The Myth of “Unstructured” Innovation

creative-thinkingI’m grateful to everyone who commented on my post, Does Innovation Need “Structure”? Many agreed with my assertion that adopting a formalized process (“structure”) provides innovation with direction and helps create what is commonly known as culture of innovation. Yet, predictably enough, some folks disagreed. They argued that innovation requires “unstructured way of thinking.” For this reason, their argument goes, “structure stifles innovation.” Here, I’d like to address this argument.

Let me start with a brief history of iPod. If you consider, as I do, iPod as one of the most innovative products of our times and yet believe that innovation has to be “unstructured” to deliver results, then the creation of iPod must represent a classic example of highly-intuitive, uncontrolled action of a creative genius. Right? Wrong. To begin with, iPod had a predecessor, MP3 player, created by Tony Fadell (not Steve Jobs). Fadell pitched the MP3 concept to Philips and Microsoft, but was turned down. Apple then hired Fadell and put him at the helm of a dedicated and tightly managed product development team. And, by the way, Apple outsourced to other companies part of the iPod software development as well as the user interface design.

Now, I understand that Steve Jobs made some brilliant technological and business decisions in the process–perhaps, when taking shower or bath, who knows–but I don’t see anything “unstructured” in the way iPod was created.

I strongly suspect that many people calling for “unstructured way of thinking” as a prerequisite for innovation are confusing innovation and creativity. My point of view is that for as long as one considers innovation as invention (a product of creative thinking) followed by implementation (essentially project management), innovation can’t be unstructured. That being said, am I ready to concede that at least the creative thinking component of innovation is completely unstructured? No, I’m not.

In his excellent book, “Borrowing Brilliance,” David Murray showed that creative thinking was a structured six-step process. Each step has its peculiar set of features and rules, understanding and following which can make your idea more creative. I highly recommend Murray’s book to any proponent of the “unstructured thinking” concept. I’d also like to point out to the tremendous practical success of the design thinking approach, a formal methodology for creative problem solving. And I’m not going to tell Tim Brown, a design thinking guru and the author of highly influential book, “Change by Design,” that his book is no more than a collection of recipes to “stifle innovation.”

Let me finish with quoting the advertising genius David Ogilvy who, in my opinion, gave the best description of how innovation and structure are connected: “Give me the freedom of a tight brief.” This is how I interpret what Ogilvy was saying: Here is a problem we’re trying to solve. Here are the requirements any successful solution must meet. Here are the criteria we’ll apply to select the best solution. And that’s it. Now, go and find this solution. And while doing this, feel free to be creative, innovative, unexpected, unpredictable, unprecedented, uncontrolled, bold, wild, out-of-the-box and out of hand. And unstructured too, of course.

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Connecting bright ideas

IdeaConnection, an connectingopen innovation service provider, and Brightidea, a designer of on-demand innovation management software, announced that they had formed a technology and services partnership. An April 29 news release explained that customers of Brightidea will now be able to get access to IdeaConnection’s global network of highly-skilled technical experts; they will also enjoy IdeaConnection’s full range of open innovation services. In return, IdeaConnection’s customers will take advantage of Brightidea’s SaaS suite of advanced products to facilitate corporate innovation programs.

The market of innovation management services remains remarkably fractured. Take, for example, providers of open innovation services: some experts put their number at around 200 worldwide. Then there are multiple companies producing innovation management software, and so far, only Spigit and Mindjet have joined their efforts by merging into a single company. No wonder that many organizations, especially those at the very beginning of their innovation journeys, feel confused or even scared when trying to navigate this complicated maze of offerings, features and price models.

The partnership between IdeaConnection and Brightidea, while no formal M&A, is therefore a step in the right direction. Creating a one-stop shop of innovation services will help organizations launch their innovation initiatives without agony of going through an oversized toolbox of almost identical tools. This partnership also makes a lot of sense because it emphasizes the urgent need of consolidating internal corporate innovation programs and external (open) innovation activities.

