Google Firestarters 8: The Agency Innovation Conundrum

The latest in the series of Firestarters events hosted by Google and curated by Neil Perkin was all about Agency innovation. With 8 speakers each having a 10 minute slot, a great deal of ground was covered. I’ve synthesised my main thoughts and recollections below, but I’d recommend clicking through the links at the bottom of this post in order to get the full goodness of the speakers – particularly since I haven’t attributed specific points to individuals.

Innovation by scriberia

The speakers all had a slightly different perspectives, but there were several common threads running across the talks – notably muppets, memes and motherfather fruity language.

One major question was why we should be innovating at all. Lots of great stuff already exists, so why try and change things just for the sake of it? Well, on one hand, customers are constantly evolving their behaviours so innovation is required just to keep up with them. But also, and quite self-servingly, agencies are employed to be the smartest people in the room and so there is an implicit requirement to innovate in order to justify their hiring.

This can understandably be a problem, because if you are an agency specialising in x, then the answer to the business question will obviously be x, irrespective of what the question is. There can also be a tension between “innovation snobbery” and appreciation of the target audience: people in Cannes and Campaign magazine might appreciate the shiny new idea, but the general public may not.

For innovation to be effective, it needs to be beyond an idea. It should be about ends and not means. Innovations should affect our audience’s behaviours, and to do this we need to influence their motivations and opportunities.

To reflect that, innovation shouldn’t be limited to processes or environments, but to entire business models. It shouldn’t be about answering the how, but the what. And even beyond the what, the why: Why are we in this business? What are we trying to achieve? This requires investment, to fully appraise and understand the situation, and to experiment. Because innovation requires bets – strategic risks that may or may not pay off. But before that can happen, the role of innovation needs to be properly defined.

And coming up with a specific definition can be problematic. Innovation is such a wide and fuzzy topic that the disparity between theory and practice can be wide. Which is apt, as it facilitates creative experimentation to close the gap.

The talks were:

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Image credit: Neil Perkin

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Learning from Steve Jobs

Steve Jobs' fashion choices over the years

Understandably, technology news over the past week has been dominated by Steve Jobs’ resignation as Chief Executive from Apple. While he will stay on as Chairman, Tim Cook – former Chief Operating Officer – will take the helm.

There have been many wonderful pieces on Jobs (though some do read like obituaries) – these from Josh Bernoff and John Gruber being but two – which cover many angles – whether personal, professional, industry or other. I’m neither placed nor qualified to add anything new but I have enjoyed synthesising the various perspectives. Yet invariably, the person saying it the best was Jobs himself:

  • He knew what he wanted – “Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven’t found it yet, keep looking” (Stanford commencement speech)
  • He felt he knew better than anyone else – “The only problem with Microsoft is they just have no taste. They have absolutely no taste. And I don’t mean that in a small way, I mean that in a big way, in the sense that they don’t think of original ideas, and they don’t bring much culture into their products.” (Triumph of the Nerds)
  • He, along with empowered colleagues, relentlessly pursued this – “You have to trust in something — your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life.”(Stanford commencement speech)
  • He was a perfectionist – “When you’re a carpenter making a beautiful chest of drawers, you’re not going to use a piece of plywood on the back, even though it faces the wall and nobody will ever see it. You’ll know it’s there, so you’re going to use a beautiful piece of wood on the back. For you to sleep well at night, the aesthetic, the quality, has to be carried all the way through.2 (Playboy)

NB: The quotes above were taken from this Wall Street Journal article.

In Gruber’s words “Jobs’s greatest creation isn’t any Apple product. It is Apple itself.”

In 14 years he took Apple from near-bankruptcy to – briefly – the biggest company in the world by market capitalisation. He has been enormously successful. And while possibly unique – his methods run counter to textbook advice on how to run an organisation – a lot can be learned from him.

