Category Archives: Strategy

Innovation book review: Little Bets by @petersims

Little Bets by Peter Sims

“The side that learns and adapts the fastest often prevails.” – General David Petraeus

You can’t mess with evolution. That’s the message I got from the book Little Bets by Peter Sims.

If you are well versed with the state of current innovation thinking, you will find that the main ideas are heavily influenced by design thinking. This is not a recipe book for design thinking. There are no how to’s. It’s strength lies in it’s synthesis of the main principles of experimental innovation. Today, more commonly known as design thinking.

It’s a well written and engaging book. I read Little Bets in a little over 6 hours. It’s a short read but entertaining read.

What stands out about the book is the distinctive stories and characters Mr. Sims uses to illustrate the main ideas. For example, how Chris Rock tests new jokes in small venues with small audiences before taking them to bigger events. This helps him tests and refine jokes that he knows will resonate with audiences at bigger events. The story of how Pixar’s Toy Story begun from little bets. How the the success of the U.S. Military’s ‘Surge Strategy’ is influenced by Design Thinking.

Problem finding: even emulation requires brains

A few years ago I was advising three guys who wanted to start a t-shirt company business in Mexico. These guys were still in college and were studying graphic design.

In Mexico there is a brand called Naco that started a trend of inverting words so something like AC/DC looks like AISI/ DISI. People found this funny and so these shirts started selling like hot cakes.

This idea has since been copycatted a million times over.

A lesson from Apple on reputation

Apple is once again telling the world that it’s a User Experience company that just so happens to make consumer electronic products. Apple is reportedly working on a way to sync iPods with iTunes wirelessly. It’s just another step in Apple’s steady march toward making wires and cords a thing of the past.

A few days ago I was making room behind my desk for the laptop, external HDD and speaker wires. As I was rearranging I started pondering how long it would take until we live in a world without wires and who would take us there.

My first thought was Apple.

What I find interesting, is that if any other ‘consumer electronics company’ would set out to eliminate wires, it probably would not be a big deal. You kind of get the idea that if Microsoft would be the first to remove wires from our lives, that they would screw it up in some way. Therefore eliminating our excitement for the ‘new experience’.

Because we know Steve Jobs to be a perfectionist, we know and trust that Apple will deliver the goods. The new experience.

And we actually want Apple to be the one to do it. Not Microsoft. Not HP. Not Dell.

Apple.

Why?

Because their reputation precedes them in the area of creating great consumer products that are as much about the experience we have as what we use them for. It is this reputation that sets them apart. It is now hardwired onto our brains that Apple creates the best consumer electronics products period.

Heck, some of us are starting to wish they should start making cars just for fun.

User experience is all about removing obstacles. Eliminating extra steps that don’t add any value. Apple is a user experience champion. They own it.

They’ve become the ‘most’ at delighting and exciting us with their products. This is key.

Like Fast Company founder, Bill Taylor, says:

You can’t be “pretty good” at everything anymore. You have to be the most of something: the most affordable, the most accessible, the most elegant, the most colorful, the most transparent. Companies used to be comfortable in the middle of the road — that’s where all the customers were. Today, the middle of the road is the road to ruin. What are you the most of?

With that said, we would all do well and learn from Apple and begin thinking about what we want to be known for. Because if we get to such a place, this is where Greatness is forged.

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Don’t look for examples, be the example

I have a client who has (so far) the only SaaS payroll management solution for small businesses in Mexico. This is both great and bad. Let me explain…

In our initial meeting I was told they used Workday as an example to follow. Their reasoning was that Workday has a very simple to use and intuitive interface, plus they are the ‘leaders’ in the field. The studied them rigorously and brought the same principles over to their solution.

This hasn’t worked as planned.

Workday has and used a distinct set of capabilities that my client doesn’t have (development experience in new technologies for one). Plus the customer is also different. And Workday’s cluster of capabilities go beyond simple copy and paste design, look and feel.