In other words, the partnership between IdeaConnection and Brightidea is a bright idea.

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Does Innovation Need “Structure”?

downloadA 2012 study by Accenture found that organizations that have a holistic, formal innovation structure consistently report better outcomes of their innovation programs. But Kevin Daly of Affinnova is skeptical. In a recent piece, Daly described Affinnova’s own survey of 400 innovation practitioners involved in consumer product development. According to the survey, top performing companies (i.e. those with highest new product success rates) were no more likely to have a formal innovation system than average performing ones.

Of course, it’s tempting to explain the contradicting results by differences in the study design (the precise reading of the questions, the corporate positions of the study respondents, etc.). But the meaning of the term “innovation structure” is terribly important too.

Imagine that you just began studying a foreign language. You’re trying to apply a heavy “structure” of grammar and pronunciation rules learned from a textbook, but you’re frustrated with the results as you commit one mistake after another. With envy, you listen to a native speaker: this person remembers no rules, applies no visible “structure,” but his/her speech is perfect. And yet, however bad your newly learned language might be, you still speak it better than someone who hasn’t tried at all.

The same happens with companies practicing innovation. At the very beginning, with no prior experience in it, you do need a “structure:” an innovation charter (or, at the very least, an explicit verbal buy-in from your top management), a steering committee, a budget, a dedicated innovation team. But as your company grows more innovation-mature, as the innovation process penetrates all levels and corners of the company, as engaging in innovation activities becomes responsibility of all company employees, the “structure” gets fuzzier and fuzzier. At certain point, you may have an efficient innovation process, yet already no “holistic and formal” innovation structure. The differences in innovation maturity between companies surveyed by Accenture and Affinnova may well have contributed to the differences in their respective studies’ findings.

So, does innovation need “structure”? It does. But if you work hard to apply it to your organization, sooner or later, structure will transform into something else. It’s called culture.

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Why are Americans so forgiving for bad English?

I have timageso admit it: I’ve got a discernible Russian accent. This accent in no way complicates my socializing with multiple American friends and acquaintances. Nor does it prevent me from posting pieces to Pulse (just kidding). And yet, I suspect that on occasions, my accent makes it more difficult for strangers to understand me, especially over the phone.

So, some time ago, I told myself “Enough is enough!” and drove to Barnes & Noble. Standing in their Foreign Languages department, I was trying to find something (a course on CD?) that would help me polish my English pronunciation. And…and found nothing. The only product that came close to what I was looking for was an eight-CD “deluxe package” promising to improve my English “while driving, jogging or working out” (but of course!). But even this package mainly focused on vocabulary, idioms and dialogues (“to familiarize you with U.S. culture, from civic information to body language and social customs”).

After spending a half-hour in the aisle, I was spotted by a B&N salesperson. A nice woman approached me and asked how she could help me. I explained. Visibly puzzled, she briefly checked the content on the shelves and then turned back to me: “Whom are you going to buy it for?” “For myself,” I said. She looked almost shocked. “For you? Why? Your English is so perfect!”

I was so frustrated that my thanks for the compliment may have sounded insincere (and Russian-accented, I guess).

So, I have two questions for the readers of this post. First, can anyone recommend to me a source (a website, a CD course, whatever) I could use to systematically work on my English pronunciation: syllable after syllable, word after word, phrase after phrase?

Second, can you explain to me why the Americans are so forgiving for bad English? Why is there practically no social pressure on people like me to improve our English language skills? Is this the notorious political correctness? Or a solemn realization of the fact that in a country with so many foreigners, maintaining “pure” (American) English is just a utopia?

I’m also curious if some language violations are more “acceptable” to native speakers compared to others. Say, bad pronunciation is still better than incorrect vocabulary, and bad vocabulary is still better than grammatical indiscretions (like wrong tense or verb forms, etc.).

