Innovator's DNA--Post #10--FINAL Words

Final Notes: This book is loaded with data. The authors look at the most innovative companies like Amazon, Apple and Google. They show how to put the innovator’s DNA into practice with respect to the big three: People, Processes, and Philosophies. And after 8 years of study, the authors conclude that if you want your team to ‘think different,’ they must behave different! Here’s a great quote they end the book with. It is from Apple’s Think Different campaign: “The people who are crazy enough to think they can change the world are the ones who do.” So, go out, read this book, and change the world!

Innovator's DNA--Post #9--Discovery & Deliivery

Balancing Discovery and Delivery: Innovative CEOs score about 88% in discovery skills (questioning, associating, observing, networking, and experimenting) but only 56% in delivery skills (analyzing, planning, detail orientating, implementing, being self-disciplined). By contrast, delivery-oriented CEOs scored only 62% in discovery skills and 80% in delivery skills—not surprising, because many were picked for their delivery skills. However, when teams are more complementary—a good mixture of discovery and delivery skills—the rich mix of both of these skills produces a highly innovative team. Moreover, the authors note that striking a critical proportionate balance depends on the stage of life that the company’s in. In a start-up, more discovery skills are necessary, but as a company matures, more delivery skills are needed. However, high delivery, efficient companies can get stale without an infusion of innovative discovery thinking.

Innovators's DNA--Post #8--Experimenting

Five Discovery Skills—#5 Experimenting. Finally, innovators are constantly experimenting with new experiences and piloting new ideas. Experimenters unceasingly explore the world intellectually and experientially by holding convictions at bay and by testing hypotheses along the way. Disruptive businesses evolved through a series of experiments into a business model that changed their industry. Such experimenters apply the innovative process to discover about the past (what was) and the present (what is), and experimenting and generating data on “what might be” in the future. Amazon’s Jeff Bezos says, “Experiments are the key to innovation because they rarely turn out as you expect, and you learn so much.” Bezos encourages employees to explore. Surely, he creates a place to both succeed and fail safely. The authors offer three ways to boost creativity: live in a different country, work in a different industry, and learn a new skill. In summary, experimenters love to “deconstruct” products, processes, and ideas to understand how they work. Doing so, they also ask questions about why things work the way they do. This often triggers new ideas for how things might work better.

Innovator's DNA--Post #7--Networking

Five Discovery Skills—#4 Networking. Innovators spend a lot of energy finding and testing ideas through a diverse network of individuals with very different backgrounds and perspectives.  Innovative networkers search for new ideas by talking to people with a different view. Start-up entrepreneurs and corporate entrepreneurs are slightly better at the networking than product inventors are and quite a bit better than process inventors and non-innovators. A great way to network for innovation is to connect to a crowd of folks you don’t usually hang around with. The authors offer an example of a bridge-building innovator, Joe Morton, an entrepreneur in the health and nutrition industry who got a billion-dollar idea (Xango) during a trip to Malaysia.

Innovator's DNA--Post #6--Observing

Five Discovery Skills—#3 Observing. Innovators are also intense observers. They watch the world around them—including customers, products, services, technologies, and companies—and these observations help them gain a sense of perspective and vision. The major players of observation are product innovators, followed by start-up entrepreneurs and corporate entrepreneurs, and finally, process innovators.  Such keen observers/innovators find better ways to innovate when they (1) watch customers to see what products they “hire” to do what jobs; (2) learn to look for surprises or anomalies; and (3) find opportunities to observe in a new environment. Scientific researchers who seek to reveal and resolve anomalies tend to advance their fields more productively than those seeking to avoid them. Thus, observing the differences in scientific endeavors is as valuable as observing differences in commercial endeavors. Also note that if, from the very start, you ask really tough questions, observe salient situations, and talk to more diverse people, you will likely need to run fewer experiments to get innovation.

