Technology is Killing Innovation

No one has time for interruptions these days. We do everything we can to avoid the unexpected. Caller ID prevents unplanned conversations. ATMs eliminate superfluous face to face interactions. Amazon wish lists negate unnecessary shopping and returns. Technology has made it possible for us to get exactly what we want when we want it and the way we want it.

By reducing the possibility of encountering the unplanned, has technology diminished the ability to innovate?

Entrepreneurial research indicates that innovation is often driven by the ability to harness the unplanned to create a beneficial outcome. Two things have to be in place to support this:

1. There has to be unplanned occurrences.
2. People have to have the skills to leverage them in a positive way.

Dr. Saras Sarasvathy’s research on Effectuation showed that expert entrepreneurs incorporate the element of surprise to advance their ventures. They look at unanticipated events as opportunities to be exploited. In fact, they don’t just roll with the surprise, they often build on them as competitive differentiators.

For example, LL Bean turned a disastrous first product launch into their brand cornerstone by accepting all product returns, sending new, improved products as replacements, and announcing that they would always honor returns for product quality – no matter how long the customer had or used the item. This extreme level of customer service started in the early 1900s but was the platform that allowed the LL Bean company to grow a worldwide brand from a rural outpost in Maine.

Successful entrepreneurs are adept at using surprise because they exercise three characteristics:

1. Skill. They take smart chances and put themselves in positions to encounter the unexpected. By doing so, they get comfortable with being surprised and they learn how to use it to their advantage.  
2. Confidence. The more they practice their skill, the better they get. They can feel this. It strengthens their comfort with surprise.
3. Optimism. Once they see some positive outcomes, they build on it. They see that this works. So they keep at it – in bigger and bolder ways.

These mutually reinforce each other.

In contrast, most corporate managers fear surprise. They do everything possible to eliminate it. From detailed risk management plans and forecasts to the simple task of team building. (Is anyone still surprised by the birthday cake in the break room???) At the office, surprise is something to be avoided and something to be feared. The longer a manager stays in corporate the more this thinking calcifies. Its contagion spreads between teams until it permeates an entire culture.

So how can corporate managers embrace surprise and use it to their innovation advantage?

1. Acknowledge surprises. Set the tone for your team. They are watching your reaction to the unexpected and will take their behavior cues from you. Talk about your affordable loss at the outset of projects. And when the unexpected does occur, don’t immediately dismiss it. Discuss first if there is a way to leverage it positively before attempting to eliminate it.

2. Allow room for surprises. Refrain from over-engineering processes. Not everything needs to have a defined method of operation. Just because you can standardize doesn’t mean you should. Be strategic. Understand what your team objectives are and ask what you gain and what you lose before you define a process.    

3. Cultivate surprises. Develop growth assignments for innovators. Stretch your corporate innovators by putting them on teams outside of their technical and functional expertise where they can encounter new things. Look at lateral opportunities for high potentials. Put them in positions where they will have to react to surprises.  

Technology is removing the unplanned. But it is still possible to put yourself in situations of surprise. Classic movie fans will remember Inspector Clouseau of the Pink Panther. He paid his assistant to surprise him so that he would always be ready for the unexpected and prepared to act appropriately. Despite his bumbling ways Inspector Clouseau wisely said, “Without warning, I will attack you. In this way, I will keep you vigilant and alert.”

What are you doing to keep your surprise skills sharp? 

--Written by Sara Whiffen, Founder & Managing Partner, Insights Ignited LLC

Is Market Research a Waste of Time?

People have been attempting to predict the future for at least 2500 years. In the beginning, they would trek to an Oracle who would guide them on how to best position themselves to capitalize on future events. Today, the Oracle has been replaced by market researchers.  

Predicting the direction of a market has become more sophisticated and more expensive. But it remains a mainstay of innovation strategy. Companies and novice entrepreneurs alike insist on gathering data through surveys, feedback sessions, and focus groups. And our clients still don’t feel prepared for the future. These are the most common complaints we hear:

1. Market research takes too long. By the time we get the data and the analysis, our priorities or market conditions have shifted so it loses its relevance.   