Всех заранее благодарю!

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Crowdsourcing data analysis–and everything else

A few weeks ago, I wMartin-Dec-2010rote about a troubling finding questioning the objectivity of the traditional market research. A team of scientists from Imperial College London conducted a study on how marketing managers choose products and services. The study showed that the more managers were trying to “put themselves in the customers’ shoes” (supposedly to understand their “needs”), the more they used their personal preferences to predict what customers really want. Moreover, in so doing, marketing managers tended to ignore available market research data. Taking to the extreme, the study implies that the products created based on market research reflect not the customer needs but rather personal preferences of marketing researchers. As a solution to this problem, the authors of the study suggested relying on team decision-making instead of individual opinions.

I believe that we need to take a more dramatic step and start replacing the traditional market research with crowdsourcing. Instead of relying on the opinion of a single individual–or even a group of individuals–marketing should switch to on-line customer forums.

A recent piece of evidence now indicates that even data analysis, a process supposed to result in “objective” answers, is plagued with individual biases. A 65-person-strong international author consortium conducted an experiment in which 61 analysts organized in 29 teams were offered exactly the same set of data. Yet, by choosing different variables to look at and employing different statistical tools, the teams came up with wildly different interpretations. That implies that any interpretation based on data analysis conducted by a single individual or a small team can hardly be trusted. The authors of the study directly call for applying crowdsourcing approaches to data analytics. In their own words:

“Crowdsourcing analytics represents a new way of doing science; a data set is made publicly available and scientists at first analyze separately and then work together to reach a conclusion while making subjectivity and ambiguity transparent.”

 I couldn’t agree more. The “wisdom of crowds” approach should be expanded to all areas of business and social activities. Research, market and otherwise, is the next, but not last, stop.

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Once again, can money buy innovation?

downloadThe question whether companies should incentivize innovation remains one of the most controversial topics in the innovation management field. Some people argue that innovation does not need to be motivated because it’s based on creativity, and creativity feeds on intrinsic motivators: natural curiosity, joy of learning, thrill of solving a difficult problem. Extrinsic motivators, such as money or other “material” rewards, can do little to make a person more creative. Hence, the argument goes, incentivizing innovation is pointless. Daniel Pink’s book “Drive” is often invoked to justify this point of view.

I happen to disagree. I believe that innovation should not be treated differently from other business processes. Therefore, employees who distinguished themselves in innovation activities should be recognized and rewarded as any other top performers within the organization: with promotions, stock-option grants and, yes, cash bonuses.

Unfortunately, academic research on incentivizing innovation is still in its infancy and doesn’t provide much help. In 2013, Baumann and Stieglitz used a computational model to show that companies could increase the efficiency of idea-generating process by offering rewards to their employees. Yet there was a caveat: offering rewards provided “a sufficient stream of good ideas, but few exceptional ones.” Moreover, increasing the size of the reward did nothing to boost the number of exceptional ideas.

More recently, Harvard Business Review published an article describing a case study conducted in a “large Asian information technology service company.” The goal of the study was to see if rewards (in the form of points that could be used at an online store) would encourage the company’s employees submit more and better ideas. The study found that when rewards were introduced, more people participated in innovation activities, resulting in overall increase in the number of submitted ideas. But what was very interesting is that on average each person submitted fewer yet better ideas.

To gain more insight into this issue, Doug Williams of IX Research and I conducted a study to evaluate whether employee engagement increases the efficiency of innovation programs. The research was aimed to answer three key questions:

  1. Does employee engagement have a positive impact on the success of innovation programs?
  2. Do organizations provide incentive to employees to encourage participation in innovation programs?
  3. What specific forms of recognition or reward do organizations use to encourage employee participation in innovation programs?

The study is now completed, and the final Report is posted to the IX Research website.

