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The 5 Gifts of Uncertainty

The 5 Gifts of Uncertainty

by | Sep 30, 2020 | Innovation, Leadership, Stories & Examples

“How are you doing?  How are you handling all this?”

It seems like 90% of conversations these days start with those two sentences.  We ask out of genuine concern and also out of a need to commiserate, to share our experiences, and to find someone that understands.

The connection these questions create is just one of the Gifts of Uncertainty that have been given to us by the pandemic.

Yes, I know that the idea of uncertainty, especially in big things like our lives and businesses, being a gift is bizarre.  When one of my friends first suggested the idea, I rolled my eyes pretty hard and then checked to make sure I was talk to my smart sarcastic fellow business owner and not the Dali Lama.

But as I thought about it more, started looking for “gifts” in the news and listening for them in conversations with friends and clients, I realized how wise my friend truly was.

Faced with levels of uncertainty we’ve never before experienced, people and businesses are doing things they’ve never imagined having to do and, as a result, are discovering skills and abilities they never knew they had.  These are the Gifts of Uncertainty

  1. Necessity of offering a vision – When we’re facing or doing something new, we don’t have all the answers. But we don’t need all the answers to take action.  The people emerging as leaders, in both the political and business realms, are the ones acknowledging this reality by sharing what they do know, offering a vision for the future, laying out a process to achieve it, and admitting the unknowns and the variables that will affect both the plan and the outcome.
  2. Freedom to experiment – As governments ordered businesses like restaurants to close and social distancing made it nearly impossible for other businesses to continue operating, business owners were suddenly faced with a tough choice – stop operations completely or find new ways to continue to serve. Restaurants began to offer carry out and delivery.  Bookstores, like Powell’s in Portland OR and Northshire Bookstore in Manchester VT, also got into curbside pick-up and delivery game.  Even dentists and orthodontists began to offer virtual visits through services like Wally Health and Orthodontic Screening Kit, respectively.
  3. Ability to change – Businesses are discovering that they can move quickly, change rapidly, and use existing capabilities to produce entirely new products. Nike and HP are producing face shields. Zara and Prada are producing face masks. Fanatics, makers of MLB uniforms, and Ford are producing gowns.  GM and Dyson are gearing up to produce ventilators. And seemingly every alcohol company is making hand sanitizer.  Months ago, all of these companies were in very different businesses and likely never imagined that they could or would pivot to producing products for the healthcare sector.  But they did pivot.
  4. Power of Relationships – Social distancing and self-isolation are bringing into sharp relief the importance of human connection and the power of relationships. The shift to virtual meetups like happy hours, coffees, and lunches is causing us to be thoughtful about who we spend time with rather than defaulting to whoever is nearby.  We are shifting to seeking connection with others rather than simply racking up as many LinkedIn Connections, Facebook friends, or Instagram followers as possible.  Even companies are realizing the powerful difference between relationships and subscribers as people unsubscribed en mass to the “How we’re dealing with COVID-19 emails” they received from every company with which they had ever provided their information.
  5. Business benefit of doing the right thing – In a perfect world, businesses that consistently operate ethically, fairly, and with the best interests of ALL their stakeholders (not just shareholders) in mind, would be rewarded. We are certainly not in a perfect world, but some businesses are doing the “right thing” and rea being rewarded.  Companies like Target are offering high-risk employees like seniors pregnant women, and those with compromised immune systems 30-days of paid leave.  CVS and Comcast are paying store employees extra in the form of one-time bonuses or percent increases on hourly wages.  Sweetgreen and AllBirds are donating food and shoes, respectively, to healthcare workers.  On the other hand, businesses that try to leverage the pandemic to boost their bottom lines are being taken to task.  Rothy’s, the popular shoe brand, announced on April 13 that they would shift one-third of their production capacity to making “disposable, non-medical masks to workers on the front line” and would donate five face masks for every item purchased.  Less than 12 hours later, they issued an apology for their “mis-step,” withdrew their purchase-to-donate program, and announced a bulk donation of 100,000 non-medical masks.

Before the pandemic, many of these things seemed impossibly hard, even theoretical.  In the midst of uncertainty, though, these each of these things became practical, even necessary.  As a result, in a few short weeks, we’ve proven to ourselves that we can do what we spent years saying we could not.

