(My) innovation lessons from the World Cup...

Goooaaaaaal!!!!!!! The 2014 fútbol World Cup was a success in many ways. Highest goal average per game, German striker Klose beating the record of goals scored over several world cups, highest average number of passes per game, record score in a semi-final (7-1)...

However, like in any competitive environment, successes come along with failures and tragedies. 

What can you take away from the 2014 World Cup and apply to your business to bolster your innovation efforts?

• Your leader on the field must take responsibility and be accountable. Thiago Silva from Brazil - allegedly the world’s best defender before the world cup - failed miserably. From refusing to be part of the penalty shootout in the quarter-final game against Chile because he could not handle the pressure, to receiving a second yellow card on a stupid foul that kept him out of the tragic and pathetic semi-final match against Germany, Silva showed that if you don’t take your responsibilities and live up to your promises as a leader, repercussions on the team can be disastrous.
• You cannot just hope for the best and wait for (good) things to happen. Many allegedly inferior teams played too defensively thinking they couldn’t challenge their opponent during regular time, waiting for the penalty shootouts to (hopefully) qualify. Even The Netherlands, in their semi-final match against Argentina, played very passively while they had been a striking force in the previous games. Penalty shootouts are always a lottery. Take your destiny in your hands and make it happen, don’t wait for the lottery.
• Be disciplined yet opportunistic. Germany’s DNA is about organization, discipline, yet efficiency and opportunism. Against France, Germany did not have many scoring opportunities, but they seized one opening to score the unique goal of the game. Against Brazil, they seized all opportunities to score 4 goals in 6 minutes to kill the game after 20 minutes only. The mannschaft showed that discipline, strong organization, with the ability to be opportunistic when needed, helps you win.
• You have to rejuvenate a talented and winning team and disrupt the starters to challenge the establishment. For 4-5 years, Spain dominated the world of soccer. The golden generation was unchallenged from the 2008 European Championship, through the 2010 World Cup to the 2012 European Championship. The error in 2014 was to rely (again) too much on their (aging) golden generation and not bring new talents to the team.
• You must evolve as the game evolves. Brazil has been the poster child of soccer for decades, the winning 1970 team being the ultimate reference what what soccer should (idealistically) be. The problem is that soccer has been Europeanized in the last decade, becoming more tactical, disciplined, organized rather than relying purely on raw individual talent with a few game-changing players. Brazil failed in that category, wanting to play the same way they’ve always had.
• If you want to beat the best, you must compete with the best every single day. The US team had a fantastic run, their players defying the odds in the “group of death”, playing with their hearts out to qualify ahead of Portugal and Ghana. However, their run was cut short against Germany in the last group game and eventually against Belgium in the round of 16. What the American players lacked? The highest level of competition day after day in the top European leagues. The MLS is very far in terms of level from the top leagues on the other side on the pond. Most US players play for MLS teams, missing the opportunity to challenge the world’s best players in Europe day after day. This is no mistake why the best African, Central/South American players play in Europe. Why the US players wouldn’t?
• The team always surpasses individual talents. Ronaldo, Messi, Neymar, Silva, Hazard?  Individuals talents may make your team win one or two games occasionally, but over a month-long competition, individual talents cannot challenge organized, disciplined, unified teams. Portugal? Columbia? Belgium?... or Germany?
• If you want to win, you have to be aggressive. Conservatism means death (or in our case - elimination). If you look at the US team’s journey in this World Cup, they had their best results by playing aggressive (Portugal and Ghana). They rumbled when they played more conservative (Germany and Belgium). Why? The US team did not have anything to lose in the first two games, they were the underdogs. Suddenly after two games, they were playing for the group’s first place vs. Germany, and a qualification to the quarter-finals vs. Belgium. When there was more at stake, they played conservative. Big mistake!
• Taking risks is rewarding. Luis Van Gaal made a very bold move when he took out his starter goalkeeper in the last minutes of the extra-time period of the Dutch team’s game vs. Costa Rica to replace him by a substitute goalie. The reason? The substitute goalie was allegedly better at stopping penalty kicks. Very risky, but it paid off. For several reasons, Van Gaal could not do it vs. Argentina in the semi-final game, and The Netherlands lost.
• Innovative products can be the simplest and come from the most unexpected places. FIFA introduced the vanishing spray paint in this year’s World Cup to solve one of the most annoying bad habits of soccer players that would disturb any game. Before the spray paint, the kicker would move the ball a few yards to get closer to the cage, the opposing players forming the “wall” would move closer to the kicker, both sides cheating the 9-meter distance rule. A simple product as the spray paint fixed the 3-decade lingering issue. Cherry on the cake: it came from the oddest place, the “soccer” countries (USA and Canada), not the pure “football” countries. Blasphemy!
• “This is the way we’ve always done it” sucks! FIFA finally agreed to use the goal-line technology this year, to avoid many scandals from past tournaments when a referee would mistakenly validate (or not) a goal. With the video now, you can’t go wrong. Strangely enough, UEFA refuses (for now) to implement the technology for the 2016 European Championship, because this goes “against the pure nature” of the game. Major other sports use this technology, even the very-steeped-in-tradition international tennis association!
• Cultural transformation is critical in order to survive. After several failures in the 90s, Germany went through a complete cultural transformation in the early 2000s (started with Juergen Klinsmann with his assistant Joachim Low, respectively now head coach of US team and German team). Increased collaboration with between the Bundesliga clubs and the national team, development of the training centers for young talents, more movement, more rapid and technical play on the ground, no “star player” but a cohesion of complementary players (from starters to bench)... They reached at least the semi-finals in the last 4 World Cups, and final won yesterday.

