Sunday, September 21, 2014

Innovation through experimentation is key

The other night I read the story of the Wright brothers to my son. It is a fascinating story that highlights how important experimentation is to the success of innovation.

The Wright brothers, Orville (August 19, 1871 – January 30, 1948) and Wilbur (April 16, 1867 – May 30, 1912), were two American brothers, inventors, and aviation pioneers who were credited with inventing and building the world's first successful airplane and making the first controlled, powered and sustained heavier-than-air human flight, on December 17, 1903. From 1905 to 1907, the brothers developed their flying machine into the first practical fixed-wing aircraft. Although not the first to build and fly experimental aircraft, the Wright brothers were the first to invent aircraft controls that made fixed-wing powered flight possible. From 1900 until their first powered flights in late 1903, they conducted extensive glider tests that also developed their skills as pilots. Their bicycle shop employee Charlie Taylor became an important part of the team, building their first aircraft engine in close collaboration with the brothers.

Trial and error

Reid Hoffman, founder of LinkedIn, did not build the networking site into a $1-billion valued company in one day. He developed his skills and tested ideas while launching and experimenting at SocialNet and PayPal.

Kevin Systrom, founder of Instagram developed his skills, experimented ideas while working  at Google, Odeo, Twitter and Facebook, before launching his successful venture. “The most pivotal moment for us was when we decided to stop working on Burbn (the mobile HTML5 checkin app) and start work on what would become Instagram”, confessed Kevin.

Going back to my son, he rode his bike for the first time last spring. He worked really hard to learn how to ride. Did he work out the theory of how to do it, jump on the bike, and start riding flawlessly? Did he follow my advice on what to do and what not to do? No. He started with training wheels and worked it out through trial and error, with determination, repetition while focusing on the end goal.

Experimenting is a critical innovation skill. None of us think twice about learning to ride a bike through trial and error, so why is it so rare in business?

There are two main reasons. One is risk and failure aversion. In a work or school setting, our brains are formatted to learn theory and what the outcome should be instead of experimenting through trial and error.  People don’t like to make mistakes, and they don’t like to look foolish, whether it is an adult or a child. Trial-and-error can cause both of these things to happen when things don’t work out as expected. The second reason is that our organizational cultures are often not designed to experimenting. In larger organizations, we are often trying to improve efficiency. Doing this means that we must reduce variation and risk. But innovation and experimentation increase variation. There is a tension between efficiency and innovation.

However, the benefits of experimenting outweigh these issues. The problem that experimenting solves is this: it’s nearly impossible to know in advance which ideas will work and which won’t. If we experiment, instead of guessing which ideas will work, we can test them. This helps us get better making decisions based on data.

At a Centric event last year, John Evans from Allegion explained how his company is able to kill or shelf innovation if first results are not encouraging. It is important to encourage, allow space and time for experimentation, and coach employees that potential failures are just a way to learn how to better products. Failures are just a part in the innovation process, not a discouraging and painful end. When first results are not looking positive, John Evans’s team will either merely kill the project, or shelf it for future opportunities and experiments. Allegion employees understand that some experiments may not prove to be successful, but it is not the end, just a step (back) in the innovation process.

In the experimentation process, budget and time should not be a concern. As soon as we put barriers (budget constraints, time constraints, failure aversion), we kill the intent to create, innovate. Creativity and innovation only thrive when there is no boundaries, no aversion of failure, wasting time or money.

When the Ford factory in Detroit made a 3D printer available to its employees, it never imagined that the number of new patents registered would jump by 30 percent the first year! One Ford employee, for example, designed and produced a defogging valve prototype. If he had not been able to test his idea easily, he would have probably given up before it could take shape and be developed. Providing experimentation tools thus makes it possible to release great innovation potential, invaluable in times of crisis. The material and technical obstacles to experimentation are being lifted. Many tools are free or can be pooled, relieving the need to request additional budget. It is no longer necessary to engage experts, because prototyping tools can often be utilized intuitively. When technical skills are needed, the existence of dedicated communities makes it possible to receive immediate assistance. Technically, just about anyone can thus develop his or her own prototypes. On the other hand, intangible obstacles persist. Providing tools for experimentation is not enough to change the company culture. Many teams never or only belatedly consider developing even rough prototypes. So how can one capitalize on these new opportunities and make experimentation an everyday practice

The key is to enlighten innovation through experimentation

Eric Ries promotes a core method for experimentation. Although the Lean Startup method is essentially built for tech start-up companies, it can be applied and customized to any type of business.

Here is a method you can apply:

Ideation: form a team of various skills, expertise. Collide ideas and define what need the product or service might fill. Focus on the opportunities, not the obstacles.

Build: anything can be prototyped (product, service, customer/user experience, business model…).

Test: test not only the practicality of the prototype, but validate on a small market or through trials.

Measurement: gather qualitative and quantitative data, user insight, and figure out what works and what does not work.

