Did Innovation Kill Wow!

Mont Saint Michel

When was the last time you said “wow?”  Had to think about it didn’t you.

I often ask this question to audiences – and a strange thing is happening.  Fewer and fewer people have a good answer.  In fact, there is a demarcation by age.  Experienced people enjoy the question and have fun with it; the younger crowd looks around quizzically or takes a brief time out to peak at their phone.

What’s going on here?  Well I’m not sure but I have an idea.  I think we have become so inundated with amazing innovations that we have lost the ability to be wowed.  Let me explain.

Not too long ago I was in the Customer Loyalty business.  As consultants our aiming point was to get customers to say: “wow!”  We believed this correlated to loyalty.  Not anymore.  Wow is simply the expected norm in our culture of constant stimulation and immediate gratification.

I think this has been caused by our quest for Innovation facilitated by the Internet.  We are all working from the same database of winners as selected by the Internet.  The Internet has narrowed our base for Innovation, not widened it.  In addition, the Internet alerts us of Ideas and Innovations in the pipeline.  Who is surprised that Google is working on driverless cars?

Is this a tragedy?  Should we stop Innovating?  Of course not!  I still like the wow I get from my new car because I never have to take the key out of my pocket.  But a car key in your pocket will never wow my grand daughter.  She doesn’t even relate to phones; here preferred style is video chat.

I think that’s the sadness of our hyper-innovation society.  We’re losing our ability to be excited.  But wait, maybe there’s an answer.  Maybe we need to start spending time with the younger people in the audience to show them how to access ideas at the source rather than through RSS feeds.  Maybe it’s time to spend time in nature and museums to see what is truly remarkable.  And maybe it’s time to stand in awe of some of the great achievement of humans – I just visited Le Mont Saint Michel where no one was looking at their smartphone.

Maybe there is an answer in “retro.”  Maybe returning to diversity in experience and thought will bring us some new ideas.  Ones that will make us go WOW!

The Timeliness of Organization Renewal

Renewal Isn't a Fad

I’m a big believer that organizations must constantly renew themselves if they are to remain healthy and relevant.  I never shy away from the “fad of the month” allegation.  People may complain but it is these perceived fads, when used properly as levers, that keep energy, inspiration, and thinking in organizations. 

Organizations need ideas from everyone, everywhere if they are to remain sharp.  The toolbox to do this has become an expansive cornucopia.  But what are the origins and limits to this cornucopia?  Has it become a Hydra?

I got thinking about this a few weeks ago when a good friend of mine retired.  He’d been a senior finance executive and through his career he went to many “executive development” programs.  He was kind enough to sort through his papers and give me a file of some of the premier courses he’d attended.  Wow!  What an eye opener.

The documents in the file went back to the late 1970’s.  The contents spanned all the usual suspects: change, employee involvement, customer focus, and systems thinking.  My favorite is the HBR article of 1985 titled: Managing Innovation: controlled chaos. 

In reviewing the file I was shocked at how the basic concepts haven’t changed.  You could present the content of these courses to executives today if you genuflect to Apple rather than Kodak and Christensen rather than McGregor.

I was intrigued so I dug deeper into my own files.  Among other things I found a 1970’s Manual for Planning, Programming, and Budgeting .  This was a field guide for one of my first jobs.  It sprung from Robert McNamara’s time at the US-DOT.   As I reviewed the manual I realized that it contained most of what I know about planning and financial systems in large complex organization.

So, what’s my point in our new world where we’ve transitioned from paper to digital files; and where face to face sharing has given way to Webinars, Facebook, LinkedIn, and Tweeted hash tags?  Well, I’m concerned that we learn less because we have more.  Let me explain.

We have access to an incredible richness of thinking and practice in management science; however, we tend to select and refine our knowledge within functional silos.  As we drift further from the seminal source of an insight we get multiple interpretations of it cloaked in a myriad of case studies to support a single purpose.  There comes a point of unintelligible background noise that numbs the senses. 

