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Complementary Innovation

Published date: September 10, 2008 в 9:19 pm

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Companies are enamored with chasing “white space opportunities.”  White space is the nickname for new, undiscovered growth segments.  It spins the notion that opportunity lies just ahead of us.  Telling colleagues you are working on white space opportunities suggests you are doing really important stuff.  It is the ultimate growth endeavor, the risk worth taking.  White space will save the day.

I’m not so sure.  I have two problems with white space.  It is neither white, nor a space.

White space has come to mean many things:

  • WhiteSpace (Resource Scheduling), name used since 2002 to denote available time for People or Resources when scheduling time
  • White space (visual arts), or negative space, the portions of a page left unmarked
  • Whitespace (computer science), characters used to represent white space in text
  • Whitespace (programming language), an esoteric programming language whose syntax consists only of spaces, tabs and newlines
  • White space (telecommunications), unused radio frequencies in the VHF and UHF bands allocated to television transmission.
  • White space (education), term used since 2007 in the Singapore Education System to denote time reserved for teachers’ personal reflection and planning.
  • White Spaces Coalition, a group of technology companies aiming to deliver broadband Internet access via unused analog television frequencies
  • White Space (business), the part of a market or segment that is available to a business or entity for new sales or customers
  • White Space (Process improvement and management), the area between the boxes in an organizational map, often an area where no one is responsible.

The common theme seems to be the notion of white space as a void, untapped and unused, free and clear – like powdered snow yet to be skied.  If only we could find it (or get the government to give it to us as Google is seeking)!

Where do companies look for white space?  Jim Todhunter at Innovating to Win has published a survey with some very important insights to this.  Most noteworthy is how low respondents rated Complementary Products, a mere 6.3% as a source for white space opportunities.  Jim’s advice:  “Reconsider how to look at the red ocean opportunity spaces to expand your market footprint through complementary offerings.  This could be a great less traveled path to revenue growth.”

I agree with Jim, but what is curious to me is why this path is less traveled in the first place.  My sense is that companies overlook these complementary innovations because they are too focused on new opportunity defined as a market space rather than a boundary or frontier.  White space is not a space at all.  It is the fringe of what your are currently doing.  The term – adjacency – seems to be a much better way to define it.  White space is not white either.  Complementary innovations are deeply colored by what we know and have experienced.  There is always an old idea buried in a new one.  This is why tools such as S.I.T. and Goldfire are so effective at innovating at the fringe of the current business model – they leverage what is known.

Fortune 100 companies will find more growth opportunities at the margin of what they are doing than by chasing far-flung, ethereal market voids.  Leveraging at the margin takes advantage of existing core competencies and strategic assets.  It yields innovations that stretch the portfolio and the brand.

Stop chasing white space and look for the brightly colored complementary innovations right next to you.

The LAB: Multiplication (August 2008)

Published date: August 31, 2008 в 10:05 am

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The Multiplication tool is one of the five powerful thinking tools taught to me by the folks at Systematic Inventive Thinking. I like this tool because it is simple and yields great results.  Even children can learn it.

Multiplication works by taking a component of the product, service, strategy, etc, and then making one or several copies of it.  But the copy must be changed in some way from the original component.  The original component is still intact, unchanged.  Now using Function Follows Form, we work backwards to take this hypothetical solution and find a problem that it solves.

One of our blog readers, Jim Doherty of the Grabbit Tool Company, agreed to let me use their main product, the EZ Grabbit Tarp Holder, for this month’s LAB.  I bought a set at Ace Hardware last night, and used the Multiplication tool just now to create some new product ideas.  Here is a demonstration of the EZ Grabbit:


We start Multiplication by making a list of the components:

  1. Sleeve
  2. Dogbone
  3. Chord
  4. Grip
  5. Lock

Make a copy or several copies of each component, one at a time, and change something about it.  What would be the benefit or potential use of the product with this new, changed component?  Here are some ideas:

  1. Two sleeves, but the second sleeve is attached, back-to-back, to the original sleeve.  This would allow a second tarp to be attached to another one (with its own dogbone).  There could be three or perhaps even four sleeves, arranged in quadrant style (with the openings facing out), so multiple tarps could be attached.  The copied sleeve could be longer than the original, allowing different tarp configurations.
  2. Multiple dogbones, but each is optimized for different types of material (tarp, plastic, terry cloth, cotton, denim, etc) to prevent damage, improve grip, etc.
  3. Multiple chords, each coming out of the same dogbone with its own hole, to allow different attachment points.
  4. Two grips, the second one attaches to the first one to allow it to be hung from a hook.
  5. Two locking mechanisms, the second one used to attach to the fabric temporarily so it does not get lost or slide around during placement.

