STRATEGY CENTRAL

Stuck organizations ask the question over and over. “How can we get out of the rut we’re in? Why can’t we come up with a game-changing innovation that is more than incremental?”

Are you there?  When you look at your organization, are you looking for a way out of a rut?  You may need to look outside your own industry; outside of your own field.

One of my favorite books in the last 10 years is Mavericks at Work by Bill Taylor and Polly Labarre.  Easily one of the most marked up, dog-eared books in my library.  Bill Taylor, a co-founder of Fast Company, has a short article today over at the Harvard Publishing blog that focuses on what he refers to as, “The New Logic of R&D: Rip Off and Duplicate.”  Essentially a reference to Henry Ford’s well-known grab of the assembly line process after observing its inner workings at a meatpacking plant, Taylor observes that this is where many industries and organizations need to go.  Why?

The message is as simple as it is powerful: Ideas that are routine in one industry can be downright revolutionary when they migrate to another industry, especially when those ideas challenge the prevailing assumptions and conventional wisdom that have come to define so many industries.

The question might be, what are the ideas that are routine elsewhere that would change the game for yours?  You can read the whole article right here.

In developing a design-thinking toolbox, one skill that must be added is abductive thinking.  First, I know.  I had to add the term to my dictionary.  A concept introduced by Charles Sanders Pierce in the twentieth century, here’s the idea:

“It is not possible to prove any new thought, concept, or idea in advance; all new ideas can be validated only through the unfolding of future events.  To advance knowledge, we must turn away from our standard definition of proof–and instead stare into a mystery to ask what could be.  The answer, Pierce said, would come through making ‘a logical leap of the mind’ or an ‘inference to the best explanation’ to imagine a heuristic for understanding the mystery (p. 25, The Design of Business: Why Design Thinking is the Next Competitive Advantage).”

That’s a lot…I know, but you need to get this.  This is HUGE!  And it affects all of us, or at least the many of us who are part of organizations that are more comfortable doing again what used to work, even though we know deep down that it is not really working anymore.

Here’s where abductive reasoning comes into play.  Standard operating procedure for most organizations is to fall into the trap of analytic thinking.  Proof that something ought to be done is based on past results.  This becomes the default because intuitive thinking, “knowing without reasoning,” is too scary.  It’s about protecting against the outcome that you can’t possibly know.  As Glen Frey said in Life in the Fast Lane, “Are you with me so far?”

It leads to “worshiping at the altar of reliability (p. 24)” as opposed to pursuing validity.  How does this come into play?  If in your organization you find yourself defaulting over and over again to “we’ve always done it this way” and shying away from exploring new opportunities…then you’re probably settling for reliable over the hard work of searching for validity.

I don’t know about you, but I am a sucker for a beautiful phrase.  I tripped across this one while working my way through Change by Design.  “A team that understands what is happening will not feel bound to take the next logical step along an ultimately unproductive path (p. 17).”  What do you think?

The section I’m reading has to do with the way design thinking works in that it doesn’t progress in a linear fashion.  Instead, design thinkers start with an inspiration, move into the ideation phase where they’re beginning to generate, develop and test ideas…and then, just when you think they’d move on to implementation…they discover something unexpected and circle back to the drawing board.

Stop and think about the way you tend to work it.  What do you do once you’ve begun to move to implement?  What do you do once you’ve moved just past ideation, put a plan in place, and then begin to see a wrinkle?

If you’re like many, you simply determine what the next logical step is, even though it might actually be an unproductive path.  What should you do?  What should we do?  Not be afraid to stop in mid-implementation and return to the drawing board.

Interesting how ideas converge.  A week ago I was considering Steven Levitt’s statement that we need to “forget about what we want to be true or what we fear may be true and just look at what is actually happening.”  Bringing that into line with Andy Stanley’s statement that “path, not intent, determines destination,” it all makes sense.  Rather than taking the next logical step along an ultimately unproductive path, we need to just look at what is actually happening…and move over to the path that leads to the destination we desire.

If only it were that simple.

What doesn’t work?  The next logical step.

Want to come along on the journey?  You can pick up your copy of Change by Design right here.