The thing I have taken most from this is Jobs’ uncompromising nature. If people weren’t on board with him, then to hell with them. This of course led to his dismissal from Apple in 1985. And his dogged focus on his preferences has informed his fashion choices over the years, as the above picture illustrates.

It might seem strange for a market researcher to take this away, particularly since research is stereotyped as decision-making by committee – something which Jobs despised:

  • “We think the Mac will sell zillions, but we didn’t build the Mac for anybody else. We built it for ourselves. We were the group of people who were going to judge whether it was great or not. We weren’t going to go out and do market research. We just wanted to build the best thing we could build.” (Playboy)
  • “For something this complicated, it’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it to them.” (BusinessWeek)

Unfortunately, this stereotype is often true, and I have been guilty of perpetuating it on occasion.

One example was when trying to get a project up and running (on a far smaller scale than rescuing Apple admittedly). With a lot of stakeholders, I tried to include as many of their wishes and requests is possible. The end result was bloated, incoherent, unfocused and over-deadline. It wasn’t one of my finer moments.

Rather than bolt everything on, I should have appraised all the input and only included that which remained pertinent to the core objective. I lost authorship of the project, and it suffered.

While there will be counter-arguments, many public failures do seem to be the result of committee-made decisions. Two bloated, incoherent examples that immediately spring to mind are Microsoft Office 2003 and the Nokia N96. Conversely, there are many examples of visionary micro-managing leaders that have driven a company to success – Walt Disney, Ralph Lauren and Ron Dennis to name but three.

I am a researcher rather than a consultant, and so don’t intend to fully adopt this approach. However, it appears that there is a greater chance of success when primary research or stakeholder input informs, rather than dictates, the final decision.

Steve Jobs knew this. His flagship products weren’t revolutionary (IBM, Microsoft, Nokia and the like were the primary innovators). But his genius was in refining a variety of inputs and stimulus, and moulding them into an expertly designed final product.

And that is something to aspire to.

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Recommended reading – 24th July 2010

I’ve been a bit neglectful of this blog over the past month or two. Come September, this should change.

I haven’t written a “recommended reading” post for over a month, so I will rectify that by posting two this weekend, featuring the very best of the various articles and blogs I’ve read over the past five weeks.

Without further ado, the first seven links I would strongly suggest that you click on are:

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Harold Evans on the Spirit of Innovation

Sir Harold Evans at the Strand Bookstore in Ne...

Image via Wikipedia

Earlier today I attended a lecture at the Royal Society of Arts given by Sir Harold Evans entitled “The Spirit of Innovation”. During an extremely distinguished career, Evans has been, among other things, Editor of both The Times and Sunday Times (of London), Publisher of Random House and an author of several acclaimed books.

This lecture was chaired by Ralph Simon, co-founder of Zomba records and Moviso.

Click through here for links to the audio and video of the event.

In the lecture, Evans covered similar issues to those I’ve been reading about as part of my course, some of which I blogged about yesterday.

The crux of the lecture was the important difference between invention and innovation. Evans defines innovation as bringing an invention to use (i.e. commercialising it). He says that a scientist will have understanding, an inventor will have a solution but an innovator will have a universal solution.

An invention without innovation is a past-time. Essentially, many inventors are hobbyists, since an MIT study has shown that fewer than 10% of patents granted have had any commercial application.

Evans says that few scientists are able to turn ideas into a commercial impact. And historically, Britain has been very good at inventing but terrible at innovating. Coinciding with Channel 4’s broadcast of a series entitled Genius of Britain, focusing upon British scientific achievements from the past 350 years, Evans cited some of the great British inventions as

  • The electronic computer
  • The radar
  • Penicillin
  • The incandescent light
  • The microchip

However, British society failed to exploit these inventions, and they were ultimately superseded by American innovations that took the fame and fortune. Indeed, Evans mentioned that many Americans think Henry Ford invented the motor car.