Innovator's DNA--Post #5--Associating

Five Discovery Skills—#2 Associating: The ability of the brain to take in new information, relate it to something else already in the brain, and create something new is a process called associating. Think about Reese’s Pieces…chocolate associated/combined creatively with peanut butter and a new candy emerges—a billion-dollar product at that. Innovators sometimes practice “forced associating” or combining things that we would never naturally combine. For example, they might imagine (or force) the combination of features in, say, lawnmower and a blender and produce a better mulching mower! The authors cite “the Medici Effect” when, during the Renaissance, the Medici family brought a variety of poets, painters, scientists and architects together to create one of history’s greatest eras of creativity. Creative leaders associate innately, but anyone can create the culture of association when you get intentional about it.

Innovator's DNA--Post #4--Questioning

Five Discovery Skills #1 Questioning.  Innovators constantly question what is—the status quo. Every high-profile innovative entrepreneur in the study scored above the seventieth percentile in questioning and associating. In fact, ignoring safe questions in favor of more audacious ones, like what would happen if we had to increase profits by 100%, makes for really disruptive changes. Leadership guru, Peter Drucker, said about the power of provocative questions: “…the important and difficult job is never to find the right answers; it is to find the right question.” Unfortunately, CEOs are constantly asked to answer questions, not pose them. Some questioning tactics to get to disruptive, high-impact innovation, include starting with “what is” (current state); then, “what caused” (origin of current state); “why” (what’s the reason); and “what if” (challenge the current state).

Innovator's DNA--Post #3: More on the Study

More on the study:  The authors focused on four types of innovators: (1) start-up entrepreneurs; (2) corporate entrepreneurs (those who launch an innovative venture from within a corporation); (3) product innovators (those who invent a new product); and, (4) process innovators (those who launch a breakthrough process). The authors also developed an ‘innovation premium’: “The proportion of a company’s market value that cannot be accounted for from cash flow of its current products or businesses in its current markets.” The most innovative companies [based on the authors’ list]—ranked by innovation premium—averaged at least a 35 percent innovation premium over the past five years. Such companies were more likely to be led by an innovative founder or a leader who scored extremely high on the five discovery skills—questioning, associating, observing, networking, and experimenting.  They scored higher than 88 percent of people taking the “discovery skills” assessment. Indeed, innovation starts with the leader. Jeff Bezos of Amazon, for example, is an excellent experimenter and has driven experimentation down into the core of Amazon.
4.    Creativity and Genetics: Anyone can develop creativity. It’s not something you’re born with. Experimentation with twins found that only about 30 percent of their creativity could be attributed to genetics; however, about 80 to 85 percent of the twins’ performance on general intelligence (IQ) tests could be attributed to genetics. Most creative types learned creativity from people who made it “safe” to experiment.

Innovator's DNA--Post #2--The Study

The Innovation DNA Study: The authors studied a hundred revolutionary founders and executives like Jeff Bezos (Amazon), Pierre Omidyar (eBay), Steve Jobs (Apple), Marc Benioff (Salesforce) and many other very recognizable, innovative CEOs.  Following an analysis of these innovative geniuses, the authors built a survey focused on the five emergent innovative skills: questioning, associating, observing, networking, and experimenting. They also collected self-reported data and 360-degree data on these discovery skills from over five hundred innovators and on over five thousand executives in more than seventy-five countries. (See their website: http://www.InnovatorsDNA.com ). They discovered the following: 1) the same pattern [of associating, networking] existed for both famous as well as less famous leaders; 2) entrepreneurs do not differ significantly (on personality traits or psychometric measures) from typical business executives; 3) most entrepreneurs launch ventures based on strategies that are not unique; 4) among entrepreneurs as a whole, only 10 to 15 percent qualify as “innovative entrepreneurs” of the disruptive kind; 5) the psychological differences between entrepreneurs and managers in large organizations are small or non-existent”; 6) there were no distinctions between traits of entrepreneurs and small business owners.

