Posts Tagged ‘innovation’

Other people’s ideas

Thursday, December 23rd, 2010

Entrepreneurs love OPM: Other People’s Money. The acronym is pronounced “opium”, of course, an apt metaphor for the addictive nature of entrepreneurship (and perhaps money). Personally, I prefer OPI: Other People’s Ideas. I might as well confess it: I am an idea junkie and a people junkie. I love to discover new industries and new ways of looking at things in business. As importantly, I love to get to know new people, each with their own artistry in looking at the business world. At the canonic age of 56, I wake up every mornings in awe, knowing that new wonders await me in some part of the world.

A funny thing happens when I acknowledge my idea and people addiction publicly. Folks immediately feel the need to reassure me that I am not so bad at generating ideas myself, as if liking other people’s ideas was an admission of my inability to generate my own. The assumption is that my mental shelf must be pretty empty if I feel the need to invoke other people’s ideas. My tendency to latch on to selected people is often interpreted as a character flaw, an implicit recognition that I need to follow someone because I do not have what it takes to lead.

The fact that I view my craft as designing and operating the co-creative network that links great brains together is puzzling to many of my colleagues, as if I had chosen to be the equipment manager when I could be on the basketball court. I think of my role more like the team coach; I try to be the instrument of other people’s talent. I may not get the roar of the crowd for spectacular slam dunks, but I help my team win nonetheless. Most importantly, this gives me courtside access to the greatest show on earth: human creativity in action.

My ambition is far greater than having fun in my job, though. I am consumed by the notion that most organizations have their innovation process all wrong, and I shall not rest until I fix that. Simply put, we overvalue ideas and undervalue the collective process of development of these ideas and the role of humans in it. We create a revisionist view of innovation by reducing messy collective developments to a few objects we call “ideas” or “insights,” and usually overattribute maternity or paternity for them to one or two people who become lionized for their visionary aptitude. What ought to be an enterprise-wide process of co-creation gets reduced to the framing of a few ideas sponsored by a few individuals, put through a stage-gate process that aims to kill early and often, when it ought to be focused on mobilizing the creative energy of the entire enterprise and letting people make their own go/no-go decisions at much lower levels. This, of course, requires both a process and an infrastructure that organizations typically do not have today, but which they will have to develop over the next few years.

There is a lot of thought leadership required to connect thought leaders together. My wish for 2011 is to find enough humble thought leaders willing to invest their time in developing this human connectivity network, rather than attempting to become the killer node in that network.

Sandwich success at Subway

Thursday, December 3rd, 2009

Many times, the best ideas come not from inside headquarters, but from the field. A stellar example of co-created innovation comes from Subway, the ubiquitous sandwich chain, which rang up big numbers – sales of $3.81 billion in the 12 months ending in August – from a couple of round numbers: $5 for a foot-long sub. This successful offering originated not within the food labs of corporate HQ, but instead in a single franchise located within a Miami hospital. The franchisee, Stu Frankel, was seeking a way to boost weekend sales in late 2004. He hit on a simple concept: $5, “not $3.99, not $4.99,” as he later told BusinessWeek, for a sizeable sandwich.

In so doing, Frankel bucked the conventional wisdom of retailers everywhere that a penny somehow seems less to customers than a nice round number. In fact, many people seem sick of pennies, if efforts to retire the nation’s most modest coin are an indicator. Frankel’s combination of good value for a single bill was an immediate hit in his store, boosting Saturday sales by 17–22 percent and Sunday sales by over 30 percent.

The concept soon spread to other Subway outlets in Florida. To its great credit, executives at Subway headquarters in far-off Milford, CT, recognized a hit. The $5 foot-long sub rolled out nationally in March 2008, accompanied by a national ad campaign with a nice jingle.

