by Robyn Bolton | May 3, 2024 | Innovation, Leadership, Stories & Examples
You know the stories. Kodak developed a digital camera in the 1970s, but its images weren’t as good as film images, so it ended the project. Decades later, that decision ended Kodak. Blockbuster was given the chance to buy Netflix but declined due to its paltry library of titles (and the absence of late fees). A few years later, that decision led to Blockbuster’s decline and demise. Now, in the age of AI, disruption may be about to claim another victim – Google.
A very brief history of Google’s AI efforts
In 2017, Google Research invented Transformer, a neural network architecture that could be trained to read sentences and paragraphs, pay attention to how the words relate to each other, and predict the words that would come next.
In 2020, Google developed LaMDA, or Language Model for Dialogue Applications, using Transformer-based models trained on dialogue and able to chat.
Three years later, Google began developing its own conversational AI using its LaMDA system. The only wrinkle is that OpenAI launched ChatGPT in November 2022.
Now to The Financial Times for the current state of things
“In early 2023, months after the launch of OpenAI’s groundbreaking ChatGPT, Google was gearing up to launch its competitor to the model that underpinned the chatbot.
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The search company had been testing generative AI software internally for several months by then. But as the company rallied its resources, multiple competing models emerged from different divisions within Google, vying for internal attention.”
That last sentence is worrying. Competition in the early days of innovation can be great because it pushes people to think differently, ask tough questions, and take risks. But, eventually, one solution should emerge as superior to the others so you can focus your scarce resources on refining, launching, and scaling it. Multiple models “vying for internal attention” so close to launch indicate that something isn’t right and about to go very wrong.
“None was considered good enough to launch as the singular competitor to OpenAI’s model, known as ChatGPT-4. The company was forced to postpone its plans while it tried to sort through the scramble of research projects. Meanwhile, it pushed out a chatbot, Bard, that was widely viewed to be far less sophisticated than ChatGPT.”
Nothing signals the threat of disruption more than “good enough.” If Google, like most incumbent companies, defined “good enough” as “better than the best thing out there,” then it’s no surprise that they wouldn’t want to launch anything.
What’s weird is that instead of launching one of the “not good enough” models, they launched Bard, an obviously inferior product. Either the other models were terrible (or non-functional), or different people were making different decisions to achieve different definitions of success. Neither is a good sign.
“When Google’s finished product, Gemini, was finally ready nearly a year later, it came with flaws in image generation that CEO Sundar Pichai called ‘completely unacceptable’ – a let-down for what was meant to be a demonstration of Google’s lead in a key new technology.”
“A let-down” is an understatement. You don’t have to be first. You don’t have to be the best. But you also shouldn’t embarrass yourself. And you definitely shouldn’t launch things that are “completely unacceptable.”
What happens next?
Disruption takes a long time and doesn’t always mean death. Blackberry still exists, and integrated steel mills, one of Clayton Christensen’s original examples of disruption, still operate.
AI, LLMs, and LaMDAs are still in their infancy, so it’s too early to declare a winner. Market creation and consumer behavior change take time, and Google certainly has the knowledge and resources to stage a comeback.
Except that that knowledge may be their undoing. Companies aren’t disrupted because their executives are idiots. They’re disrupted because their executives focus on extending existing technologies and business models to better serve their best customers with higher-profit offerings. In fact, Professor Christensen often warned that one of the first signs of disruption was a year of record profits.
In 2021, Google posted a profit of $76.033 billion. An 88.81% increase from the previous year.
2022 and 2023 profits have both been lower.
by Robyn Bolton | Apr 21, 2024 | Innovation, Leadership, Tips, Tricks, & Tools
You are a natural-born problem solver. From the moment you were born, you’ve solved problems. Hungry? Start crying. Learning to walk? Stand up, take a step, fall over, repeat. Want to grow your business? Fall in love with a problem, then solve it more delightfully than anyone else.
Did you notice the slight shift in how you solve problems?
Initially, you solved problems on your own. As communication became easier, you started working with others. Now, you instinctively collaborate to solve complex problems, assembling teams to tackle challenges together.
But research indicates your instincts are wrong. In fact, while collaboration can be beneficial for gathering information, it hinders the process of developing innovative solutions. This counterintuitive finding has significant implications for how teams approach problem-solving.