Learn: from the data and insight collected, apply what you’ve learned, either to make adjustment (go back to build) or to launch. After the launch, we have to accept that we may not have made the perfect product or service right away, but that it is a opportunity to improve it and perfect it along the way, by taking consumer feedback and consumer insights.

If you’re a change agent in your organization, encourage your team to do this as well. As people get better at, things will start to improve. And you’ll start to build a culture of experimentation.

It’s like learning to ride a bike.

Monday, September 8, 2014

What we must unlearn to be innovative.

I recently came across a blog from Penelope Trunk my wife shared with me about home schooling. Common themes are found in various projects I have led where companies and individuals are stuck in their traditional way of thinking and see their business become stagnant, irrelevant and eventually die.
Through our education, from kindergarten to grad school, then through our professional lives, we have been shaped in the same mold, even though we hear here and there that we need to “think outside the box”, that box being only aimed to fit into a bigger box, like the Russian dolls. Conventionalism, risk aversion and complacency kill innovation and entrepreneurship.

We must unlearn what we have learned in order to be innovative. You don’t want to be an innovation killer, do you?

Here is a (non exhaustive) list of behaviors and thinking patterns we need to unlearn.

Unlearn how to face failure. Our society’s perception of failure is negative. We try our best to avoid failure, or hide it. There is no shame in failing. Failure is merely part of the learning process. It is a stepping stone for future success. We should embrace failure and celebrate it as much as we celebrate success.

Don’t focus on the $ bottom line. If all matters to your organization is $, your future is in jeopardy. Revenue growth, increased profit margin are only a consequence of your innovation and efficiency efforts. Innovation rarely pays off right away; it takes time, money and efforts. Innovation is an investment into the future, not a short-term $ goal. You should put aside part (the rule is 10%) of your operating budget to lead innovation efforts, with no metrics on immediate ROI (otherwise it defeats the purpose).

When you look at a problem, don’t look at it as a whole. Take it apart in pieces and start building a solution with the pieces in a different way. As an example, the Indianapolis Zoo knew they were facing a major issue with the new orangutan exhibit: an increase of 30% in attendance. Looking at the attendance and parking problem as a whole, they saw an immediate solution: expand the parking lot. This meant raising more funds to build a new parking lot, with the challenge of having an empty lot when the attendance is low. By taking the problem apart, they realized that they had to better manage the flow of visitors across the week, versus trying to fix a massive visitor influx on the weekend. They introduced a dynamic pricing, spreading attendance more evenly between busy and low periods, thus controlling the parking issue and providing a better experience to the visitors every single day.

Stop thinking that your products differentiate you from the competition. Think of Apple. In its early years, Apple represented the anti-system, anti-PC world. If you were mainstream, you were a PC user. If you were different (Apple’s “think different”) or artsy, you were a Mac user. After Steve Jobs came back to Apple and made what Apple is today, suddenly the brand became mainstream, to the point of alienating early Mac adopters. Apple products went from being in a niche to being adopted by the masses. Although they changed the industry (and literally our lives) introducing i-Pod, i-Phone, i-Pad, the Apple products have become mainstream and fully commoditized. Samsung introduced their smart watch before Apple, although the i-watch had been the talk for years. Google introduced the smart glasses first... Apple went from being the industry’s #1 brand and disruptor to being second-to-market trying to catch up with the competition. As products and services are easily commoditized, the unique differentiator comes with the brand experience a company creates for its customers or users. It is much harder to plagiarize a unique brand experience than it is to plagiarize a product or a service.

Stop thinking that you need a perfect product before you launch it. Iterate to innovate. Strive for continual innovation, not instant perfection. The best part of working on the web? Google get do-overs. Lots of them. The first version of AdWords, released in 1999, wasn’t very successful – almost no one clicked on the ads. Not many people remember that because Google kept iterating and eventually reached the model we have today. And they’re still improving it; every year Google runs tens of thousands of search and ads quality experiments, and over the past year they’ve launched over a dozen new formats. Some products they update every day. Google’s iterative process often teaches the company invaluable lessons. Watching users ‘in the wild’ as they use Google’s products is the best way to find out what works, then the company can act on that feedback. It’s much better to learn these things early and be able to respond than to go too far down the wrong path.

Stop thinking that you can’t share knowledge or ideas because you fear they’ll be stolen. Open collaboration is key to future innovation, growth and relevance. For instance, during the 2013 Day of Innovation in Indianapolis, executives from Eli Lilly and Company and Delta Faucet met and decided to collaborate on their respective innovation days inside their companies. The more you collaborate, even with your competitors, the more opportunities you create.

Stop thinking you need to stay focused on your industry and stay in your natural environment to be an expert. By looking into other industries, colliding your ideas to others, opening to new perspectives, you will open up your organization to new ways of thinking and new opportunities. Often times your competitors are not the ones closer to you, but those coming from outside your industry.

The future is in how fast you are at unlearning.