The Report’s major finding can be summarized as follows:

  • Organizations that consider innovation as their top or top-3 priority choose to establish formal innovation programs as a way to organize innovation process. The report provides evidence that such formal innovation programs improve corporate performance.
  • A variety of monetary and non-monetary rewards are used by companies to incentivize employee engagement in innovation activities.
  • Such incentivizing does have a positive impact on the efficiency of innovation programs by improving some (but not all) outcomes of these programs.

So, my answer to the question I asked last August–“Can Money Buy Innovation?”–is: yes, it can. It just doesn’t mean that you should use money only.

Image credit: http://www.texasenterprise.utexas.edu

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Don’t blame crowdsourcing for your own faults

man-looking-in-mirrorThere is a Russian saying: to break into the open door. It describes a situation when someone is trying to solve a problem that simply doesn’t exist. I’m always reminded of this saying when I hear complaints that crowdsourcing isn’t an ideal way to find “ideas,” especially “game-changing and disruptive.”

Crowdsourcing is failing to solve all of your problems? Oh horror! But why should it? Crowdsourcing is a method and as every method it has limited applicability. However exiting riding your Lamborghini on the highways might be, it will never fly you to the Moon.

Yes, I agree: crowdsourcing isn’t the best way to look for “ideas.” But one shouldn’t blame crowdsourcing. As I argued before, focusing on ideas (I call it the bottom-up approach) is just a wrong way to innovate, especially for organizations with limited experience in innovation programs. Much better alternative is the top-down approach: when organizations formulate problems crucial to their performance and then ask employees (or outside crowds) to crowdsource solutions to these problems.

Of course, finding solutions to problems isn’t the only way to use crowdsourcing. You can also apply it to defining problems themselves. This was exactly how Harvard Medical School identified a number of cutting-edge research topics to purse in the field of Type 1 diabetes. In addition, recently I suggested that in the future crowdsourcing may replace “traditional” market research.

But no matter how you’re going to use crowdsourcing, you have always to remember that crowdsourcing is first and foremost a question, a question that you ask a crowd of people. It doesn’t really matter what this question is about, for as long as it well-thought-out, properly defined and clearly articulated. Failing to do so will make your crowdsourcing campaign unfocused and eventually unsuccessful.

And if this happens, please, don’t say that crowdsourcing has failed to deliver. Or, as another Russian saying would put it: don’t blame the mirror for your bad looks.

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Is it time to replace market research with crowdsourcing?

We all Untitled-1know the drill: In order to innovate, you need to know what your customers want. In practice, companies either create marketing departments in house or order market research data from outside. The idea is that once you focused on your customers and put yourself in their shoes, you know exactly what they need. You then create a product that would satisfy this need. Bingo!

Bingo? Not so fast. Harvard Business Review has recently interviewed Johannes Hattula of Imperial College London. Dr. Hattula and his colleagues conducted a study on how marketing managers choose products and services. The study found–quite to the opposite of what was expected–that the more managers were trying to “put themselves in their customers’ shoes,” the more they used their personal preferences to predict what customers would want. Moreover, the more “customer-centric” the managers tried to be, the more they tended to ignore available market research data!

Taking to the extreme, the study implies that the products created based on marketing research reflect not the customer needs but rather personal preferences of marketing managers.

Is there any way to get around this problem? The authors suggest two possible solutions. First, managers’ decisions become less egocentric when they were just informed of their bias. I like the simplicity of this solution; however, it’s not clear to me how it will work in practice. Specifically, who exactly should be constantly reminding marketing people that they are biased? Can we make an app for that?

The second proposed solution is to rely on team decision making. As Dr. Hattula argues, “with a group you get different, perhaps opposing opinions and…[hear]…others talk about experiences that are different from yours.”

This makes a lot of sense to me, except that I’d take a step further and replace “traditional” market research with crowdsourcing. Instead of relying on the opinion of a single individual–or even a group of individuals–marketing people should use instead on-line customer forums. Available social media tools allow communicating–in real time, if needed–with literally thousands of potential customers, making marketing decisions both precise and cheap.