These are gifts to be cherished, remembered and used when the uncertainty, inevitably, fades.

Originally published on Mat 19, 2020 on Forbes.com

Why “Innovation” is Killing Innovation (Hint: it involves peanut butter and cats)

Why “Innovation” is Killing Innovation (Hint: it involves peanut butter and cats)

by | Sep 24, 2020 | Innovation, Tips, Tricks, & Tools

Innovation is not peanut butter.

You can’t smear it all over something and enjoy the deliciousness.

In other words, “Innovation” is not a one-sized-fits-all term.  If you apply it to everything new and different that you’re doing, you’ll be confused, frustrated, and ultimately left with very little to show for your efforts.

In a previous post, I defined Innovation as something different that creates value.  For companies to increase their odds of creating value, however, they need to develop a language and discipline around at least three different types of innovation.

Why do I need different types of innovation?

Imagine if we used the word “Cat” to describe every feline from a house-cat to a lion.  If you proudly proclaim that you just got a new cat, people might wonder whether that purchase was truly legal.  If you yell, “There’s a cat behind you!” people might not react with the level of urgency required.

Specificity enables rapid understanding which leads to better decision making.

Labeling everything new and different with the term “innovation” can result in dramatically under-resourcing some efforts and prematurely canceling others.  After all, launching an entirely new business model takes far more time, money, people, and patience than launching an improved version of an existing product.  You need a language that reflects that.  

Why do I need at least three types of innovation?

Because, after decades of research and application, academics and practitioners alike seem to agree that two is too few and, since three comes after two and three seems to work, you need at least three.  (Doblin said 10 but that feels like too many to remember).

Which three should I use?

The three that best reflect your company’s strategies, priorities, and culture.

I know that’s a bit vague, but the truth is that there is no one right answer.  The only “right answer” I’ve ever seen is the one that sticks, that advances key corporate strategies, and that enables thoughtful decision making.

Start Here

When one of my clients is at the very beginning of building their innovation capability, we start simple

  1. Core Innovation is improvements to what they currently do
  2. Adjacent refers to innovations which combine existing and new elements (e.g. selling an existing offering to a new customer, selling a new offering to an existing customer, or monetizing an existing offering in a new way)
  3. Breakthrough innovations change everything (e.g. new offerings to new customers, monetized and delivered in new ways)

We then develop a high-level innovation process that can apply to all three (this helps with communication across the company and reinforces that everyone can participate in innovation). From there, we create more detailed structures, processes, tools, trainings, and timelines for each type of innovation to ensure that we have a balanced innovation portfolio, allocate appropriate levels of resources, and set realistic expectations with regards to timelines and ROI.

But what about (fill in the framework here)?

Again, the two most important things about innovation types are that (1) you define them and (2) they are practical, actionable, memorable, and enable progress against your strategic priorities.

That said, there are other Innovation Type frameworks from which you can draw inspiration.  Here are three of the most popular

McKinsey’s 3 Horizons Making its debut in the 1998 book The Alchemy of Growth, McKinsey’s 3 Horizons frameworks remains a favorite amongst consultants and executives (but not Steve Blank, who thinks it no longer applies).

The book argued that for companies to kick-start growth or continue to grow rapidly, they need to simultaneously focus on three “horizons of growth:”

  1. Horizon 1 ideas drive continuous improvements in existing offerings, business models, and capabilities
  2. Horizon 2 ideas extend the core to new customers or markets
  3. Horizon 3 ideas create new capabilities or businesses in response to disruptive opportunities or threats

Clayton Christensen

In his 2014 Harvard Business Review article, “The Capitalist’s Dilemma,” Professor Christensen wrote that the terms he famously coined, “disruptive” and “sustaining” innovation, are not types of innovation, rather they describe “the process by which innovations become dominant in established markets and the new entrants challenge incumbents.” Innovation types, however, should describe the outcome of the innovation.  The three he identified are:

  1. Performance-improving innovations that replace old products with new better models
  2. Efficiency innovations that enable companies to sell existing products to existing customers at lower prices
  3. Market-creating innovations that combine an enabling technology that rapidly reduces costs with a new business model to reach new customers, resulting in the creation of (as the name implies) entirely new markets.