One of the best things about weekends is that there is usually time to pull a new book off the stack and spend some time between the covers.  And every once in a while I find one that pulls me right in and really catches my attention.  Change by Design: How Design Thinking Transforms Organizations and Inspires Innovation, by Tim Brown is that kind of book.

Why am I reading a book about design thinking?  Better yet, why should you be reading a book about design thinking?  Easy.  All of us are in a business in which missing the point has serious consequences.  Don’t kid yourself either.  The consequences aren’t just for the customer (or the prospective customer).  In a real sense, there are consequences for me and you as well.  Don’t believe me?  Read The Parable of the Talents in Matthew 25.

Who’s Tim Brown?  Only the CEO of the celebrated design and innovation firm IDEO.  Think he might have anything to say?  I did too…so when I ran across the title a few weeks back I had to add it to my wishlist.

The first thing I noticed about the book was the whiteboard drawing on the inside front and back cover.  That kind of thing always grabs me.  This one is very cool and it turns out that it sketches out the path the book takes you on.  I don’t know if you can pick this up in the drawing here, but if you start with “Design Thinking” and then move to the Intro and then follow the path clockwise you can keep up with where things are going.  Very cool…and fascinating at the same time.

If the first 50 pages are any indication, this is going to be a really marked up book.  Want to come along?  You can pick up your copy right here.

I continue to find the idea of meaning a very interesting concept.  One that all of us ought to become familiar with and then begin to spend time thinking about…as it pertains to our business.  In Design Driven Innovation: Changing the Rules of Competition by Radically Innovating What Things Mean, meanings “reflect psychological and cultural dimensions of human beings (p. 52).”

One key to the idea of meaning is that they can change  over time.  For example, there was a time when watches were thought of as jewels and purchased in jewelry stores.  The introduction of quartz technology allowed cheaper production, mass production, and watches became thought of as a tool and added all kinds of functions that they never had before (calculators, stopwatch, calender, etc.).  The development of the Swatch brand moved the meaning of a watch again…to fashion accessory.  Not necessarily expensive.  Swatch watches often retailed for less than $40.  But fashion.

Follow so far?  Here’s why understanding the idea of meaning is important.  With the introduction of quartz technology, the Swiss share of the low end watch marketed plummeted.  “Almost 1,000 of 1,600 Swiss watch companies closed within ten years (p. 68).”  Jewel to tool as meaning caused that.  The tool to fashion move created an opportunity for Swatch.

How does it affect all of us?  What if the meaning that underlies what we do is due for a change?  What if it is overdue?  Think about the Swiss watch companies closing.  Sound familiar?

For more on the idea of meaning take a look at yesterday’s post.  And come back to follow along.

Had a four hour flight recently that allowed me to dig deep into Design Driven Innovation: Changing the Rules of Competition by Radically Innovating What Things Mean.  I continue to believe that all of us are in organizations that have limited understanding, often an antiquated understanding of why people really buy what we’re selling.  Why does this happen?  What are the consequences?  It’s serious and it happens to all of us.

A limited understanding of why people buy what we’re selling comes into play and has serious consequences when we continue to offer incremental innovations of a product that attracted a market share based on an outdated meaning.  An example of this might be the transition of music listening from large console pieces of furniture to modular and then modular to portable.  On the other hand, Apple unleashed a new meaning when they launched the iPod and iTunes, allowing consumers to create their own playlists, share their own music.

We can break out of an old mold when we practice design-driven innovation.  In design-driven innovation several questions can be asked to ignite a process (from Design Driven Innovation, page 220):

• What is the deepest reason people will buy our product?
• What meaning could they be looking for?
• How can we gratify them and make them more content by providing products that suggest new meanings?

This is a version of what Clayton Christensen described in his framework based on the “job to be done.”  In a design-driven innovation sense he has “supported the importance of targeting meanings and understanding what people are really trying to achieve when they buy products (p. 28, Design Driven Innovation).”