Evans blames a fascination with the myth of the Eureka moment. Rather than a spark of genius, innovation requires active invention and improvement.This often means that investors overestimate the pace and underestimate the capital requirements of development, meaning that an inventor needs to have commercial acumen to succeed.

For instance, Edison was prone to self-mythologising about incandescent light bulbs, when in fact he had meticulously ran over 3,000 experiments. And then he had to convince people to use it, which effectively required a new electrical grid. Evans quotes Steve Wozniak as saying that getting an invention to marketplace is as important as the product itself.

Additional reasons for Britain’s relative failure include

  • Lacking the scale of big American companies in a big market protected by high tariffs and the Defence Department
  • Systemic opposition within Britain to both mergers and democratising ideas
  • Trade Unions – which Evans characterises as anti-meritocratic bodies looking to protect the status quo irrespective of change
  • Research and Development not being collaborative and systemic, unlike in America where people get to stand on the shoulders of giants.

However, Evans says that America is now struggling under its own weight. Bureaucracy and corporatisation are stifling innovation. Evans effectively championed bootstrapping when saying creative people should move away from bureaucracy to agile experimentation.

It was also mentioned at Israel is second only to Silicon Valley in the number of patents produced, and has more companies on NASDAQ than the entire EU. Evans believes this is down to a faith in technology to push things further, perhaps influenced by the compulsory national service Israeli citizens undergo.

The lecture was followed by a bizarre and disappointing question and answer session. There was only time for a few questions from the audience, due to Simon’s ludicrous format. Armed with a trusty PowerPoint slide, he read out several different forms of innovation, prompting Evans to recite rambling anecdotes tenuously linked to the topic. Simon then revealed a second PowerPoint slide, containing questions that Evans had largely answered in his lecture. Simon seemed unable to deviate from his format, and the session sadly petered out.

However, Evans’ final thought from his lecture has stuck with me. Genius is not enough; you need to go and do something.

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Finding that extra 10% to improve

Innovation – commercialising inventions of new ideas and methods – is a necessary component of business success.

There are other factors in play, but the more innovative a business is, the more successful it is likely to be. It avoids obsolescence and finds/maintains a differential advantage, among other things.

But many people seem to be confused by what innovation involves

  • It is not a single action, but a process.
  • It is not just engineering or creating a new product; it can be at any point in the value chain
  • It doesn’t have to be part of your job title; anyone can do it

But we rarely do. And we should.

Non project work. Non admin work. Just creative thinking and problem solving (or problem creating) for the business.

Google famously allow their employees to spend 20% of their time working on personal projects, from which services such as Gmail originated.

It doesn’t have to be a new product – it could be innovating a process, a position or a paradigm. These “4 Ps of innovation” can be complemented with organisational, management and marketing innovations.

Innovation for the sake of innovation won’t work. For it to be successful it needs to

  • Be led from above, with management buy-in
  • Aligned with the company objectives
  • Communicated
  • Actioned
  • Failure tolerated (or even encouraged)
  • Rewarded

With these relatively straightforward criteria met, a culture of innovation can thrive.

It doesn’t have to be 20% of our time – it could easily be half that. Either half a day cordoned off, or 30 minutes a day supplemented with a one hour meeting.

It isn’t much, but the results can potentially be huge.

And all we have to do is find that 10%.

We should give it a try.

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Image credit: http://www.flickr.com/photos/benheine/4613609067/

The perception of disruption

Network effects hasten the rate of innovation. Therefore, the rate of technological change is faster now than it has ever been (at least if my memory of Solow-style exogenous growth models is correct.

This tends to be iterative. Small, continual improvements that improve the efficiency of processes and provide new opportunities for people to achieve their desires.

But, over time, this can be problematic.

Particularly with user perceptions.

The core proposition (and branding) of a product or service will try to remain fairly constant. But feature creep will bloat and complicate.

It is even possible that some innovations will supersede the original benefit in terms of usefulness and relevance, but it gets lost in the perceptions of users since it is only additive to the core proposition.