In other words, is it time to replace market research with prediction markets? It is.

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Is Facebook At Work a threat to innovation management software?

The Facebook logo is pictured at the Facebook headquarters in Menlo Park

Last week, Facebook released a private beta version of Facebook At Work, a new enterprise collaboration suite allowing organizations create their own social networks. FB@Work will feature a News Feed of “what’s new and relevant at your company,” extended user profiles, individual and group chats and the ability to share documents (but not editing).

Is FB@Work a threat to innovation management software? The answer to this question is yes and not yet.

By using innovation management software, organizations are targeting two major goals: connecting their employees and performing “idea management.” The answer to the above question is yes because by virtue of being an explicitly interactive app, FB@Work is directly challenging the interactive function of conventional innovation management software. Moreover, given Facebook’s tremendous popularity, FB@Work may well rapidly become software of choice for organizations that are newcomers to social networking as their employees would certainly prefer sticking to the familiar FB environment rather than learning a novel, unfamiliar design.

The answer to the above question is also not yet because for now, FB@Work doesn’t provide means for idea management: running idea contests, developing and evaluating ideas, etc. But this might be only for now. According to the FB@Work designers, the News Feed will be powered with an algorithm allowing sorting messages. Combined with the ability to share documents (and, in the future, editing them), FB@Work comes very close to a mode of targeted communications that is a hallmark of idea generation functionality provided by conventional idea management software.

Given Facebook’s vast financial and technological resources, its entering enterprise collaboration field does represent both current and growing competitive threat to companies producing innovation management software. How will the latter respond to the threat? We shall see. But a consolidation of this highly fragmented marketplace–the merger between Mindjet and Spigit being perhaps the only example of such a consolidation–may become all but inevitable.

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3 reasons why “the innovator’s DNA” is an awkward term

imagesI already wrote that as every popular topic, innovation is a powerful magnet for clichés. Unfortunately, some of them are more obstructive than instructive. For example, I’m not sure that mixing innovation with DNA is a good idea. Sure, I can appreciate an inspiring symbolism of Jeff Dyer’s et al. definition of “the innovator’s DNA”–“…each individual…ha[s] a unique innovator’s DNA for generating breakthrough business ideas”–yet I find at least three reasons why “the innovator’s DNA” is an awkward term.

  1. DNA is not the sole determinant of who we are

Ascribing innovative abilities of any person to his or her DNA implies that DNA is the sole determinant of who this person is. This simply is not the case: our features are the result of a combined action of our genetic material (represented by DNA) and the environment. The relative importance of each varies for a particular feature. For example, the color of our eyes or the curliness of our hair is almost exclusively determined by our DNA, whereas other features, say, our predisposition to diseases, are greatly influenced by “external” factors, such as a life style.

A general rule is that the more complex the human trait, the more it’s influenced by environmental factors. There is therefore every reason to believe that our ability to innovate, a complex cognitive feature, is predominantly determined by the environment. You are innovator not because you were born with “the innovator’s DNA”; you are innovator become you’ve been exposed to “the innovator’s environment.”

  1. Innovation is a change, whereas DNA is a symbol of stability

It’s fair to say that innovation is about change. Innovators must rapidly respond to changing business conditions, promptly adapt to shifting consumer preferences and closely follow technology developments. At the same time, DNA is extremely stable molecule: there are only 0.3 errors produced every time the whole human genome is reproduced. I definitely can see why Six Sigma Black Belts would worship DNA, but innovation practitioners should be looking for inspiration somewhere else.

  1. Misleading terms are prone to abuse

Once again, I can feel certain elegance in the claim that every innovator is unique, but linking this uniqueness to DNA is an invitation to abuse. For example, I cannot help but cringe when I read that “successful innovation programs have a DNA consisting of seven elements.” Ouch, these days even kids with iPads know that DNA consists of only four elements!

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