Once we have raw ideas like these, it’s a good idea to get early customer feedback and perhaps build some working prototypes to let customers envision using the new product.  The ideas above are incremental innovations to the product’s original category, so it can be valuable to get customer feedback about potential uses of the new embodiments outside the category to find breakthrough ideas as well.

Innovation Allocation

Published date: August 19, 2008 в 10:09 am

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Who leads innovation in your company: marketing or R&D?  It’s a trick question, of course.  But it’s a useful question for Fortune 100 companies to consider.  Has your company made a conscious choice of how it “allocates” this leadership role?
Allocating innovation to one group over the other will yield a different business result.  The approaches to innovation by marketing are dramatically different than approaches to innovation by R&D, so the outputs will be dramatically different.  The question becomes: which group will outperform the other?   Technical-driven innovation or marketing-driven innovation?
But there is another layer of complexity.  Allocating innovation resources to one group over the other will also yield a different kind of innovation.  Market-driven innovation speaks to what is salable.  Technology-driven innovation speaks to what is technically possible.  Which group delivers the type of innovation that is best suited to the company’s growth strategy?  Now the decision of who leads innovation becomes even stickier.
This question is a bit like deciding how to allocate your money in an investment portfolio. Which allocation of funds will give you the total return and the type of return (tax advantaged, etc) that you need?  The tempting answer here is to assert innovation leadership should be shared between the two.  Diversify your innovation allocation just as you would diversify your personal investment allocation.  I’m not so sure.  Here’s why.
For a company that knows exactly what its customers need, then it’s just a matter of developing it. A technically-led innovation approach makes the most sense. L’Oreal, for example, does virtually no market research with its customers.  It gathers no “Voice of the Customer.”  Yet it knows exactly what customers need because…..L’Oreal tells them!  In that case, innovation is led by the technical team to deliver the beauty compounds and formulas that will thrill their customers. The innovation approach here is described as “Problem-to-Solution.  Engineers lead this because they excel at solution matching.
A company in the refrigerator space such as GE or Whirlpool needs a different approach.  Breakthrough innovation is more likely to be found in the “Solution-to-Problem” mode, best driven by the commercial marketers who excel at problem matching. The marketer needs to use an approach that relieves them of their preconceived notions about what customers want. They seek to avoid “fixedness” around their current product so they can solution spot more freely.  Only then will they be able to envision new concepts of home refrigeration that never would have emerged with a technical approach.
The best companies maximize their innovation investment return by consciously allocating leadership to either marketing or to R&D.  In the end, innovation is best driven with a team approach but with clear role accountability and direction depending on market conditions and corporate strategy.

Ideation vs. Prioritization

Published date: August 2, 2008 в 7:30 pm

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Ideation or prioritization?  Imagine you had a choice of being really good at one, but not the other.  You could be a master at creating ideas, or you could excel at selecting winning ideas, but not both.  Which would you choose? 
Two things intrigue me about this trade-off.  First, companies spend too much time and energy prioritizing ideas and not enough on creating ideas.  Second, the innovation space seems to demand a completely different set of tools and techniques for selecting ideas than the tools and techniques used for making other business decisions.  In reality, there is no difference.  The tools used to make everyday business decisions should be the same ones used to prioritize ideas. 

I face this issue a lot when speaking about innovation.  “How do you select the best idea to pursue?  How do you know which idea is going to be the next blockbuster?  What is the secret to spotting great ideas?”   I just spoke to an outstanding group of MBA candidates at the Columbia Business School.   One of the students wanted to know my views on this.  It is as though I have a special eye or an innovation Magic Eightball for picking winners.  If you can unlock my formula, you will find the path to riches.  Not even close.

 

In my view, prioritization of ideas is not an innovation issue, and it does not belong in the discussion at all.  The problem of which idea to pursue from among a list of choices is a subject well covered by the behavioral decision sciences.  An amazing body of research exists in this field.  Researchers have described highly effective methods of choice that circumvent the inherent weaknesses of humans in making decisions.  The choices we make in the innovation space are no different.  The choice of which innovation to pursue should be approached the same way one decides on what clothes to wear or what person to marry:  1. consider the criteria that are important, 2. weight those criteria, 3. score each candidate on those criteria, 4. add up the results, and 5. let the chips fall where they are. The highest rated idea is the one you should pursue.  It’s that simple.