What a Terrorism Study Reveals About Your Team
In a 2015 study, researchers used a simulation developed by the U.S. Department of Defense to examine how collaboration impacts the problem-solving process. 417 undergrads were randomly assigned to 16-person teams with varying levels of “interconnectedness” (clarity in their team structure and information-sharing permissions) and asked to solve aspects of an imaginary terrorist attack scenario, such as identifying the perpetrators and target. Teams had 25 minutes to tackle the problem, with monetary incentives for solving it quickly.
Highly interconnected teams “gathered 5 percent more information than the least-clustered groups because clustering prevented network members from unknowingly conducting duplicative searches. ‘By being in a cluster, individuals tended to contribute more to the collective exploration through information space—not from more search but rather by being more coordinated in their search,’”
The Least Interconnected teams developed 17.5% more theories and solutions and were more likely to develop the correct solution because they were less likely to “copy an incorrect theory from a neighbor.”
How You Can Help Your Team Create More Successful Solutions
You and your team rarely face problems as dire as terrorist attacks, but you can use these results to adapt your problem-solving practices and improve results.
- Work together to gather and share information. This goes beyond emailing around research reports, interview summaries, and meeting notes. “Working together” requires your team to take action, like conducting interviews or writing surveys, with one another in real-time (not asynchronously through email, text, or “collaboration” platforms).
- Start solving the problem alone. For example, at the start of every ideation session, I ask people to spend 5 minutes privately jotting down their ideas before group brainstorming. This prevents copying others’ theories and ensures all voices are heard. (not just the loudest or most senior)
- Invite the “Unusual Suspects” into the process. Most executives know that diversity amplifies creativity, so they invite a mix of genders, ages, races, ethnicities, tenures, and industry experiences to brainstorming sessions. While that’s great, it also results in the same people being invited to every brainstorm and, ultimately, creating a highly interconnected group. So, mix it up even more. Invite people never before invited to brainstorming into the process. Instead of spending a day brainstorming, break it up into one-hour bursts at different times of the day.
Are You Willing to Take the Risk?
For most of your working life, collaboration has been the default approach to problem-solving. However, this research suggests that rethinking when and how to leverage collaboration can lead to greater success.
Making such a change isn’t easy – it invites skepticism and judgment as it deviates from the proven “status quo” process.
Are you willing to take that risk, separating information gathering from solution development, for the potential of achieving better, more innovative outcomes? Or will you remain content with “good enough” solutions from conventional methods?
by Robyn Bolton | Apr 17, 2024 | Innovation, Leadership, Stories & Examples
“But even more importantly, our employees were working from home for two and a half years. And in hindsight, it turns out, it’s really hard to do bold, disruptive innovation, to develop a boldly disruptive shoe on Zoom.” – John Donahoe, Nike CEO
I am so glad CNBC’s interview with Nike’s CEO didn’t hit my feed until Friday afternoon. It sent me into a rage spiral that I am just barely emerging from. Seriously, I think my neighbors heard the string of expletives I unleashed after reading that quote, and it wasn’t because it was a lovely day and the windows were open.
Blaming remote work for lack of innovation is cowardly. And factually wrong.
I’m not the only one giving Mr. Donahoe some side-eye for this comment. “There were a whole bunch of brands who really thrived during and post-pandemic even though they were working remotely,” Matt Powell, advisor for Spurwink River and a senior advisor at BCE Consulting, told Footwear News. “So I’m not sure that we that we can blame remote work here on Nike’s issues.”
There’s data to back that up.
In 2023, Mark (Shuai) Ma, an associate professor at the University of Pittsburgh, and Yuye Ding, a PhD student at the university’s Katz Graduate School of Business, set out to empirically determine the causes and effects of a firm’s decision to mandate a return to work (RTO). They collected RTO mandate data from over 100 firms in the S&P 500, worked backward to identify what drove the decision, and monitored and measured the firm’s results after employees returned to work.
Their findings are stark: no significant changes in financial performance for firm value after RTO mandates and significant declines in employee job satisfaction. As Ma told Fortune, “Overall, our results do not support these mandates to increase firm values. Instead, these findings are consistent with managers using RTO mandates to reassert control over employees and blame employees as a scapegoat for firm bad performance.”
Or to justify spending more than $1B to double the size of its Beaverton, OR campus.
When you start blaming employees, you stop being a leader.
CEOs make and approve big, impactful, complex, high-stakes decisions. That’s why they get paid the big bucks. It’s also why, as Harry Truman said, “The buck stops here.”