What have YOU learned from the World Cup?

Image credit: http://www.fifa.com/worldcup/teams/team=43948/photos/index.html

Don’t be afraid of change.

C’est comme ça. Early this year, Monday January 24’s violent attacks by striking cab drivers on Uber cars in Paris — with protesters shattering windows, smashing mirrors and slashing tires — were the perfect illustration of change resistance from an industry which has championed the status quo for decades.
Cab drivers said Uber and apps like it, which allow customers to hitch rides nearly instantly from their smartphones, created unfair competition and undermined the traditional cab-hailing business.
It is the opposite: Uber is merely an enhancement of a taxi service, using mobile technology, paired with a lower pricing strategy, convenience, responsiveness, and customer care, not an unfair competition. If you have ridden in a Parisian cab (it could be applied to New York cabs as well), it is a nightmare (dirty, smelly cards, rude drives who rip you off driving all around the peripherique instead of going straight to your destination, and so on).
Instead of embracing the change that Uber brings as an opportunity to improve their operations model, pricing strategy, and (horrible) customer care, French cab drivers did it the French way: destroy, then discuss and negotiate to maintain the status quo, or higher fees. C’est comme ça (that’s the way it is), say the French.

Change happens. It doesn't care whether you like it or not. Change doesn't need your permission. Change is the one constant in business. What you decide to do with change is up to you.

Why don’t people like change?

Heidi Grant Halvorson, PhD, says that it's not just that people fear change, though they undoubtedly do. It's also that they genuinely believe (often on an unconscious level) that when you've been doing something a particular way for some time, it must be a good way to do things. And the longer you've been doing it that way, the better it is.

Rosabeth Moss Kanter, in a HBR blog, reveals the 10 most common reasons why people don’t like change, such as:
- Loss of control
- Excess uncertainty
- Dislike of surprises
- Doing something differently creates confusion
- Concerns about competence
- More work 

Embrace change

We should not be afraid of change, we should embrace it. For individuals, change is the path to both personal and professional growth, the path to a happier life.
For businesses, change is the drive to more opportunities, to increase in market shares, to the development of new products…

Now, take the time to think… How would your company be different:

-if your staff were inspired about change, rather than paralyzed by it?
-if your leaders could raise performances to meet the oncoming changes, and innovate their way into the future?
-if you knew which trends were impacting your industry today and how to position your thinking favorably for the future?

In today's competitive market place, you need to stay relevant to survive. The Council on Global Competitiveness's March 2005 landmark report stated that "innovation will be the single most important factor in determining America's success through the 21st century (...). The past 50 years we have optimized our organizations for efficiency and quality. But the next 50 years we must optimize ourselves for innovation." Innovation is about changing the game.

In a complex and ever-changing economic environment, innovation is critical for companies to survive. Roland Moreno, the French inventor of the chip on your VISA or MASTERCARD promoted what he called "permanent chaos": a permanent state of mind that employees must have to foster innovation.

Many people think innovation is primarily a R&D function. But innovation should be understood to include the entire value chain: from R&D to engineering, manufacturing, distribution, sales, marketing, and even facility utilization and investment strategy. Only a few innovations will be blockbusters. Some will result in incremental changes, but that doesn't make them any less important.

