spare energy required to turn and respond rapidly. These businesses will be the F1 cars of business, providing a massive step in performance over more conventional organizations. And, just like F1, they will also require a new level of performance from our knowledge workers. If acceleration is our focus, then our biggest challenge will be creating time and space required by our knowledge workers to identify these opportunities, turn the steering wheel and leverage them as they occur.
Update: A friend of mine just pointed out that the logical progression of mass → velocity → acceleration naturally leads to jerk, which is an informal unit of measurement for the third derivative.