Let’s examine some of the decisions Mr. Donahue made or supported that maybe (definitely) had a more significant impact on innovation than working from home two days a week.
Ignoring customers, consumers, and the market: Nike has a swagger that occasionally strays into arrogance. They set trends, steer culture, and dictate the rules of the game. They also think that gives them the right to stop listening to athletes, retailers, and consumers, as evidenced by the recently revealed Team USA Track & Field uniforms, the decision to stop selling through major retailers like Macy’s and Olympia Sports, and invest more in “hype, limited releases, and old school retro drops” than the technology and community that has consumers flocking to smaller brands like Hoka and Brooks.
Laying off 2% of its workforce: Anyone who has ever been through a layoff senses it’s coming months before the announcement and the verdicts are rendered. Psychological safety, feeling safe in your environment, is a required element for risk-taking and innovation. It’s hard to feel safe when saying goodbye to 1500 colleagues (and wondering if/when you’ll join them).
Investing too much in the core: Speaking of safety, in uncertain times, it’s tempting to pour every resource into the core business because the ROI is “known.” Nike gave in to that temptation, and consumers and analysts noticed. Despite recent new product announcements like the Air Max DN, Pegasus Premium, and Pegasus 41, “analysts point out these ‘new’ innovations rely too much on existing franchises.”
Innovation is a leadership problem that only leaders can solve
Being a CEO or any other senior executive is hard. The past four years have been anything but ordinary, and running a business while navigating a global pandemic, multiple societal upheavals, two wars, and an uncertain economy is almost impossible.
Bosses blame. Leaders inspire.
Mr. Donohue just showed us which one he is. Which one are you?
One MORE thing
This is a losing battle, but STOP USING “DISRUPTIVE” INCORRECTLY!!!! “Disruptive Innovation,” as defined by Clayton Christensen, who literally coined the phrase, is an innovation that appeals to non-consumers and is cheaper and often lower quality than existing competitors.
Nike is a premium brand that makes premium shoes for premium athletes. Employees could spend 24/7/365 in the office, and Nike would never develop and launch a “boldly disruptive shoe.”
by Robyn Bolton | Apr 2, 2024 | Innovation, Leadership, Strategy
You’ve heard the adage that “culture eats strategy for breakfast.” Well, AI is the fruit bowl on the side of your Denny’s Grand Slam Strategy, and culture is eating that, too.
1 tool + 2 companies = 2 strategies
On an Innovation Leader call about AI, two people from two different companies shared stories about what happened when an AI notetaking tool unexpectedly joined a call and started taking notes. In both stories, everyone on the calls was surprised, uncomfortable, and a little bit angry that even some of the conversation was recorded and transcribed (understandable because both calls were about highly sensitive topics).
The storyteller from Company A shared that the senior executive on the call was so irate that, after the call, he contacted people in Legal, IT, and Risk Management. By the end of the day, all AI tools were shut down, and an extensive “ask permission or face termination” policy was issued.
Company B’s story ended differently. Everyone on the call, including senior executives and government officials, was surprised, but instead of demanding that the tool be turned off, they asked why it was necessary. After a quick discussion about whether the tool was necessary, when it would be used, and how to ensure the accuracy of the transcript, everyone agreed to keep the note-taker running. After the call, the senior executive asked everyone using an AI note-taker on a call to ask attendees’ permission before turning it on.
Why such a difference between the approaches of two companies of relatively the same size, operating in the same industry, using the same type of tool in a similar situation?
1 tool + 2 CULTURES = 2 strategies
Neither storyteller dove into details or described their companies’ cultures, but from other comments and details, I’m comfortable saying that the culture at Company A is quite different from the one at Company B. It is this difference, more than anything else, that drove Company A’s draconian response compared to Company B’s more forgiving and guiding one.
This is both good and bad news for you as an innovation leader.
It’s good news because it means that you don’t have to pour hours, days, or even weeks of your life into finding, testing, and evaluating an ever-growing universe of AI tools to feel confident that you found the right one.
It’s bad news because even if you do develop the perfect AI strategy, it won’t matter if you’re in a culture that isn’t open to exploration, learning, and even a tiny amount of risk-taking.
Curious whether you’re facing more good news than bad news? Start here.