For example, the concept of “jobs to be done” is attributed to Clay Christiansen, as a way to deeply understand the unarticulated needs of customers.  Recently the Human Resource community has taken this engaging concept and interpreted it into improved job descriptions.  Not to be outdone, Simplification professionals now use it to explain organizational roles.  We now have one concept living in three silos that can’t talk with one another.

It seems to me that “confusing the client” can’t be the purpose of all of this rich information and thinking.  We can do better.  Here’s a modest proposal: maybe organizations should have a designated center of “renewal” to regularize the organization’s point of view on the discipline of management science.  What are the organization’s consistent set of principles, definitions, practices, and methods that make sense out of the “fad of the month?”

I have consulted in several organizations that do this.  For example, I lead a Customer Loyalty project at Whirlpool when it was also engaged in a global initiative to build Innovation capability.  My team was “required” to learn and use Whirlpool’s accredited innovation toolbox for ideation, opportunity elaboration, and rapid experimentation as we worked with client teams to improve Whirlpool’s customer experience.

I know the flaw in this proposal: how do you control information flow in a world of free flowing information?  Well maybe technology doesn’t have to be a bane to management science; maybe it can solve this challenge.  I’d certainly prefer effort in this direction as opposed to what I see today where the “fad of the month” is stalled and resisted under the slogan: “if we stand still long enough we’ll be in the lead.”

Technology & It’s Disempowering Power

I don’t regard myself as a troglodyte, but more often than not I am now the oldest person in the room.  That means I see value through the eye of experience before the lens of progress.

I’m getting disturbed by technology, not as a 19^th century Luddite destroying the advance of machines, but as a humanitarian who wonders about the impact of technology on people in organizations and their ability to serve their clients and society.  Technology is becoming a barrier to humans working for humans.

It is clear to me, and everyone else who has been conscious for the last ½ century, that technology has advanced the human condition.  But trees don’t grow to the sky; have we hit the point of diminishing returns.  Let me explain.

I travel way too much, so many of my metaphors come from the traveler’s world.  A week ago I phoned my friends at the American Airlines Executive Platinum desk.  They’re the best.  They’re the most experienced agents trained to serve the airlines most experienced travelers.

Here’s what happened.  My wife and I were travelling to Canada from the US on the AA reward program.  We had the opportunity to move our travel up one day.  There is no change fee for me on this transaction so I called the Platinum desk.  Everything was ok, except because I was traveling to Canada and the exchange rate on the dollar had changed it was costing me 20 cents extra per ticket to cover landing fees.  Yep, 40 cents for both tickets – and the agent could not over-ride the system – she had to get approval from the rate desk.  This was a total disempowerment of her ability to act in the interest of her client and her company.

I see this all the time in organizations when I’m working on the inside as a consultant or on the outside as a customer.  Technology has taken away the flexibility for employees to act on good judgment.  The organizations need for consistency, efficiency, and low risk has emasculated the human’s need for empowerment, effectiveness, and respect.  What does that tell you about our basic belief about the value of people at work?

At what point does this emasculation lead to gutted enthusiasm?  Is disempowerment by technology a reason for such low employee engagement in today’s organizations?  When do people simply become automatons struggling to serve high order bits and bytes?

This wouldn’t concern me if humans were only mechanical, but they’re not.  The essence of humanity is emotion.  Human gratification comes from giving.  Employees get gratification by giving to customers – and we’re taking this away from them as their emotions are eroded by electrons.

Innovation is heralded today as the panacea for success.  Really?  In a world where many people are asked not to think how can Innovation flower?  Where will employees find fresh thinking at work when they’re asked to hang up their coat and minds at the door?

Ron Johnson – Questions about Innovation & Change

Did the Apple fall too far from the tree?

I live in Dallas.  My personal case study for the past two years has been Ron Johnson as the CEO of JC Penny.  The business section of the local paper tells me that my study is over.  Johnson has been fired.  His style, innovations, and vision of change managed to drive the stock from $35 to $15.  Oooops!