One of Zappos’ core values is to embrace and drive change. “We are ever evolving. If we want to continue to stay ahead of our competition, we must continually change and keep them guessing. They can copy our images, our shipping, and the overall look of our web site, but they cannot copy our people, our culture, or our service. As long as embracing constant change is a part of our culture, they will not be able to evolve as fast as we can.”

Let be change part of your 2014 goals. The more you welcome change, the more opportunities will arise.

What are you doing to embrace change? How does your company master change?

10 reasons why you must attend the Day of Innovation conference!

Day of Innovation - August 28 - Indianapolis, IN

10. “Either you choose to innovate or to commoditize” - Charlie McTargett, 2013 Day of Innovation keynote speaker and VP Product Development at Delta Faucet.

9. Network with others who share an innovation mindset.

8. Event you don’t want to miss because everybody is going to talk about it.

7. Challenge the status quo in your organization and learn from Indiana’s innovation thought leaders.

6. Educate your employees about innovation at a low cost (only $200 compared to other conferences of $1000+).

5. Because we don’t believe in the conventional way of thinking, our panel will bring an espresso shot of disruption to challenge the status quo. Expect (good) chaos.

4. Learn how to be innovative well beyond product development: marketing, customer experience, future planning, competitive intelligence, company culture, mindset.

3. Your competitors have already registered. What are you waiting for?

2. This will change the way you think about innovation in your organization.

1. Expose yourself to new perspectives you’ve not considered before.

Register now!

People who kill innovation

I have a firm belief that to stay relevant and be successful in this ever-changing, ultra-competitive, whacky world, we actually need to upgrade the way we think on a permanent basis. To think the same as we always have is to fall behind. The things that used to make us successful no longer work, your old thinking is now taken for granted, and our problem-solving abilities are now commoditized or digitized.

In a recent post, I discussed how organizations fail to innovate, and it very often starts with the (bad) people in place, starting from the top of the org chart.

In a December 18 article, Stefan Lindegaard defines 5 types of people who kill innovation.

Here is my list (non-exhaustive) of people of kill innovation.

Disclaimer: All characters appearing in this work are fictitious. Any resemblance to real persons, living or dead, is purely coincidental. BULLSH#T! THEY REALLY EXIST!!

1. Executives who sell innovation to their employees like a car sales person sells a Humvee to a potential buyer trying to convince him it offers the best gas mileage. If a leader is not genuine in his intention to create a true culture of innovation, employees won’t buy into it. They are not stupid.

2. Incompetent “innovation” directors who kill their employees’ creativity and will to innovate because their ideas don’t fit in the “mold”. Hmm… it reminds me of my French literature teacher who used to give me bad grades because I had a different interpretation of a book from hers. Such directors are supposed to encourage innovation within their team, not to teach their team how to think like them. Fu#k it up! (read: funk it up).

3. Executives who want to hire employees with “an entrepreneurial spirit”, but don’t let those same employees experiment business ventures and innovation inside or outside of the company. How are such employees supposed to boost their entrepreneurial spirit if their attempts are shut down?

4. Managers who steal ideas from their team to make those ideas their “own”, transforming concepts to fit their “narrow” views, thus disengaging the very ones who came up with innovative ideas.

5. Formal or informal “leaders” who are put in place because of their “special” connections to the exec team (yeah, many companies still encourage boot lickers), discouraging the willing employees to come forward with ideas.

6. The “narrow-minded” people who only focus on what they can benefit from participating and miss the big picture.

7. Execs who are so afraid of open innovation and bringing outside thinkers that they still live in the stone age when Neanderthals protected fire from their enemies, fearing they would lose the “fire” (to innovate) they have in them.

8. YOU, if you are soooo comfortable in your sleepers that you refuse to grab the remote control and switch the channel to challenge the status quo. If you are afraid to fail, you will never move forward. You must upgrade your thinking. A quote of my kids’ favorite movie (Ratatouille): Gusteau “If you focus on what you left behind you will never see what lies ahead!”.


Conclusion: Steve Jobs’ quote “the crazy ones”
Here's to the crazy ones. The misfits. The rebels. The trouble-makers. The round pegs in the square holes. The ones who see things differently. They're not fond of rules and they have no respect for the status quo. You can quote them, disagree with them, glorify them. About the only thing you can't do is ignore them, because they change things. They push the human race forward. While some may see them as crazy ones, we see genius. Because the people who are crazy enough to think they can change the world are the ones who do.