2. The data is often not actionable. We get a lot of interesting insights, but not a lot that we can put into practice.   

3. The data we get is often conflicting. Different things are heard from different sources. This perpetuates our management indecision internally.

How are companies addressing these complaints? Often, their solution is to hire another market research group with new tools who promise faster, better data. And nothing changes.

If you really want to develop game changing innovations, stop trying to predict a future that cannot be predicted. Truly new and market changing advances are not inevitable or predestined. They are not found or predicted. They are formed, shaped, and created.  

Predictive tools only work when outcomes can be predicted. This seems obvious. Yet managers continue to rely on traditional predictive tools while acknowledging that they are facing unprecedented market uncertainty.

Traditional management theory has taught there are two future states. The known and the unknown. Thanks to the work of Nobel Prize laureate Herb Simon, we know now that there are three future states: the known, the unknown, and the unknowable.  

How do you know if your organization is facing an “unknowable” future?

1. The path forward is ambiguous or unclear. There are multiple possibilities that seem equally advantageous.

2. There is a lack of data available.

3. The data that is available is contradictory.

If one or more of these conditions are present, you are in the realm of the “unknowable”. In the face of this radical uncertainty, Effectuation is the toolset to use. It is how market makers create valuable new products and services when facing a future that is not just unknown, but unknowable.

What is it about Effectuation that enables innovators to create rather than predict the future? The key to getting control in unknowable situations is to co-create. Invite others to participate in building the future with you. Whether you refer to these parties as collaborators, stakeholders, partners, etc. doesn’t matter. What does matter is how you work with them. Base your co-creative relationships on commitments.

Commitments are when both parties put skin in the game to advance an overall idea. Commitments are deeper than feedback and more relevant than data. All who commit to the idea become vested in its success. As a result they will pull their resources into the venture. This expands the accessible means for the venture. It also widens the visibility and support as each party brings their networks and social capital to the venture. Whereas a feedback session is one to one and a finite transaction, a commitment-based relationship is multi-party to multi-party and presents infinite opportunities for growth based on the interests of all parties.

If market research is failing to give you the answers you need, consider giving up. Stop trying to forecast the unknowable. Instead, shift your resources towards crafting a future where you can succeed. Spend your time Effectuating rather than searching for a sign of things to come.

If you don’t create your own future, someone else will.

--Written by Sara Whiffen, Founder & Managing Partner, Insights Ignited LLC

Flip Your Fails Into Sales

When new product launches don’t go your way what’s to blame?  Is it the idea?  Or the process? 

               “We ran out of money before it got traction.”

               “Customers liked it in tests, but we got mediocre sales in market.” 

               “We went out too fast and couldn’t meet customer quality expectations.”

               These are three excuses I’ve heard recently from corporate managers who struggled with unsuccessful innovation efforts.  In each case, they identified the end result as a product failure.  They talked about the loss incurred and how their teams were sent scrambling for a better idea. 

               Companies generally respond to these types of failures in one of three ways.

1.     Restructure the team.  They put a new innovation manager in place.  Or they pull the innovation team out from the business and put it into an incubator.  Or they change the titles of the team members and rebrand the squad.  In the end, it often amounts to a cosmetic change and rarely gets to the root of what caused the innovation failure and how to turn things around. 

2.     Revisit the pipeline.  Most companies are not lacking for ideas.  When one doesn’t work, they dig up the list from past brainstorming sessions and consultant plans.  They put the same process in place to bring the next idea to market. 

3.     Re-research the market.  Seeking better data on customers, the economy, and competitors is often an easy fallback for companies when new products and services don’t behave as desired.  The infrastructure is already there in most organizations.  And every employee wants to be able to answer the “what went wrong” question with stats and charts. 

But maybe it wasn’t the idea that failed.  Maybe it was the process. 

Effectuation shows us that successful entrepreneurs are able to turn all of these excuses into market successes.  Nobody intentionally tries to exhaust all of their start up funds, launch something that doesn’t resonate, or bring a less than ready product to market.  But the act of creating leads to unknowable outcomes.

Expert entrepreneurs use them to their advantage.  Effectuation refers to this as the Lemonade Principle.  They turn lemons into lemonade. 

Here is how successful entrepreneurs react in similar situations.