P&G

From 2000 through 2012, P&G, under the leadership of CEO AG Lafley,  improved its innovation success rate from 15% to 50% and doubled the average size of successful initiatives.

One of the first steps in achieving these dramatic results was to define 4 types of innovation.

  1. Commercial innovations that increase trial and use of existing products
  2. Sustaining innovations that make existing products better, faster, cheaper, or easier to use
  3. Transformational innovations that deliver a step-change improvement in a product’s performance, ultimately setting new performance expectations for a category
  4. Disruptive innovations (new brands or business models) that “win through simplicity or affordability”

 

OK, I’m on-board.  How do I start?

My clients and I follow these four steps:

  1. Put a stake in the ground and name 3 types of innovation. Don’t overthink it.  Just pick three types and go on to step 2
  2. Share the types (names and definitions) with people and see how they react. Do they immediately understand?  Do they look confused?  Do they recoil in horror?  Get curious about their reactions and ask for feedback.  Refine your types and their definitions until a majority of people immediately understand (note: you’re not going for 100% agreement because that never happens, you’re going for “good enough with no one violently disagreeing)
  3. Map your innovation initiatives to each type.
    • Are there types with no initiatives? Is that type critical to achieving a strategic priority or key metric?
      • If yes, you have a gap in your portfolio.
      • If no, get rid of the type.
    • Are there initiatives with no types? Is that initiative critical to achieving a strategic priority or key metric?
      • If yes, create a type to describe that (and hopefully other) initiatives.
      • If no, get rid of the initiative.
  4. Share your innovation portfolio with key decision-makers and start developing your innovation strategy.

 

Congrats, you have a working draft of your Innovation Types!  You’ve taken a crucial first step in your journey getting real results from innovation.  Reward yourself with some peanut butter!

The Radical Power of Listening and How to Harness It.

The Radical Power of Listening and How to Harness It.

by | Aug 26, 2020 | Customer Centricity, Tips, Tricks, & Tools

“When you say, ‘uh-huh’ over and over like that, I can tell you’re not listening to me.”

Me, age 7, to my mom

 

It doesn’t take a lot of experience to know when someone isn’t listening.  From a young age, we can tell when someone is listening and when they’re simply responding.

When we’re with the person, we notice the lack of eye contact or the blankness in their eyes showing us where their thoughts are actually at. When we’re on the phone, we hear the repetitive and monotone mumbles that tell us they’re attention is elsewhere.

Yet often, what we want most is simply to be listened to.

This is true in our personal relationships and in our relationships with the businesses and organizations we support.  We want people and businesses to listen to our opinions, to understand them, and to thoughtfully respond to them.

Instead, people and businesses simply “hear” us.

 

There’s a big difference between listening and hearing

According to the Oxford University Press, hearing is “the faculty of perceiving sounds” while listening is “give one’s attention to a sound” and “take notice of and act on what someone says.”

As I explain to my clients, surveys, focus groups, and even in-depth qualitative research is often a Hearing exercise – the company develops a list of questions, asks their customers to answer the questions, then tabulates the answers and passes them along to whoever needs them.

This is a transaction.  An exchange of information.  It is not listening.

Listening requires engagement.  It happens during EPIC conversations, those typified by empathy, perspective, insights, and connection.

Listening accelerates innovation and drives transformation.  When we’re listening, we’re learning new information and discovering new insights, which enables companies to create and act differently, differentiating themselves from the competition and ultimately gaining an advantage.

 