Share your experiences. Who do you see as innovation killers?

 

To win or not to lose? The power of loss aversion

Because we feel the disadvantages of risky decisions (losses) more intensely than the advantages (gains or wins), we see risky moves as bad ideas. Opportunities that are forecast with certainty seem especially tempting since they are risk-free.
In a previous blog, I spoke about how we need to upgrade our thinking, how we must funk up the way we think.

In his LinkedIn post titled “The Power of Loss Aversion”, Cass Sunstein explains that “people dislike losses more than they like equivalent gains”. To illustrate his point, he talks about incentives programs for teachers to improve their student’s achievements. Unfortunately, many of these efforts have been vain. In an ingenious study, teachers were given money in advance and told that if their students did not show real improvements, they would have to give it back. The result? A big improvement in teacher quality, as measured by a significant increase in students’ math scores.

Here are some common behaviors people around us (if not ourselves) experience:

- holding onto a losing stock investment
- keeping a home with a mortgage substantially above its market value
- going to an event you don’t really want to attend because you have already paid for the tickets.

Because gains are fleeting and losses linger, people behave irrationally to avoid loss.

How can you leverage the power of “loss of aversion” to grow your business, motivate your people and increase sales?

When you promote the benefits of your products or services, frame your message towards loss prevention. If you pitch a product to a potential buyer that is designed to increase revenue, don’t just state the obvious benefit such as: “if you use our product X, you can expect your sales to rise by $120K annually”. Instead, remind your buyer that he would face losses from not using your product: “every month that product X is not used, you leave $10K on the table. This is money left that will not be recovered. You will lose money month after month. Can you really afford losing $10K a month?” Switching the message around to remind your buyers that they face losses from not using the product is a much more powerful message than just promoting the gains.

If your business sells products or services directly to consumers, leverage scarcity. Scarcity, one of Cialdini’s “weapons of influence,” is powerful because it represents a loss of freedom. If you are selling a product, promote its limited quantity, retire products early on a constant basis and introduce new products. Put an expiration date on your offer – car dealerships excel at this by pressing potential buyers to accept this one-time deal that may not be available if they shop around and come back two days later. If you are planning an event, make sure you mention the limited seating. Or perhaps you can offer early bird tickets, which gives you the opportunity to market to people’s loss aversion multiple times: once when tickets are announced, once when the early bird discounts are expiring and then just before ticket sales end.

When you define your pricing strategy, focus on the fear of losing money. Retailers who sell home appliances understand this very well. They offer a one-year warranty on a $1000 flat screen plasma or a $2500 refrigerator, reminding customers that after 12 months they are not covered but that they can extend the warranty by paying $200. What do customers do? They pay $200 extra in fear of losing their $1000 purchase, of the (very small) probabilities that their plasma or refrigerator will have some technical issues 3-5 years down the road when the extended warranty is over.

The same could apply to buying insurance, or flat-rate plans for mobile phones, etc. Consumers prefer to pay monthly fees of $40 to protect themselves for potential losses as well as variability of costs for their phone bills, instead of taking the risk to pay $20 a month and $60 another month. They are afraid of paying more, rather than seeing the benefits of paying on actual usage.When you formulate pricing strategies for your different offerings and services, do not forget to utilize the power of loss aversion with your buyers. A dollar gained and a dollar lost might equal zero on a pure economic basis, but it causes great pain to most buyers when behavioral economics is factored in. Buyers will generally pay more to eliminate this pain if your pricing strategy is framed correctly. Ignoring this powerful pricing tool means money left on the table and gone forever... and we all know how painful that can be.

Another principle is the theory of the foot in the door, or the tactic that involves getting a person to agree to a large request by first setting them up by having that person agree to a modest request. You want to create “ownership.” Loss of money (and the freedom of choice that comes with it) can be a barrier to people buying your products or services. However, once they’ve taken ownership of something it’s difficult to give that up. To illustrate, think of the various websites or publications which offer a free 30-day trial period. This is very effective when they require customers’ credit card information up front while allowing them to opt-out within the trial period (most surprisingly, most don’t opt-out simply because they already have a foot in the door). When you sell a product, think about this tactic. You can also easily apply this tactic to motivate your team by asking a small commitment which will lead to a bigger commitment. Imagine you apply the study described above with teachers to your employees… Let’s say you have a profit-sharing plan where your company gives a 10% bonus to your employees if all company goals are met. This is a nice incentive, but how can you be sure your employees give it all? How would it be different if you deposited at the beginning of the year a 10% bonus in their bank account (bonus would be frozen), and that they would have to give it back at the end of the year if your company does not meet its goals?