Subway auditions

Other restaurateurs such as Taco Bell and Schlotzsky’s have since launched their own versions of the $5 deal, but Subway has continued to let innovation bubble up. The company invited customers to submit their own versions of the ad jingle to the Subway website. Hundreds of videos have been viewed hundreds of thousands of times, collectively; website visitors rate their favorites and pan the not-so-good attempts. The $5 foot-long has entered the vocabulary of popular culture, thanks to Subway’s willingness to co-create first internally, with franchisees, and then externally, with customers.

Why Starbucks and Dell get the wrong ideas

Sunday, November 15th, 2009

The classic view of innovation is one where a large number of ideas get generated, put in a funnel, and prioritized against some criteria, leading to the eventual implementation of a few ideas in a “kill early and kill often” logic. When trying to engage customers in a co-creation dialogue, many companies simply open this innovation pipeline to customers and ask them to contribute such ideas. This is for example what Starbucks does in its highly touted website, or Dell on its equally acclaimed site. There is even cheap software, now available as a service – such as the one offered by – that allows organizations to quickly put up a site using this idea generation and prioritization logic.


This approach has generated a passionate mobilization of some customers, which is laudable. But there is a significant problem: though some of the ideas submitted on the site are very good, many do not amount to a hill of beans (pun intended). The main problem is that “ideas” are not the right unit of analysis for co-creation. Ideas are typically expressed in the form of fairly naïve products or services suggestions  – e.g., “Why don’t you offer more chocolate-based products?” – or occasionally in the form of a new desirable customer experience – e.g., “I would like to not have to wait for my Frappuccino.” But customers can only imagine products or experiences they already know from somewhere else, i.e., they’re not really co-creating anything with the company. The people of Starbucks and Dell are not really engaging with customers on those sites either. They’re simply rating the pre-packaged suggestions of customers.

A more useful starting point for customers would be to imagine with employees new interaction processes through which they would engage with Starbucks or Dell. It is easier to imagine a new mode of interaction than a new experience, because an interaction involves action, while experience implies a conceptualization of some future emotional state, by definition a hazardous endeavor. For example, I may not be able to imagine the experience of eating a banana if I’ve never tasted one, but I can imagine how I would like to interact with the banana, i.e., where I would like to find it, how to store it, how to peel it, how to integrate it into a cake, etc.


The co-creation approach is closer to the management of quality – where the process is the unit of analysis – than to the management of an R&D pipeline – where ideas are the basic building blocks. The application field of co-creation is so vast that trying to co-create single ideas and managing them centrally is doomed to failure, for the same reason that trying to centrally identify and manage individual processes would be overwhelming in a quality program. Just as all processes require continuous redesign, a large number of interactions will have to be opened up to co-creation inside and outside most organizations over the next few years, making it impossible to manage these ideas in centralized fashion. A better approach is to train members of the organization and their customers in co-creation and organize them into small teams working on individual areas.

This requires a structuring in interactions that is absent on both the Starbucks and Dell sites. When becomes and yields to at Dell, the process of customer co-creation will start in earnest.

The co-creation approach is closer to the management of quality – where the process is the unit of analysis – than to the management of an R&D pipeline – where ideas are the basic building blocks. The application field of co-creation is so vast that trying to co-create single ideas and managing them centrally is doomed to failure, for the same reason that trying to centrally identify and manage individual processes would be overwhelming in a quality program. Just as all processes require continuous redesign, a large number of interactions will have to be opened up to co-creation inside and outside most organizations over the next few years, making it impossible to manage these ideas in centralized fashion. A better approach is to train members of the organization and their customers in co-creation and organize them into small teams working on individual areas.

Co-Creation from A to Z, Continued

Sunday, November 1st, 2009


More entries in the continuing series of company-centric buzzwords and their co-creative alternatives.

Experience: Something pleasurable you design for your customers because you’re perceptive and know what they want.  As a result, customers come back and you deliver more of that experience, ideally several times a day. Make sure this great experience is delivered in exactly the same fashion every time, because the more often people get exactly the same experience, the higher they rate their experience, and then you get rich.