Listening takes practice but here are 5 simple steps to help you get started:
  1. Drop the agenda – Before you have a conversation within someone, identify the 1-3 things you need to learn and leave space for at least 1 surprise. If you go into a conversation with an agenda or a long list of questions, you’re only going to hear what you want to hear because your mind is primed to seek confirmation for your opinions and to reject anything counter to what you’re hoping to hear.
  2. Follow where they lead – During the conversation, don’t worry about trying to steer the conversation or “keep things on track.” If you only need to learn 3 things in the conversation and you have 30 minutes or an hour, you have plenty of time for tangents, stories, and random connections.  This is where the surprises and the insights come from.
  3. Ask Why – Channel your inner two-year-old (or Toyota Production employee) and ask “Why” multiple times. When you ask “Why” you get personal, surprising answers that point to the motivations behind people’s choices and actions.  When you ask “What” you get rational, expected, even obvious answers that you, and your competitors, have heard before.
  4. Say as little as possible – Follow the 80/20 rule and spend 80% of your time listening. When you ask a question, don’t go into a long pre-amble about why you’re asking it or follow it with a long list of options or examples.  Simply ask the question and the answer will come.
  5. Let the silence work for you – After you ask a question, start counting silently in your head. Before you get to 8, the person you’re listening to will start talking.  Silence makes people uncomfortable but it’s also when the brain goes into exploration and discovery mode.  And the longer the silence goes on, the faster the brain works to come up with something to fill it.  So, stay quiet and let the brain work!

 

Whether you’re talking to a customer, a colleague, or a friend, you’re talking to someone who wants you to listen, to hear and understand what they are saying.  These 5 tips will help you do that and, if done well, discover something wonderful and unexpected with the power to transform.

Originally published on April 20, 2020 on Forbes.com

5 Ways to Go Beyond Your Customers & Serve All of Your Stakeholders

5 Ways to Go Beyond Your Customers & Serve All of Your Stakeholders

by | Jul 29, 2020 | Customer Centricity, Innovation, Strategy

Over the past several weeks, I’ve kicked off innovation projects with multiple clients.  As usual, my clients are deeply engaged and enthusiastic, eager to learn how to finally break through the barriers their organizations erect and turn their ideas into real initiatives that generate real results.

Things were progressing smoothly during the first kick-off until a client asked, “Who’s my customer?”

I was shocked.  Dumbfounded.  Speechless.  To me, someone who “grew up” in P&G’s famed brand management function and who has made career out of customer-driven innovation, this was the equivalent of asking, “why should I wear clothes?”  The answer is so obvious that the question shouldn’t need to be asked.

Taking a deep breath, I answered the question and we moved on.

A few days later, the question was asked again.  By a different client.  In a different company.  A few days later, it was asked a third time.  By yet a different client.  In yet a different company.  In a completely different industry!

What was going on?!?!?

Each time I gave an answer specific to the problem we were working to solve.  When pressed, I tried to give a general definition for “customer” but found that I spent more time talking about exceptions and additions to the definition rather than giving a concise, concrete, and usable answer.

That’s when it struck me – Being “customer-driven” isn’t enough.  To be successful, especially in innovation, you need to focus on serving everyone involved in your solution.  You need to be “stakeholder-driven.”

 

What is a customer?

According to Merriam-Webster, a customer is “one that purchases a commodity or service.”

Makes perfect sense.  At P&G, we referred to retailers like WalMart and Kroger as “customers” because they purchased P&G’s products from the company.  These retailers then sold P&G’s goods to “consumers” who used the products.

But P&G didn’t focus solely on serving its customers.  Nor did it focus solely on serving its consumers.  It focused on serving both because to serve only one would mean disaster for the long-term business.  It focused on its stakeholders.

 

What is a stakeholder?

Setting aside Merriam-Webster’s first definition (which is specific to betting), the definitions of a stakeholder are “one that has a stake in an enterprise” and “one who is involved in or affected by a course of action.”

For P&G, both customers (retailers) and consumers (people) are stakeholders because they are “involved in or affected by” P&G’s actions.  Additionally, shareholders and employees are stakeholders because they have a “stake in (the) enterprise.”

As a result, P&G is actually a “stakeholder-driven” company in which, as former CEO AG Lafley said in 2008, the “consumer is boss.”

 

How to be a stakeholder-driven organization

Focusing solely on customers is a dangerous game because it means that other stakeholders who are critical to your organization’s success may not get their needs met and, as a result, may stop supporting your work.