8 culture = 8+ strategies
In 2018, Boris Groysberg, a professor at Harvard Business School, and his colleagues published “The Leader’s Guide to Corporate Culture,” a meta-study of “more than 100 of the most commonly used social and behavior models [and] identified eight styles that distinguish a culture and can be measured. I’m a big fan of the model, having used it with clients and taught it to hundreds of executives, and I see it actively defining and driving companies’ AI strategies*.
Results (89% of companies): Achievement and winning
- AI strategy: Be first and be right. Experimentation is happening on an individual or team level in an effort to gain an advantage over competitors and peers.
Caring (63%): Relationships and mutual trust
- AI strategy: A slow, cautious, and collaborative approach to exploring and testing AI so as to avoid ruffling feathers
Order (15%): Respect, structure, and shared norms
- AI strategy: Given the “ask permission, not forgiveness” nature of the culture, AI exploration and strategy are centralized in a single function, and everyone waits on the verdict
Purpose (9%): Idealism and altruism
- AI strategy: Torn between the undeniable productivity benefits AI offers and the myriad ethical and sustainability issues involved, strategies are more about monitoring than acting.
Safety (8%): Planning, caution, and preparedness
- AI strategy: Like Order, this culture takes a centralized approach. Unlike Order, it hopes that if it closes its eyes, all of this will just go away.
Learning (7%): Exploration, expansiveness, creativity
- AI strategy: Slightly more deliberate and guided than Purpose cultures, this culture encourages thoughtful and intentional experimentation to inform its overall strategy
Authority (4%): Strength, decisiveness, and boldness
- AI strategy: If the AI strategies from Results and Order had a baby, it would be Authority’s AI strategy – centralized control with a single-minded mission to win quickly
Enjoyment (2%): Fun and excitement
- AI strategy: It’s a glorious free-for-all with everyone doing what they want. Strategies and guidelines will be set if and when needed.
What do you think?
Based on the story above, what culture best describes Company A? Company B?
What culture best describes your team or company? What about your AI strategy?
*Disclaimer. Culture is an “elusive lever” because it is based on assumptions, mindsets, social patterns, and unconscious actions. As a result, the eight cultures aren’t MECE (mutually exclusive, collectively exhaustive), and multiple cultures often exist in a single team, function, and company. Bottom line, the eight cultures are a tool, not a law (and I glossed over a lot of stuff from the report)
by Robyn Bolton | Mar 19, 2024 | Innovation
Growth is the lifeblood of any organization, and the quest for growth opportunities is not just a strategic imperative. It is a fundamental necessity because the ability to identify and capitalize on opportunities is a game-changer for companies wanting to achieve sustainable success and stay ahead of the competition.
The challenge, however, is that not all opportunities are the same – some are head-smackingly obvious, while others are like trying to nail down JELL-O. Yet companies take a “one size fits all” approach to finding, developing, and capitalizing on them.
SEARCH when need to transform
What do you do when you need information but don’t know precisely what you need and certainly don’t know where to find it? You Google it or, in less-branded terms, you search for it.
When searching for growth opportunities, you’re looking for something but don’t know exactly what you need or where you’ll find it. Finding opportunities requires you to go beyond traditional market analysis and adopt a learner’s mindset to see ways to disrupt the status quo, challenge existing paradigms, and create new value propositions for your customers.
Searching is a creative process that entails investing in R&D, fostering a culture of intrapreneurship, and experimenting with new technologies. It requires a culture of creativity, experimentation, and agility to adapt to changing market dynamics. You have to be willing to be wrong on your way to being right, to move slowly so you can act quickly, and to throw out the timeline to harness the game-changing opportunity.
SEEK when you need to innovate
What do you do when you know what you need and generally where to find it? You seek it out – you go to where you think it will be, and, on the off-chance it’s not there, you pivot to Option B.
When you’re seeking growth opportunities, you have a target in mind but are not 100% sure how to hit it. Maybe you know you want to enter a new geography, but you need to figure out how to do it successfully and avoid the mistakes of previous entrants. Maybe it’s a new industry or category, but you must understand if and how to do it without disrupting your existing business model.
Seeking is both creative and analytical. You look for data and market intelligence, interview experts and individuals, analyze industry trends and explore untapped segments. It also requires you to stay open to surprises and new possibilities and take calculated risks to capitalize on emerging trends or consumer preferences. Like searching, it requires patience. Unlike searching, it respects a deadline.