The co-created alternative: Customers are like children – they don’t want to simply play with your toys. The little girl wants to kiss your stuffed koala, give him a name, invent stories about him, pull his eyes out, use him to club the little boy in the sandbox who annoys her, and trade what’s left of it for a new Bratz. You’re not really designing or controlling that little girl’s koala experience, are you? Think of this toy as a platform that allows the little girl to co-create her koala experience, complete with detachable eyes, weapon transformability, and second-hand koala market.

Innovation: A CEO incantation, typically supplemented by an arm-waving process controlled by a headquarters czar who reads Harvard Business Review and has a consulting budget. The czar relies on a large network of virtual resources who commit 5% of their time to attend PowerPoint meetings, during which they respond to their bosses’ e-mails coaching them to focus on real things if they want a bonus at the end of the year.

The co-created alternative: Pick the dirtiest process in the dirtiest plant you can find, and see if you can convince actors in that process to connect to some kind of customer experience in the real world. You may have to dress up Joe the Scheduler before sending him to customers, but be prepared for a new vocation as facilitator. Let Joe talk his manufacturing buddies into doing the same when he comes back from the customer workshop. Then hire a corporate czar to document the corporate innovation process proving that Joe the Scheduler is in compliance.

Market research: The art of observing unsuspecting customers or prospects in their natural habitats, or interrogating them in a poorly lit room with a window to nowhere, for a fee and the vague promise that what they say might one day reach some executive who didn’t care enough to be there in the first place. The quantitative data is then directed to PhD statisticians who build elaborate models featured at market research conferences while the qualitative data gives otherwise unemployable English majors a chance to use obscure words they learned in their Jungian philosophy class.

The co-created alternative: Smash the one-way mirror and start poking at customers. See if you can get a few of them to poke back until a massive brawl ensues. Select the fighters who care enough to duel with you late into the night and get them to volunteer as scouts for your army from there on.

Net Promoter Score: A silly question asking customers whether they like the stuff they just bought and are willing to recommend it to their Mom. From there on, customers evaluations enter an algebraic whirlpool where some votes get added (sometimes), subtracted (more often), and ignored (most of the time), ultimately producing the blinding insight that you’re more likely to be successful if people like your stuff.

The co-created alternative: For sure, liking your stuff is a good thing. But it ain’t the same as being engaged. For example, I like Gouda cheese and would highly recommend it to my friends, but I’m not that engaged with it. Conversely, I’m quite engaged with the Arsenal Football Club because I watched them cream Tottenham today and I love to read and write about their amazing coach Arsène Wenger who’s the greatest genius that ever was and is virtually from my home town. I also want to complain about the referees who are so absurdly biased against those wonderful young players who will undoubtedly win the Champions League this year if there’s any justice. I guess I’m a net promoter for both Gouda cheese and Arsenal, but somehow Arsenal seems more important in my life than Gouda cheese…

Patent: Scientific trophy aimed at recompensing ego-driven scientists pretending that what they found will one day matter to a customer in the real world.

The co-created alternative: Remember Bell Labs, long number-one in the patent charts, and now peacefully resting in the great corporate cemetery reserved for irrelevant innovators? Your scientists will undoubtedly threaten you with fire and brimstone if you open up your innovation process to the outside, but remember that they don’t have a monopoly on cleverness. Other nerds out there in China have figured out stuff that is more customer-ready than your own developments. Also be prepared for the “we’re all about IP” speech by your lawyers. Remember they’d rather deal with the overworked guy at the Patent Office than with other lawyers who are as smart as they are at these other firms that innovate with you.

Process efficiency: The art of identifying the lowest common denominator in customer expectation, and training customers to accept the unilateral standard of mediocrity you’ve just set. The best practice in process design is called “straight-through processing,” which involves the eradication of any human involvement. If people  insist on being involved, talk about “knowledge process” and dismiss it as an exception.