In order to focus upon the most useful innovations, a disruption is necessary. A break with the past.

Mobile is a good example of this.

Mobiles have evolved at a rapid rate. They got smaller as technological processes improved but then bigger as new features emerged. Cameras, music players and internet connectivity all augmented the core proposition – a device to make calls on, wherever you are.

But the internet has superseded the phone network. Email and social networks (and Skype) sit alongside voice and text, along with the numerous other benefits the mobile internet offers.

And a disruption was needed to make these innovations apparent. Because ownership doesn’t equate to usage.

This disruption was led by the iPhone.

Nokia has tended to lead technological innovations, but Apple repackaged the device. It brought back usability and simplicity, with the mobile internet at the core of the offering.

Nokia, Sony Ericsson and Samsung (NSS) may offer “smartphones” or internet enabled phones. But they are perceived fundamentally differently to the disruptors – Apple, BlackBerry and HTC/Google (ABH).

NSS represents an easy choice – a safe upgrade on something familiar with. The bells and whistles may be a bit shinier, but the phone is basically the same. And behaviour remains similar.

ABH are disruptive. They represent a new type of phone. People will think more carefully about switching. The benefits are framed in what is different or better to their current phone. Once they have invested, this behaviour needs to be justified and so they utilise the functionality. Behaviour changes.

The data from Essential Research’s Brandheld study illustrates this.

Looking purely at those claiming to own a smartphone (we gave them a consumer friendly definition outlining benefits; many wouldn’t know whether their phone allowed third party apps to be developed), there was no real difference in claimed internet use via a computer. ABH owners spend 25 hours a week online; NSS owners spend 24 hours.

But when the data for mobile internet usage is explored, a different story emerges.

  • 65% of ABH smartphone owners access the mobile internet every day; 29% of NSS smartphone owners do so
  • 78% of ABH smartphone owners access the mobile internet at all; 63% of NSS smartphone owners do so

The ABH figures are actually skewed by BlackBerry. 87% of iPhone owners say they use the internet on their phone on a daily basis. They are also far likelier to use services such as games, maps and commerce based services.

Is there hope for the incumbent? I’m not so sure. Clay Shirky noted, with regard to media companies, that there is no incentive to disrupt the core business model. Executives are used to things working successfully in one way, that they will seek to protect this for as long as possible rather than embrace the risk of the new.

Can this be combated? Maybe, but maybe not. It seems to be cyclical. Eventually the disruptor becomes the incumbent, and the process repeats itself.

On a sidenote, as previously mentioned I don’t think the iPad will disrupt the computing space. It is disrupting a market that is nascent; the mobile market was well established before it was disrupted. If anything, I think the iPad will just precipitate touchscreen laptops.

The data I used above was from Brandheld. More information about the project can be found here, and I’ve included a Slideshare presentation below that indicates some of the key findings (Although I worked heavily on the project and analysis, I didn’t write this document. As you can tell. I don’t possess Keynote and I would never include the word “insight” in a presentation)

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Image credit: http://www.flickr.com/photos/jesse_sneed/2383953694/

The Art of Innovation

To commemorate David Kelley (co-founder of IDEO) being awarded the Edison Achievement Award for his “pioneering contributions to the design of breakthrough products, services, and experiences for consumers, as well as his development of an innovative culture that has broad impact”, Fast Company have published a series of articles on the man and his company.

They are well worth reading, particularly the interview with him.

As the article states, IDEO aren’t designers but design thinkers. They use a tested and trusted methodology to redesign customer experience; not only in terms of the product but also in terms of the culture of the companies they work with. By transforming the business environment, the changes are made more sustainable in the long term. This is because the process never completes – there is always room for improvements and new prototypes.

Kelley says that “I can give our methodology away because I know we can come up with a better idea tomorrow.”