1.  “We ran out of money before it got traction.”

Precommitments and partnerships are a way around this.  Have customers pay prior to development for investment heavy products.  It ensures a buyer for what you’re building. 

Partnerships also help to spread the risk and expand the network of possible payers for your innovation.  Resource constraints also force creativity.  In all likelihood if you are having trouble funding the venture, others are as well.  This opens opportunities for collaboration.  

2.  “Customers liked it in tests, but we got mediocre sales in market.” 

View your customers as partners in your innovation venture.  One way to do this is to employ some form of pre sales.  Another way is to actually co-create with them.  How can you take advantage of the skin in the game that early adopters are willing to commit?  Deepen your relationship with them and make them part of your sales force.  

Also, take a wide view of your innovation efforts.  Look not just for what you expect to happen, but what is actually happening.   Is it the product / service that customers are reacting to?  Or is it your distribution channel?  Your marketing?  Your packaging?  Your pricing?  Are they giving you an indication of what they do want that you’re not noticing?  Engage your customers in figuring this out. 

3.  “We went out too fast and couldn’t meet customer quality expectations.”

Things don’t go as planned.  So be it.  What can be controlled is your response to the unforeseen. 

Product flops, quality issues, and marketing gaffes attract customer attention.  Customers are in dialogue with you.  Make the interaction a pleasant one, and you’ll acquire a customer for life.

The lesson for managers and entrepreneurs alike: the failure might be your innovation process, not your products.  Flipping your fails into sales could be well within your control.

--Written by Sara Whiffen, Founder & Managing Partner, Insights Ignited LLC

Turn Frustration into Creation

Remember the last day of school? You couldn’t wait to break free. No more homework, teacher oversight, busy work assignments. Just the freedom to be creative. You explored. You invented.

Now think about your current work environment. Feeling the same restrictions? Boxed in? Beaten down? Micromanaged? Confined to your desk, or worse yet, a cube?

Insights Ignited worked with a multinational that had high employee fatigue. They had lots of ideas in their pipeline, yet were still losing market share. Their predictive models failed to indicate a clear winner among all of their possible options. Employees saw the writing on the wall. If they didn’t come up with some breakthrough products, another round of layoffs was inevitable. This elevated the stress level of their associates even more.

Their first solution was to bring in an entrepreneur as an inspirational speaker. That didn’t work. At the end of the “motivational” speech by the successful entrepreneur, employees had one of two reactions:

1. “Everything the entrepreneur said was true. But that will never work here”.  Or.....

2. “I’m so inspired. I have an idea of my own. I want to quit this job and work on my own idea”.

Either way, the company wasn’t the beneficiary. All they got was an increasing level of frustration as people sought external outlets for their creativity.

Then they tried Effectuation.

Effectuation empowers employees.

Effectuation puts a limit on the downside. Managers explicitly set an acceptable level of risk. But within those parameters, employees are free to innovate. Effectuation provides a framework for communicating both the risks and the process of innovating that allows managers to be comfortable with letting their employees have creative freedom.

How?

In this case, the company cited 4 components of Effectuation that they felt most contributed to increased employee engagement.

1. A common vocabulary - The language of Effectuation (e.g. Bird in Hand, Lemonade, Crazy Quilt, etc.) is memorable and easy to understand. There’s not a lot of technical jargon.

2. A shared understanding of boundaries - Effectuation requires explicit acknowledgment of risks. This allows managers to feel confident that employees understand the non-negotiables, while leaving them free to pursue innovative outcomes.   

3. Conversion of perceived negatives into positives - Setbacks are a part of trying new things. Effectuation provides a way to transform unexpected events from a project risk to a potential benefit.  

4. Innovation accountability - When a group pivots, it can be difficult to track progress. Effectuation provides metrics that hold innovation teams accountable to process as well as outcomes.

Using Effectuation, this company was able to develop and launch a product that opened a new segment for them. And they did so in a non-traditional way, using a new process and marketing approach as well. Employee satisfaction improved and they cited feeling more empowered to do their jobs.

How about you? Feeling frustrated at work? Empower yourself – and your team – through Effectuation.

--Written by Sara Whiffen, Founder & Managing Partner, Insights Ignited LLC