Innovator's DNA--Post #1: Overview

Overview  Innovation is literally the lifeblood of our global economy. In fact, a recent IBM poll of fifteen hundred CEOs identified creativity as the number-one “leadership competency” of the future. Here’s the focus question of the research for this book: Where do disruptive business models come from? Standing on the shoulders of research in the field, including Christensen’s works, The Innovator’s Dilemma and The Innovator’s Solution, this new book’s primary purpose was to uncover the origins of innovative, disruptive business ideas. Ultimately, the goal was to explore the minds of innovate leaders and extract a formula for innovative success—what made them “think different” as Steve Jobs extolled.  Indeed, the authors uncovered five actions/behaviors that innovators engaged in regularly:  Questioning, Associating, Observing, Networking, and Experimenting—triggering innovative thinking to deliver new businesses, products, services, or processes. [My mnemonic to remember these five activities is Q&A ONE.]  This idea of a behavior-based model bodes well for us all. In short, modify behavior and change your level of disruptive innovation. The authors also discuss balancing discovery with delivery skills in proportion to the staff of the company.

What Matters Now: Post #12--Moonshots

A Gathering of Eagles: The author, Gary Hamel, concludes his book with inspirations—management “moonshots”—provided during a gathering of 36 management leaders from industry, academia, and great companies. The ideas range from mending the soul, unleashing capabilities, and fostering renewal to seeking harmony, distributing power, and reshaping minds. These, as well as all the other innovative and bold ideas in What Matters Now, are important challenges for managers who strive to move beyond the routine business model and foster creative thinking

What Matters Now: Post #11--Ideology

Managing at HCLT [Inverting the Pyramid]: HCLT (70,000 employees and $3.5 Billion in revenue) is one of India’s and the world’s most progressive IT companies. They’ve decided to turn management upside down and give power to the many, not the few. In the latest recession, instead of taking a beating, they surged by 24%. How? They “killed” command-and-control and gave power to employees to create value for customers. And they did! CEO Vineet Nayar was the principal architect of this amazing effort. Putting employees first and the concept of “reverse accountability” that managers are accountable to followers fueled this remarkably innovative reorganization. Here’s how he did it: Transparent Data (offered financials to all employees); Online Forums (aired dirty laundry and people could raise very difficult questions); Service Level Agreements (employees could open a “service ticket” to complain about treatment, etc.); Open Evaluations (anyone gets to comment online about any manager); MyBlueprint (all unit-level plans are placed online for anyone to comment); Employee-First Councils (Communities of practice and passion open to all). Vineet summarizes: “…the CEO must become the management architect, someone who continuously asks, “What are the principles and processes that can help us surface the best ideas and unleash the talents of everyone who works here?” (page 240).

What Matters Now: Post #10--Ideology

Ideology Morning Star
Managing Without Hierarchy: Morning Star—This company is the world’s biggest processor of tomatoes and has one of the most innovative management models. Morning Star has a self-managing model (ideology), one with no directives from others and no supervisors. All employees submit their Colleague Letter of Understanding (CLOU) detailing what they must do individually to fulfill their personal missions in the company. Employees negotiate their agreements with people they interact with and include activities and performance metrics. Business Units also negotiate the same sort of CLOU with other units. Organizations are a complex web of relationships and at Morning Star, the CEO, Chris Rufer, believes that his company is stronger by making those relationships more bottom up and sideways (peer oriented) than top-down. Morning Star employs an open requisition system where employees can buy the equipment they need and are responsible to colleagues for what they bought and why. This system rests on the basic assumption: The best person to solve a problem is the one closest to it. Morning Star fosters competition for impact, not promotion (no career ladders here). People are free to: succeed (pursue their own path); have clear targets and transparent data (common data and personal metrics); calculate and consult (spend $ based on a personal business plan); manage conflict resolution and due process (mediate their issues with someone else, including a peer mediator); use peer reviews (freedom and responsibility to peers); elect compensation committees (like law firms deciding on partner comp). Such self-management leads to more initiative, expertise, flexibility, collegiality, judgment, loyalty and so much more. [See p. 229 about how to get started on this path of self-management.] Some quick steps: 1) everyone writes down their mission statement—how will they contribute to the success of their colleagues; 2) expand employee autonomy…what rules, policies, and procedures can be changed to help you succeed in your mission to help others; 3) develop a team P&L with transparent numbers; 4) remove distinctions between managers and those “managed.”