Most people know Ron Johnson as the genius behind the Apple Genius Bar.  He’s the guy that changed the face of retail.  He gave us wide-open spaces, a place for kids to play, and chest high tables to play with our tablets.  I’ve been to his flagship stores in New York City and London, not as a customer but as a tourist. 

Ron Johnson has gravitas.  So when he took over JC Penny in June 2011 I bought a front row seat.  I’m a change and innovation practitioner.  I wanted to learn at the foot of the master.  Closing out 2011 everything looked good.  Johnson announced: 

• his vision to make JC Penny “America’s favorite store;” 
• new people he wanted on the bus; 
• “fair and square” pricing supported by a new logo dominated by a “square” – no more confusing coupons and complex pricing, just everyday low prices and value; and 
• shift from a promotional department store to boutique stores within the store.

It didn't work.  What was left of JC Penny’s loyal customer base abandoned the store in droves.

I don’t know Ron Johnson.  I’m not his apologist.  But what did he do wrong?  Why did he fail?  Didn’t Johnson do all the things that change managers and innovators implore of their clients? 

• Set a vision, commit to it, and get in front of it 
• Change out the old executives with their defense of legacy
• Challenge orthodoxies like coupons, discount pricing, and spiff’s 
• Know the unarticulated needs of customers – like Apple has done so well

All of this advice resulted in failure, but I can only find two rationalizations for why it didn’t work: 

1. Change is a journey – even in an exponentially changing world.  The impatience of the Board for shareholder returns trumped this needed transformation
2. Test and learn – the innovators mantra.  Johnson seems to have pushed ahead with the arrogant leaders mantra of “got-a-hunch, bet-a-bunch”

But is this the full explanation?  Maybe there is a part of the real world that says that organizations, like natural species, have a shelf life.  Maybe the world just moves past the installed base of business.  Maybe death is natural, and should be accepted.

When we study success we ascribe it to the actions we want to observe.  When we study failure we do so to make the point that the leader didn’t follow the certified game plan.  That’s not the Ron Johnson case, from what I understand.   

Can we, as change agents and innovators, learn from JC Penny, or are we afraid to?

Innovation – Is “Fail Fast” Realistic

The Success of Failure

It's natural for humans to have ideas.  At question is what we do with ideas when there is some assembly required.  Ideas do not come with an owner’s manual and, unfortunately, we are not omniscient.  

What we do know about complex ideas is that we won’t build them right the first time.  We will fail in our initial efforts to turn an idea into a useful innovation.  The question is how much time and resources we use learning how to get our ideas off the drawing board.  There are several ways to answer this question, like:

Got a hunch, bet a bunch

• This is where we rough up the idea; amass capital behind it; put it in the market and see what happens.  Basically we let customers clarify the idea and provide the quality control.  The hope is that customers will provide ever decreasing concentric learning cycles to produce the final innovation. 

Build it and they will come

• This where the builders painstakingly design, link, and integrate the innovation into a comprehensive whole before releasing it into the market.  Here the hope is that one big learning cycle from customers produces the definitive “v-2.”   

Fail fast, fail cheap

• This is where the designers construct a model; break it into components; then use experiments to test underlying assumptions.  Here the hope is to learn quickly on iterative, low-cost learning cycles so the final innovation can be released in near perfect form.

Current wisdom seems to be favoring the third option as the best way to learn about our ideas.  The literature is full of examples and uses icons as great as the Wright brothers and even Thomas Edison who proclaimed that he hadn’t failed, but rather just learned a 100 ways that didn’t work.

I love Dan Ariely’s example of learning at low cost when he advised a woman to spend a few hours sitting on her washing machine while reading a book.  The bump and thud of the washing machine would imitate an airplane ride to help her decide whether to fly to a meeting late the night before or early the morning of the meeting.