 

But innovation choices get special privileges over other choices.  We seem to require methods of choice that deserve royal treatment over other methods of choice.  A cottage industry within a cottage  industry has evolved to create a sense of uniqueness when in fact no uniqueness exists.  A wide variety of special tools have emerged to select and manage ideas.  The good news about many of these tools is that they have the right science built into them.  Here is a sample (from Innovation Tools – thanks, Chuck!)

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Accolade Idea Management
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Ameli
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BrainBank
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BrightIdea.com
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Cognistreamer Innovation Manager
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EGIP Idea-Modul
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Engage ThoughtWare
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Idea Management System
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Idea Reservoir
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IdeaBox
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IdeaCenter (Akiva)
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IdeasTracker
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IdeaValue
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Imaginatik
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Ingenuity Bank
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Insight Results
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Jenni Enterprise Idea Management
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OVO Innovation
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Prism Idea Management
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Target Idea Management for mySAP

Executives obsess over  finding the right method to select ideas when they should be more focused on how to generate ideas.  The zeal over prioritization puts a drag on the core issues surrounding innovation such as how to innovate and how to make it routine and part of the culture.   Why do executives sweat more over selecting ideas than generating?  My sense is they feel more accountable when choosing an idea than when generating the idea.  Generating an idea doesn’t carry with it any risk or obligation to spend.  Choosing an idea does both.  If companies want executives to put more priority on generating ideas, they will need to change this.

It is time to strip out this issue entirely from the innovation discussion.  Don’t mix the two.  Put the emphasis on a method to generate many great ideas and not on the method to choose the right one. For that, use the well-established science.  Just as Fortune 100 companies use the well established methods to innovate, we should use well established methods to prioritize innovations.

The LAB: Task Unification on a Guitar (July 2008)

Published date: July 26, 2008 в 11:52 am

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The suggestion from one of our readers (thanks, Erez!) is to use Task Unification on a guitar.  His  comment suggests that players have trouble keeping their guitars in tune when playing in a band.  They need to reduce the time it takes to re-tune between songs.  I liked this assignment because I play guitar, and I have a small collection of electric guitars, an acoustic guitar, and a banjo.  This will be the first time I have applied a systematic innovation process to invent new guitar concepts.  Let’s see what happens.
At least two guitar makers have addressed this with electric guitars.  Gibson has their Robot Guitar that automatically tunes itself to one of several tunings including “standard” (EADGBE) tuning.  Pull a knob, dial the tuning you want, and…presto…the guitar tunes itself.  Transperformance has their version, The Performer, which does the same but includes a clever LED on top of the guitar so you can actually track what is happening to each string.  Both have onboard computers and some sophisticated string management systems (pulleys and servos) to do this.   Here is the Robot Guitar in action:

While I consider this innovative, I see these as the traditional model of innovation:  IDENTIFY PROBLEM – FIND SOLUTION.  These guitars are cool, but they are heavily engineered and technology driven (I don’t plan to own one).  The elegance of the systematic approach is that it works in reverse: IDENTIFY SOLUTION – FIND PROBLEM THAT IS SOLVES.  This approach, in my experience, leads to simpler and thus more innovative ideas.  What would be amazing is to find solutions on the acoustic guitar without all the electronics and mechanisms inherent in electric guitars.  That is what I focused on for The LAB this month.
Task Unification is the template that assigns an additional job to an existing resource or component (either internal or external).  We start by listing the components of the product.  Here is the list I made this morning:

  1. pickguard
  2. sound hole
  3. fretboard
  4. frets
  5. bridge
  6. bridge pins
  7. dots
  8. nut
  9. strings
  10. tuners
  11. tuning pegs
  12. truss rod
  13. finish
  14. bracing

There are two tasks I want to assign, one-by-one, to each of these components:  knowing when a string is out of tune, and helping put the string back in tune…quickly.  So we phrase it this way:  “The pickguard has the additional job of knowing when the strings are out of tune.”  Then I try to imagine what the pickguard has to do to make that happen.  A more general way to innovate is to give the pickguard an additional job from a list of tasks, one-by-one, then imagining what problems that solves or what benefits that produces (using Function Follows Form).  This approach will yield a wide range of potential innovations beyond just tuning the guitar.
I came up with these ideas:
SJ-ph-LG For knowing when the guitar is out of tune:  the tuning pegs indicate when they have slipped (rotated due to the force of plucking the strings) or when the string has slipped.  It does this with some sort of pop-up indicator, perhaps gradually to the degree of slippage.  A quick scan of the tops of the tuning pegs could tell the player the status of each string independently and which ones are in most need of re-tuning.
SJ-bridge-LG For re-tuning the guitar quickly:  the bridge pins can be pushed in, perhaps in gradual notches, to place slightly more tension on a string to bring it in tune.  For playing in a band, this would be good enough until the player could use the tuners to do their regular job.  Another advantage is the bridge pins are nearest the right (strumming) hand so its convenient and unobtrusive to quickly push a bridge pin while playing.
Thank you for joining The LAB this month.  Your ideas and comments are welcomed.