STALK when you need to improve
Just like a lioness stalking a wildebeest, you do this when you see an opportunity and know exactly how to capture it. Yes, there will be zigs and zags along the way, and an unexpected competitor may pop up. But this is who you are and what you do.
When stalking opportunities, you bring the full value and power of your experience, expertise, resources, and capabilities to bear on an opportunity. This may happen when you’re operating and improving your core business. It may also occur after you’ve searched (and found) an opportunity, sought (and decided on) a strategy, and now you have the confidence to launch and scale.
Do Your Approaches Align with Your Goals?
Most companies say that they want to transform. Still, very few have the patience or intestinal fortitude to search because there is no Google for Transformation that produces the exact plan you need to transform successfully.
Companies also tend to stalk when they want to innovate, leaving opportunities to change the game and build sustainable competitive advantage on the sideline because they’re too uncertain or take too long.
Growth requires all three approaches – search, seek, and stalk – but only happens when your chosen approach aligns with your goals.
by Robyn Bolton | Mar 11, 2024 | Innovation, Leadership
In 2014, rumors started to circulate that Apple was developing a self-driving autonomous car to compete with Tesla. At the end of February 2024, rumors circulated that Apple was shutting down “Project Titan,” its car program. According to multiple media outlets, the only logical conclusion from the project’s death is that this decision signals the beginning of the end of Apple.
As much as I enjoy hyperbole and unnecessary drama, the truth is far more mundane.
The decision was just another day in the life of an innovation.
As always, there is a silver lining to this car-shaped cloud: the lessons we can learn from Apple’s efforts.
Lesson 1: Innovation isn’t all rainbows and unicorns
People think innovation is fun. It is. It is also gut-wrenching, frustrating, and infuriating. Doing something new requires taking risks, which is uncomfortable for most people. Even more challenging is that, more often than not, when you take a risk, you “fail.” (if you learned something, you didn’t fail, but that’s another article).
What you can do: Focus on the good stuff – moments of discovery, adventures when experimenting, signs that you’re making life better for others – but don’t forget that you’re defying the odds.
Lesson 2: More does not mean success
It’s been reported that Apple spent over ten billion dollars on Project Titan and that over 2000 people were working on it before it was canceled. With a market cap of over two trillion dollars, a billion dollars a year isn’t even a rounding error. But it’s still an eye-popping number, which makes Apple’s decision to cut its losses downright courageous.
What you can do: Be on guard for the sunk-cost fallacy. It’s easy to believe that you’ll eventually succeed if you keep working and pouring resources into a project. That’s not true, as Apple experienced. And in the rare cases when it is, executives are often left wondering if the success was worth the cost.
Lesson 3: Pivot based on data, not opinions
At least four different executives led Project Titan during its decade in development, and each leader brought their own vision for what the Apple Car should be. First, it was an electric vehicle with driver assistance that would compete with Tesla. Next, it was a self-driving car to compete with Google’s WayMo. Then, plans for fully autonomous driving were canceled. Finally, the team returned to its original target of matching Tesla’s Level 2 automation.
Changes in project objectives, strategies, and execution plans are necessary for innovation, so there’s nothing obviously wrong with these pivots. But the fact that they tended to happen when a new leader was appointed (and that Jony Ive caused an 18-month hiring freeze simply by expressing “displeasure”) makes me question how data-based these pivots actually were
What you can do: Be willing to change but have a high standard for what is required to cause a change. Data, even qualitative and anecdotal data, should be seriously considered. The opinion of a single executive, not so much.
Lesson 4: Dream big, build small
Apple certainly dreamed big with its aspirations to build a fully semi-autonomous vehicle and it poured billions into developing and testing the sensors, batteries, and partnership required to make it a reality. But it was never all-or-nothing in its pursuit of the automotive industry. Apple introduced CarPlay the same year it kicked off Project Titan, and it continues to offer regular updates to the system. Car Key was announced in 2020 and is now offered by BMW, Genesis, Hyundai, and Kia.
What you can do: Take a portfolio approach towards your overall innovation portfolio (Apple kept working on the iPhone, iPad, Apple Watch, and Vision Pro) and within each project. It’s not unusual that a part of the project turns out to be more valuable than the whole project.
Lesson 5: ___________________________
Yes, that is a fill-in-the-blank because I want to hear from you. What lesson are you taking away from Project Titan’s demise, and how will it make you a better innovator?