The “fail fast” motto is indisputable, except in reality.  I wonder if we’re doing a disservice to Innovation by highlighting it.  Let me explain.

Gall Trumps Small

Small runs against the rhythm of most business.  Managers like big; planning and budgeting systems like big; idea experts are rewarded to act big!  Companies are looking for the next big idea; not the next small increment.

Trust is a Must

We work in a success culture, not a failure culture.  Failure for the purpose of learning requires trust; yet a recent survey by Towers Watson shows that 6 of 10 employees don’t trust their boss.  Who has the courage to admit failure, even predicted failure, when that stigma might be remembered long after the success is forgotten?

I’m not saying that we shouldn’t evangelize and support “fail fast, fail cheap.”  What I am saying is that we should do it with caution lest we leave the careers of our closest allies dangling over a Bunsen burner.

Organizations are structured to place big bets.  Big failures maybe costly but they can be rationalized as bold strategic strikes.  I always suspected a smile on the lips of Sisyphus on the way back down the mountain.

Innovation – Is It Just Another “Shiny Thing?”

There'll be Another Soon

Innovation has a head of steam.  It’s in all the business publications and on every CEO’s lips.  It’s today’s silver bullet.  It’s the key to growth, sustainability, and employee engagement.  But is Innovation here to stay or is it just another “shinny thing?”

I can make the case on either side of the question; however, recently I’ve had my faith restored in Innovation becoming deeply embedded in the science and practice of management.  My encouragement comes from the Management Innovation Exchange web site where it lists finalists in this year’s Innovation contest.  Two of the entries come from clients and friends.

Whirlpool Corporation

The first comes from Moises Norena the Global Director of Innovation at Whirlpool Corporations.  He writes about: Whirlpool’s Innovation Journey: An On-Going Quest for a Rock-Solid and Inescapable Innovation Capability.  The full story is at: Whirlpool's Innovation Journey.

For me the significant part of Moises’ story is that it starts in 1999.  As he says, the Innovation journey can be long but it has big rewards.  I was involved in the early chapters when Gary Hamel started Whirlpool down the Innovation path.  He and his team at Strategos used their tools to begin building the Innovation capability within the corporation.

My role in the early 2000’s was to lead the team that focused on Customer Loyalty.  We used our global customer research as the primary input into understanding Customer Insights and Discontinuities in the appliance market.  We then used the Innovation tools to frame and implement innovations that would capture the articulated and unarticulated needs of Whirlpool’s customers.

From these green-shoots Moises weaves an interesting tale of the constant adjustment Whirlpool makes to the expectations and theories about embedding Innovation.  I’m not sure if Moises agrees, but my major take away from his work is that: Innovation can’t be embedded; it can only be a capability that evolves to meet the business needs of the day.

Korea Telecom

The second article is from Misook Lim the Director of the Innovation Management Center at Korea Telecom.  Her story is about Transforming Culture Through Pervasive Innovation.  It can be found at: Korea Telecom - Innovation Changes Culture.

I worked with Misook and her team for about 26 months.  Again the connection was through Gary Hamel and this allowed us to draw on the Whirlpool experience through the generous support of people like Moises and his boss Nancy Tennant who has been named by Business Week as one of the world’s 25 Innovation Champions.

Misook does a wonderful job of relating the multiple fronts that had to be pursued to have Innovation recognized as a needed tool to position Korea Telecom for the aggressive changes taking place in its market.  She walks us through a series of initiative such as: building capability in a core team; leading Innovation challenges within business units; setting the governance structure; and developing the companies executive team and vice presidents.

For me the Korea Telecom experience re-proved something we all know: culture is a major issue when implementing change.  I learned that you have to understand culture and respect it as a starting point for change.  The culture at Korea Telecom was hierarchical and deferential; sometimes our western beliefs about equality and participation had to wait.

Often in the Innovation consulting business we’re asked for proof, best practices, and where this has been done before.  Moises and Misook answer the question.