The Art of Innovation by Tom KelleyAnd indeed, it has been given away. His brother Tom Kelley published The Art of Innovation: Success through Innovation the IDEO way in 2002.

I’ve read it. And I would recommend that you do to. Below is an outline of the IDEO method, but to appreciate the nuance and to be truly inspired you really do need to read the book.

The core methodology has five steps.

Step 1: Understand the market, client, technology and perceived constraints

Ethnography is now a word overused and misused. But IDEO were pioneers of the anthropological approach and that it has now been so widely adopted speaks volumes. Of course, doing it properly is easier said than done.

Step 2: Observe real people in real-life situations to see what makes them tick

We are all now familiar with the problems of rationalised attitudes or behaviours. But again, IDEO recognised this before many. They believe observation gets to the root of the problem quicker. Small observations lead to small improvements, but over time these build into an impressive body of change. The key to observation is empathy – the observer must strive to infer the motivations and emotions of the participant.

Step 3: Visualise new concepts and the customers that would use them

This is really the power of the brainstorm. Kelley believes brainstorming should be taken seriously, and that there are ways to make them work more effectively. He finds that sixty minutes is the optimum length but within this, there should be a sharp focus. Not all ideas need to be written down but those that are should be numbered, allowing people to build and jump upon them. Although brainstorms shouldn’t be taken too seriously, they should also not be too meritocratic or too hierarchical. Everyone has ideas worth espousing, whether they are an expert or the boss or not, but it doesn’t mean that the group should go around in circles getting the opinions of everyone.

Step 4: Evaluate and refine prototypes in a series of quick iterations

Kelley refers to prototyping as a state of mind. It doesn’t matter if you have failures – you fail often to success sooner and you can often fall forwards. However, there is a balance. Fresh approaches work and rule breakers can change processes, but there needs to be a careful evaluation. Going too far “out of the box” can be counter-productive.

Step 5: Implement the new concept for commercialisation

Concepts should tell stories and make a human connection. Working with verbs and not nouns helps this. Kelley advocates a T-shirt test to ensure that new experiences or designs aren’t complex or difficult – the concept should boil down to a slogan that will fit on a t-shirt. Interestingly, he says that the best designers focus on the parts that are used the most e.g. the Play button on a DVD remote control.

However, these five steps only work because of the way IDEO is structured. Within the company, they cherish two factors above all – people and space.

Kelley says that lone geniuses are myths; you need a good team, and a mixed team, to succeed. He finds that characters build companies – his typology of characters includes visionaries, troubleshooters, iconoclasts, pulse takers, craftsmen, technologists, entrepreneurs and cross-dressers. This team should be dedicated, time-pushed, non-hierarchical, respectful of diversity, open and empowered. The dynamics are vital – camaraderie should be established, achievement celebrated and, importantly, a company shouldn’t be afraid of spending money to build morale.

His seven tips for cross-pollination include:

  • Subscribe and surf as much as possible
  • Play film director
  • Hold an open house to spread best disciplines
  • Inspire advocates
  • Hire outsiders
  • Change hats
  • Cross-train

IDEO look to establish “neighbourhoods” to facilitate team dynamics, and this concept of community and space is integral to fostering innovation. He advocates a blend of openness and privacy, with people having complete autonomy to personalise their space. To quote Kelley, “space is often the least considered, most overlooked tool in innovation toolbox”.

Ultimately, practice makes perfect. But the top tips to take away include:

  • Watch customers and non-customers – especially enthusiasts
  • Play with physical workplace to send positive body language to employees and visitors
  • Think verbs not nouns in products and services to create wonderful experiences
  • Break rules and fail forward so that change is part of culture
  • Stay human and scale organisational element so room for teams to emerge and thrive
  • Build bridges – between departments, to customers and to future

A follow-up book, The Ten Faces of Innovation, has also been published (the website with an overview is here), but for an outlay of less than two pints of lager, I really do recommend reading this book.

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