The LAB: Demonstration of Task Unification (July 2008)

Published date: July 23, 2008 в 8:57 pm

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 Lab_2

Welcome to The LAB.  This month, we will focus on Task Unification.  This tool is one of five templates in the S.I.T. method of innovation.  The tool works by taking a component of a product or service and assigning it an additional task or job.

What I need from one of our readers is:  a suggested product or service.  I will use this suggestion to apply Task Unification to innovate new embodiments.  Please post your suggestion in Comments below.  Innovation results will be posted shortly!

The LAB: Innovation in Real Time

Published date: July 23, 2008 в 8:47 pm

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The readership of this blog has steadily grown, and it’s time to start demonstrating how innovation works…in real time.  Once each month, I will post The LAB.   This is where we will use a specified innovation tool on a product or service that is suggested by one of you, the readers of this blog.

Once I have received a suggested product or service (posted in Comments) from one of you, I will use a specified innovation tool to create a new-to-the-world innovation.  I will show results in a subsequent post with a description of how I applied the tool and used each step of the process to create the innovation.  In some LABs, I may be able to include a drawing or rendering of the innovation.  We’ll start this month.

For those people interested in the innovation space, my firm belief is that we need to make a regular habit of innovating so we can perfect the craft and set the pace for others.  It is not enough to talk about and read about innovation.  It is essential that we all do it.

Innovation Stigma

Published date: July 13, 2008 в 4:02 pm

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There is an inherent bias against innovation despite the enormous value it holds for organizations.  Corporate executives know that innovation is the only true long term growth engine for their firm.  Yet innovation carries with it a certain stigma, a perception in the minds of executives, that it is “soft” and frivolous compared to other hard core business activities like productivity, quality, and demand generation.  This stigma deters executives from taking risk and investing in serious innovation initiatives.

The innovation industry itself is partly to blame.  Participants in the innovation space tend to perpetuate a mystique about innovation and creativity as though it is a deeply hidden secret that needs to be unleashed.  Walk into many innovation sessions and what you see are cans of Silly StringTM, Slinky(R) toys, Frisbees, and funny nose glasses.  The notion here is that people need to be more playful to have that “eureka” moment and invent the next blockbuster idea.  People are conditioned to believe innovation requires “skunk-works” in a specially-designed room to pursue “white space opportunities.”   Innovation is voodoo.

In an effort to differentiate themselves, participants in the innovation space create novel names for their programs and services.  Here is a very small sample: Innovations-Radar(R), Innovation Cube(R), Challenge AcceleratorTM, 360-IA(R), SpinnovatorTM, Idea BucketTM, AlphaStormingTM, Excursion DeckTM, Mindscan(R), IdeaSpring(R), Super Digilab(R), etc, etc.  The list is overwhelming and it tends to confuse the market.  More importantly, what is the efficacy of these tools?  Do they work?  The granddaddy of them all, Brainstorming, is certainly suspect given the many studies that suggest otherwise.

Is there an innovation bias?  I am polling Fortune 100 executives to describe the characteristics of people who champion certain business causes.  I ask them to describe the typical age, experience, credentials, aspirations, and personality of:

  • Productivity Champions
  • Process Excellence Champions
  • Innovation Champions
  • Leadership Champions
  • Brand Champions

The early feedback suggests innovation champions, compared to the others, are seen as more eager, altruistic “dreamers” who are out of touch with the business.  One executive described innovation champions as necessary but had low expectations of actual results.  Of more concern is the perception executives have about themselves in this role.  My sense is business people shy away from championing innovation because they believe the stigma of failing at innovation is more career-damaging than failing at other ventures.

The innovation industry needs to play a role in improving the image of innovation.  Fortunately, there are resources like Innovation Tools and CREAX that consolidate the innovation space and help companies make sense of the different offerings.  More prominence needs to be given to the classic researchers in innovation and creativity like Ronald Finke, Thomas Ward, Mihaly Csikszentmihalyi, and Jacob Goldenberg.  We need to get back to the basics of what makes innovation work so we can skip the hype.