Instead, you need to understand, prioritize, and serve all of your stakeholders

Here’s how to do that:

  1. Identify ALL of your stakeholders. Think broadly, considering ALL the people inside and outside your organization who have a stake or are involved or affected by your work.
    1. Inside your organization: Who are the people who need to approve your work? Who will fund it?  Who influences these decisions? Who will be involved in bringing your solution to life?  Who will use it?  Who could act as a barrier to any or all of these things?
    2. Outside your organization: Who will pay for your solution? Who will use your solution?  Who influences these decisions?  Who could act as a barrier?
  2. Talk to your stakeholders and understand what motivates them. For each of the people you identify by asking the above questions, take time to actually go talk to them – don’t email them, don’t send a survey, actually go have a conversation – and seek to understand they’re point of view.  What are the biggest challenges they are facing?  Why is this challenging?  What is preventing them from solving it?  What motivates them, including incentives and metrics they need to deliver against?   What would get them to embrace a solution?  What would cause them to reject a solution?
  3. Map points of agreement and difference amongst your stakeholder. Take a step back and consider all the insights from all of your stakeholders.  What are the common views, priorities, incentives, or barriers?  What are the disagreements or points of tension?  For example, do your buyers prioritize paying a low price over delivering best-in-class performance while your users prioritize performance over price?  Are there priorities or barriers that, even though they’re unique to a single stakeholder, you must address?
  4. Prioritize your stakeholder by answering, “Who’s the boss?” Just as AG Lafley put a clear stake in the ground when he declared that, amongst all of P&G’s stakeholders, that the consumer was boss, challenge yourself to identify the “boss” for your work. For medical device companies, perhaps “the boss” is the surgeon who uses the device and the hospital executive who has the power to approve the purchase.  For a non-profit, perhaps it’s the donors who contribute a majority of the operating budget.  For an intrapreneur working to improve an internal process, perhaps it’s the person who is responsible for managing the process once it’s implemented.  To be clear, you don’t focus on “the boss” to the exclusion of the other stakeholders but you do prioritize serving the boss.
  5. Create an action plan for each stakeholder. Once you’ve spent time mapping, understanding, and prioritizing the full landscape of your stakeholder’s problems, priorities, and challenges, create a plan to address each one.  Some plans may focus on the design, features, functions, manufacturing, and other elements of your solution.  Some plans may focus on the timing and content of proactive communication.  And some plans may simply outline how to respond to questions or a negative incident.

 

Yes, it’s important to understand and serve your customers.  But doing so is insufficient for long-term success.  Identifying, understanding, and serving all of your stakeholders is required for long-term sustainability.

Next time you start a project, don’t just ask “Who is my customer?” as “Who are my stakeholders?” The answers my surprise you.  Putting those answers into action through the solutions you create and the results they produce will delight you.

Originally published on March 23, 2020 on Forbes.com

Intuition or Data: Which Leads to Better Innovation Decisions?

Intuition or Data: Which Leads to Better Innovation Decisions?

by | Jul 23, 2020 | Innovation, Tips, Tricks, & Tools

“We need more data.”

How many times have you heard this?  How many times have you rolled your eyes (physically or mentally) and then patiently tried to explain that, when you’re doing something NEW, there is NO DATA.

There are analogous innovations, things that are similar in some ways that can be used as benchmarks, but nothing exactly like what you’re creating because nothing like it has existed before within your company.

As Innovators, we constantly balance our need for and comfort with gut decisions so we can move forward at speed with the broader organization’s need for data and certainty as a way to minimize risk.

But what role should intuition and data play in the early days of innovation?

This is exactly the question that my friend and former colleague, Nick Pineda, sought to answer in his thesis, “Are relevant experience and intuition drivers of success for innovation decision-makers?  An interview-based approach”

 

Robyn: Hi Nick!  Thanks for taking the time to speak with me today.  The topic you explore in your thesis is fascinating and something every innovator struggles with.  I’m curious, what led you to decide to explore it?

Nick: Interestingly, the process of deciding what to write my thesis on actually inspired the topic itself.

For the capstone of my Masters program, we were told to do a consulting project but I had spent so many years in consulting that I wasn’t terribly excited about that prospect.  One day, as I was walking to work, I felt this feeling in my gut that said, “Nick, this is not why you’re in the Masters program.”  I shared this feeling with my professor and faculty advisor, and they were open to a different approach.