The co-created alternative: Processes are to interactions what, uh, solitary pleasures are to sex. You need an excellent process to handle your half of the latter, but it tends to be quite different from your best-practice process for the former. Your experience also tends to be different, not to mention your partner’s. We highly recommend co-designing the two halves of the process in the context of the two-way interaction. It’s more fun that way.

New American visionaries at IBM and Cisco

Monday, October 26th, 2009

IBM Cisco 3

It’s become customary to bash American business. Global analysts talk about a secular decline. And yes, US business has become a bit sad and dreary if you’ve spent any time around Detroit lately. But new US business leadership is emerging. Not from small start-ups this time, but from large corporations.

Take IBM. Yes, IBM. Lou Gerstner famously ridiculed the quest for a corporate “vision” in the early ’90s. His vision was only to serve customers and buy back the stock. I still get goose bumps just thinking about it. But Sam Palmisano and his team have crafted a true vision for the company. These guys believe in global collaboration. You can say it’s self-serving, since IBM sells hardware, software, and consulting services that rely on collaboration. But all good visions are self-serving. After all, IBM is a business. The vision of Palmisano’s team also goes beyond business. Their view of the future is centered on humans living on the earth, and how the interaction between both can generate new opportunities for IBM and for its clients.

I like the human centricity and breadth of ambition it conveys. It’s vintage American brassiness on a planetary scale, with a new 21st-century sensitivity. The basic belief is that if you engage a large number of people in a firm – say, 50,000 people in a large corporation — with a large number of its customers – say, another 50,000 – you’ll see new opportunities pop up from this massive co-creation of ideas. IBM has a process and technology called Innovation Jam that makes this Web-based dialogue happen over a period of 72 hours. It’s a messy process – structuring meaningful initiatives out of it is no picnic, and IBM understates the importance of live interactions — but it’s the first approach I’ve seen that approximates global democracy in business.

Taking a (good) page from the Gerstner book, IBM has first transformed itself using this mass co-creation approach internally. They shaped their new values and strategy by connecting the software technician in his Armonk cubicle all the way to the management team. The company’s omnipresent sales force is now running around the world telling customers that IBM has done well using this approach, so now it’s their turn. It’s a bit early to know how successful the approach will be. Because of Innovation Jam’s massive mobilization power, companies tend to use the approach for big issues, such as social responsibility or sustainable development, giving America an opportunity to provide new thought leadership in areas where the US has arguably been lagging (remember Kyoto?).

John Chambers and his team are largely doing the same at Cisco, where the company vision is about the “human network.” Again, Cisco has a vested interest in selling routers and other equipment that equip this human network with hardware, software, and consulting services, but there is a rich, humanistic backdrop to the business which captures the imagination of many. Cisco has even jumped ahead of IBM in thinking through the organizational implications of this new view of innovation. Their experiments provide the freshest ideas in organizational design I have seen in years.

You out there betting on the death of American thought leadership in business do so at your own risk…

Love everyone?

Monday, July 6th, 2009

Okay, full disclosure. I love the way Suzy Welch writes. She’s also a friend of a friend and I have met her once at a party (with her husband and former GE CEO, Jack Welch). Suzy and Jack have a column in the June 17 issue of BusinessWeek giving advice to commencement speakers for the class of 2009.

Their advice? Love everyone. You’ve heard me. Love everyone. How un-business is that? I can hear the snickering from here. Must have been Suzy. Jack would not write mushy stuff like that.

Their point? If you’re patient and open enough, everybody will teach you something. If I weren’t afraid of looking like the kid in college who starts his essay with “Shakespeare and I agree that …,” I would think I’ve found a soul mate (or maybe two).

Love – or at least empathy – is the cornerstone of innovation. You can’t innovate if you can’t feel. In our co-creation process, we encourage managers to “spend a day in the life of their customers”. The idea is not so much to break down analytically what customers do, but to get them to feel it. Emotion is the precursor of creation. So yes, love everyone.