The innovation bias has to be overcome if companies want to make progress and grow.  Leaders need to address this head on.  How?  Just as they learned to champion leadership by first becoming an authentic leader, they need to champion innovation by first becoming an authentic innovator.

Innovation Telltale

Published date: June 28, 2008 в 2:10 pm

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If you want innovation in your company, hire innovative people. But how do you know if someone is innovative?  What do you look for?  What telltale evidence might suggest that a person has superior innovation skills?

Several years ago, I ran a youth hockey league for ages 6 to 18.  A laborious part of this volunteer job was managing the selection of players for the elite travel teams.  Fifty or so boys would compete for twenty slots on one of 20 teams.  A group of coaches rated players on skating speed, puck handling, passing, and shooting.  As league commissioner, I attended each evaluation…that’s right…all them.  That’s 100 hours of evaluations plus many more hours tabulating the data, selecting players, and communicating with parents.

One year, I noticed something unusual in the data.  A bit of regression analysis of the evaluations told a remarkable story: every player selected on every team also happened to be the fastest skaters in their tryout pool.  In other words, we could have selected players with one simple variable, skating speed, instead of the tedious coaches’ ratings of multiple skills over multiple sessions.

I was shocked.  We could have done a simple race from one end of the rink to the other, about 10 seconds in duration, for the entire group of candidates at each age group.  The first twenty to cross the finish line make the team.  Skating speed was essentially a predictor of all other hockey skills.  It was a telltale of hockey success.  Fifteen minutes of time trials could predict with perfect success the best players for twenty teams instead of 100 plus hours of evaluations.  It could have been that simple.

What is the telltale of innovation?  I think I know the answer.  But, just as with the youth hockey experience, I will need to collect data to be sure.  My hypothesis is mental searching speed, an idea that Yoni Stern at S.I.T. taught me.  This is a measure of how well you “Google” your own mind and memory for information or experiences when given a task.  The task in the case of innovation is to take a Virtual Product (a mental abstract produced through the S.I.T. method), and mentally search your mind to find many productive, innovative uses for it.  Whoever can find the most ideas for a given task is more innovative in my view.  They “make the team.”

My task now is to select a different team – a team of research collaborators to find and validate the Innovation Telltale, something the Fortune 100 will surely value.

M&A Innovation

Published date: June 20, 2008 в 6:14 pm

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Relying on mergers and acquisitions for growth sends a signal that you don’t know how to innovate or how to manage it.  M&A has other problems, too.  Companies tend to overpay which actually destroys shareholder value.  At best, firms end up paying full value, neither better or worse off financially.  The firm grows in size, not value, and pays in the form of distraction.
What if you could use the tools and processes of innovation in mergers and acquisitions?  How could it help?  Would you select acquisition targets better?  Could it help understand the valuation better so you get a better deal?  Might it help you implement better?  I believe innovation techniques could be applied to all three. Here is one example: targeting – deciding who to buy.
Imagine you are the CEO of a bank, perhaps headquartered in Europe.  You and the other board members have decided its time to deliver more value to the shareholders by growing the business. You decide to
acquire another bank with all the spare cash you have accumulated (rather than just give it to its rightful owners.) The question is: which bank?  Should we buy one in Europe to expand our share while eliminating a competitor?   Should we expand to the U.S. market and buy one there?  Should we buy a struggling bank, get it cheap, and restore it to profitability?
No, no, no. Too simple and obvious.  Nothing innovative here at all.  Let’s instead apply the Subtraction Tool from Systematic Inventive Thinking and see how we can re-frame the question.  Start by listing the components of your bank.

  1. Employees
  2. Customers
  3. Assets
  4. Property plant and equipment
  5. Brand
  6. Systems
  7. Management

Now, one at a time, let’s remove a component, then ask ourselves which bank we should acquire.  Imagine you had no customers. You still have all the other components, just no customers.  What bank could you
acquire that had the ideal customer base for YOUR bank given what it’s all about?  Would you want customers who were more diverse, higher income, more profitable, lower cost to serve, more loyal, etc?  In other words, acquire a bank that delivers the perfect complement of customers.  Now remove employees.  You have all the other components, just no staff.  Now what bank would you buy?  Which has the ideal employee base for who you are?  Would you go after employees who are smarter, less costly, more diverse, younger, older, etc?
The same process, done for each component in succession, gives you a whole new innovative perspective on who to acquire.  It helps you understand why you are buying, what you are getting, and how you
expect to create new value and competitiveness.  It helps you understand The Bet – what the deal is really all about.
M&A is an expensive way to grow.  By adding the gift of innovation to the process, shareholders stand a better chance of seeing more value.

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