As we discussed what I could do, the same topic kept coming up – a lot of what is published about innovation, especially with Agile, is about measurement and that we need to have evidence before we take action.  I don’t disagree with that but viewing things only through that lens kills the wisp of an idea that has the potential of becoming something amazing.  Ultimately, we decided to focus my thesis on what happens on the front-end of the innovation process and whether intuition or evidence and data lead to success.

 

Robyn: And, what did you learn?

Nick: Two things, one that wasn’t surprising and one that was.

First, what wasn’t surprising is that innovation decision-makers have a really clear awareness about the role that gut feel or intuition, knowing without knowing how you know, play in their process.

Second, what was surprising, is that anyone who leans much more heavily in one direction versus another (data vs intuition), had many more failures, and struggled to process what they learned from those experiences and incorporate those learnings into future actions and decisions.  Successful innovators know how to create a dance between their rational processes and their intuitive processes.

 

Robyn: It seems so, well, intuitive that using both intuition and data to make decisions will lead to better outcomes.  However, so many innovators rely on intuition and so many companies require data, how can you encourage that “dance” that’s required for success?

Nick: You need to start small.

First with the person who’s innovating, to help them enter that inner space and recognize all the different ways that intuition can show up.   It can manifest as a sensory experience, a change in temperature, even a color.  It varies by person and by moment and the key is to recognize when it’s happening.

A simple way to create this awareness is to reflect on how you decide whether to trust someone.  Every time you meet someone new, you have to quickly decide whether or not to trust the person.  How do you do that?  What is the feeling or sense that you get that leads to your decision?  How often are you right?

Next, you need to create a language or process within the team to externalize the intuitive sense.  In my research, I found examples of visionary leaders who were constantly able to use their intuitive sense, but their teams were constantly felt left out and wondering why they did all the work when the leader was just going to decide on gut.  More successful teams were much more open about why, when, and how they were using their intuition, even specifically asking other team members to share their intuition in meetings.

Then, as leaders, we need to normalize the fact that we’re not always going to have precise evidence to know what the right call is and that we’re trusting what we’ve learned as leaders in this space to make a decision.

 

Robyn: That last point is really critical, leaders must role model the behavior they want to see and that includes using and communicating their intuition.  Anything else pop up with respect to leaders and decision-making?

Nick: Ideally, leaders will go beyond normalizing the use of intuition to actively working to dismantle the organization’s bias against it.

Most organizations consciously or subconsciously, defer to the highest paid person or the most credentialed person in the room when making decisions.  This is a highly rational behavior, but it doesn’t lead to the best decision.  The reason is that it overlooks the fact that diversity of experience surfaces other data points and intuitive experiences that need to be part of the conversation to get to a better decision.

Innovation is a group experience and when intuition is allowed to show up in groups a group intelligence starts to manifest and the group makes better decisions.

 

Robyn: That’s quite a To-Do list for leaders and decision-makers:

  1. Manage your personal dance between intuition and data
  2. Normalize intuition by creating a language around it
  3. Create ways to tap into diverse experiences and intuition

Thanks so much for sharing these great insights, Nick!

Nick: My pleasure.

 

****

 

To learn more about intuition and innovation, Nick recommends that you:

READ:

WATCH or LISTEN TO:

TAKE ACTION and Conduct an idea retrospective

    1. Anchor on an idea
      • Think back to a memorable innovation success or failure?
      • What was the idea?
      • Where did the initial idea come from?
      • If you had to pick 1-2 of the most important decisions you had to make in the process of bringing this idea to life, what were those decisions?
    2. Did you use intuition?
      • Intuition defined: Intuition is a process of rapidly recognizing things without knowing how we do the recognizing, which results in affectively charged (somatic, sensory, or emotional experience) judgements.
      • To what degree was your process intuitive?
      • To what degree were you aware of what your brain was doing to seek an answer / path forward?
    3. How did your intuition show up?
      • Signals / Cues: What signals or cues did you have about which course of action to take or not to take?
      • Knowing: How did the answer for which path forward to take “show-up” for you? Where were you? What did it feel like?
      • Feeling: What did you feel during this process?
    4. Apply More Broadly
      • In what ways is the way you explored your intuition in this case similar (or not) to other decisions you make in your life?
      • How might you be more intentional about how to bring your personal brand of intuition into your innovation process?