So, an example from our world?  Many of our organizations are still operating on the notion that people (our customers) buy what we’re selling because they know intuitively that what they need is God and God is found in a church.  Reality?  What if the deeper meaning is that people aren’t looking for God but for contentment or joy?  Does the market share lag have more to do with a tired or inaccurate meaning than anything else?  I suspect it does and encourage you to probe deeply into the deepest reason people will buy your product and what meaning they are really looking for.  That is the way to next.

When I saw this line in a recent WSJ article I caught the author's intent.  He was talking about our inherent need to slow down in life.  Things move so fast today with email, mobile web, texting and twittering…it's easy to find yourself moving at a speed for which we were not designed.

And yet, I've worked so long to drag organizations off their status quosters that I thought immediately of another great quote from Mario Andretti that has become a kind of mantra for me:

Without question, one of the best reads I've had in the last 10 years was Bill Taylor's Mavericks at Work.  Easily one of the most marked up books on my shelf.  This morning one of his blog posts caught my eye:
The 10 Questions Every Change Agent Must Answer

Are you a change agent?  I know…you may not have that title on a business card, but are you in the business of change?  It may be a wiring thing, but it's a rare day when I don't find myself face to face with the debris field where the ideas and strategies of yesterday have collided with the culture and values of tomorrow (or at least today).

One of the great lines from Taylor's article reads:

As Albert Einstein famously said, "Problems cannot be solved at the
same level of awareness that created them." Or, in the spirit of some
unknown Texas genius: "If all you ever do is all you've ever done, then
all you'll ever get is all you ever got."

1. Do you see opportunities the competition doesn't see?  I know what you're thinking.  Get past the word "competition."  The key here is that to be a change agent requires thinking about possibility.
2. Do you have new ideas about where to look for new ideas?  The answers probably will be found in an arena that you're not in.  The game is changed when we're able to look outside our own field.
3. Are you the most of anything?  This can be true of every organization.  It's not about size.  It's about a customized future.
4. If your company went out of business tomorrow, who would miss you and why?  Enough said…this is a great question.  Worthy of an extended discussion.
5. Have you figured out how your organization's history can help to shape its future?  Another fascinating discussion.  Could it be that the best things from your past could serve to shape your future?
6. Can your customers live without you?  This may be why change is scary for many leaders.  I'd say there's no question that many of our organizations would eventually come around to say "yes."  And that might motivate some to change.
7. Do you treat different customers differently?  You've got to read Taylor's comment on this one.  Too good for me to give my take.  "One test of how committed a company is to its most
   important customers is how fearless it is about ignoring customers who
   aren't central to its mission. Not all customers are created equal."  Oh my.  That is why this is an important article.
8. Are you getting the best contributions from the most people?  Who is with you?  Are you tapping into the hidden potential of the crowd?  Or only the usual suspects?
9. Are you consistent in your commitment to change?  Again…oh my.  How many of our organizations could use this word?
10. Are you learning as fast as the world is changing?  Isn't it actually the case for many, many organizations that any learning has been over for a long time?  What about yours?

This is one of those articles that you'll want to bookmark or print off and look at again and again.  You can read it right here.

I love the confluence of ideas.  There's just something about synthesis that brings out the best in my brain.  For that reason, Olson, van Bever & Verry's prescription combined with Darwin's observation make for a pretty powerful cocktail.

"Leaders must bring the underlying assumptions that drive company
strategy into line with the changes in the external environment (When Growth Stalls, by Matthew S. Olson, Derek van Bever, Seth Verry)."

Still operating with systems that worked great when people came to church in a wagon?  Still insisting that the only way to get what you need at church is by staying for the whole program?  Still operating in a print only mode?  Think mobile.  Think time-shifting (Tivo).  Think multi-media.  We are in a different world.

"It is not the strongest of the species that survive, or the most intelligent, but the ones most responsive to change."  Charles Darwin

Hmmmm.  More than a little scary.  Doesn't mean compromise.  Does mean that the facts are your friends.

I have certain tapes, CDs, podcasts, etc. that I must listen to periodically in order to stay on the right path strategically.  I found a new one last week and it is rattling my cage.  If you’re in this business to make a difference you have got to hear it.  It’s not free.  It’s $8.00.  But I’m betting you’ll get way more than your money’s worth.  You’ll find it right here.