These cluster of capabilities have to solve the customers problem, make his life easier. Ultimately that’s what matters.

Is subtractive thinking the new normal?

Creativity is subtraction

Apple is on everybody’s minds these days. Yesterday, along with my partner and new team member (@dario_rivera), I was talking to a client about a few observations we had about some processes in their restaurant operation and how we think they are creating bottlenecks.

Our conversation ended up being about how there seems to be a race towards simplicity. It seems us humans are hardwired to keep on adding stuff and quite scared of eliminating.

But when everyone competes on ‘out-featuring’ (adding) the other guy, your best bet is to do the opposite and subtract (reduce/eliminate) features. It’s not that simplicity is the new normal, it always is.

benchmarking against the competition is stupid

Another reason why benchmarking against competitors is stupid

benchmarking against the competition is stupid

One of the problems of measuring an organizations innovativeness is R&D spending. If you ask people: Who’s more innovative between Apple and Microsoft? They’ll say Apple. Yet if we measure them based on patents and R&D spending, most people don’t know what they’re talking about. Microsoft blows Apple out of the water on R&D.

Yet, the reality is that Apple is more innovative than Microsoft.

Spending huge on R&D does not equal innovation.

You can spend all you want on innovation, but you can’t guarantee success. In fact, the most innovative companies are not necessarily the biggest spenders, according to Booz & Company’s recent global innovation study. What matters instead? The ability to build the right innovation capabilities to connect with the overall business strategy and other critical capabilities.

But what the heck does that mean?

These lists make for good conversation, but they also prove to be worthless if not approached with objectivity. Why?

As Jason Cohen points out, organizations (and humans) have an unhealthy fixation to emulate #1:

We tend to fixate on whoever is #1, in business as with sports, tacitly assuming that the contest is mostly skill and therefore the tournament has selected the rightful leader. But I’m not so sure we know that skill/luck proportion. I’m not so sure we can assume the contest (marketing, sales, product) and tournament (the marketplace) picks #1 based on repeatable, codify-able skill-set. Same with #2 or anyone else.

That number #1 is dictated by a system, a market, not people. On top of that, if you give people a list of the most innovative companies; they’ll want to emulate #1. It’s that simple. We’re suckers for it.

No competition = No innovation?

Can there be innovation without competition?

David Armano posited this question on his blog and I thought I add my own thoughts to the question and hopefully incite some useful discussion.

I actually think there is innovation without competition. If we all lived in a perfect world it would be pretty boring. More of the same. Who would want to like in a world like that? Not me.

The type of innovation Armano is talking about is incremental innovation. The type that leads to tit-for-tat. One firm outdoing, outworking the other one. Think line extensions and upgrades.

Both Google and Facebook are incremental innovations. Improvements over the originals. They’re simply better executed ideas than the originals. Head to head competition is never smart, it’s tit-for-tat ego driven BS that leads to predictable outcomes. Red Oceans.

The type of innovation that exists without competition is disruptive. This type of innovation is often driven by external sources, not direct competition. A recent example of what could potentially disrupt the banking industry is BankSimple. The guy who started it is not a banker (equity researcher), he was just pissed off at the complexity that is banking and decided to create an alternative.

Another example of disruptive innovation is the iPod, the Kindle, XM Satellite Radio. We could argue that Groupon is a form of disruption as it makes it possible for people to experience new things when they might not have because of price, while at the same time providing merchants with an infusion of new clients.

We could also argue that Jack Dorsey‘s newest venture, Square, can potentially disrupt the financial services space by enabling any individual or small business to accept credit cards for any product or service at any time in any place for no cost. Very powerful.

An example of a disruptive idea in direct competition (a rarity) is the Nintendo Wii because it made video games accessible to non-consumers (moms, dads).

Put simply, if you see possibilities where no one else does; you can innovate where there is no competition. But the best type of innovation though, is to go where there is no competition and define the terms of competition. To create a Blue Ocean.

What do you think, can there be innovation without competition? Do you agree with my examples? What other examples come to mind?

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