Power of loss aversion in your day-to-day communication. PR firms know a great deal of leveraging the power of loss aversion when reporting news or financial results. If you have more than one piece of bad news (or losses) to report, bundle up your bad news into one single statement. If you spread out the divulgation of bad news or losses across multiple announcements, you multiply its negative impact. The pain of losing $40 dollars at one time is less painful that losing $20 in two separate instances.On the opposite, when you have multiple pieces of good news to report, you are better off spreading them across several announcements, as people experience greater satisfaction gaining two times $20 versus $40 one time only. When you have a mix of good and bad news to report, try to mix small losses with big gains, but separate your small gains from bigger losses.

In conclusion, while you cannot model your business decisions solely based on the power of loss aversion, the opportunities abound where inclusion of these basic principles can be highly advantageous. You must upgrade the way you think in order to seek gains and put the fear of losing and failing behind you.

Join The Resistance Against The Status Quo

Tired of hearing the same old adage "we've always done it this way" which leads to nowhere but the status quo? At Centric, we are tired of it!

Join the resistance against the status quo at Indianapolis' Day of Innovation conference on August 28.

Innovation is not just about launching a brand new product on the market. It is a mindset that leads to the implementation of ideas.

Day of Innovation will feature keynote speaker Jeff Baxter, co-founder of Steely Dan and lead-guitarist of the Doobie Brother. Baxter is now a consultant for the Pentagon on counter-terrorism. He will teach the audience how to think non-linear in a linear world.

Speaking of (national) security, companies must keep an (innovative) eye on this matter. Jeremy Morton and Tom Baldwin, two executives at Stanley Security, will share with us how to keep abreast of change and remain the industry leader in innovation.

Doug Boles, President of the Indianapolis Motor Speedway, will talk about the future of one of the most iconic sports venues in the world, host of the Indianapolis 500.

You can be innovative in marketing in one of the oldest sports in the world... soccer. Peter Wilt from Indy Eleven, Indianapolis' new NASL professional soccer team, will share with us how his team developed an innovative grass-roots and non conventional marketing campaign to defeat all odds and sell record season tickets.

You can be a product or device focused company but still genuinely care about your end users, in Roche's case, their patients. Laura Spiegel will tell the story of Roche's LifeMap Experience to say "no" to the status quo in Diabetes care.
Want to discover Google's behind-the-scene culture of innovation? We won't bring Vince Vaughn or Owen Wilson (they are not available, sorry!), but we'll have a true Xoogler (read: ex-Googler) - Joe Van Deman -  to share some secrets.

Because we don't believe in the conventional way of thinking, our panel will bring a espresso shot of disruption to challenge the status quo. Expect (good) chaos!

Finally, Day of Innovation will celebrate Indiana's most innovative organizations with the Indiana Innovation Awards ceremony.

Join the resistance against the status quo!

Unhappy employees are bad for your business

According to data compiled by Bolt Insurance, a whopping 80 percent of employees are dissatisfied with their jobs in some way. And when that dissatisfaction gets so high that employees jump ship, it can cost an average of one fifth of the employee's salary to find a replacement, not to mention the loss in productivity.

This infographic shows the industries with the highest turnover rates and what businesses can do to keep their employees more engaged in their work.

To me, beyond the monetary cost to replace an employee who has left the company, the disastrous and non-quantifiable consequences of unhappy employees are essentially a loss in productivity, a poor delivery of customer/brand experience, and ultimately a loss in the inner innovation power of the organization.

According to an analysis conducted by the Gallup Organization disengaged employees cost the American economy up to $350 billion a year due to lost productivity, because they are the lowest performing. To put it simply, if there had been engaged workers in those positions, they could have been far more productive.
Employee unhappiness can drag a company's image down. Take the example of Walmart. I guess it depends on the person, but I think that we can all agree that in general - perhaps with the exception of the elderly greeters - most Walmart employees don't seem particularly passionate about their jobs. I don't think I'm being unfair by saying that. Some even seem to really, really, really hate their job. I'm not judging, and I am not saying that Walmart employees should act as happy as Starbucks baristas... I can't help but wonder why they don't. Does Starbucks pay that much better than Walmart? Is serving coffee all day that much more fun than stocking or scanning stuff? Is there really that much of a difference? Is it just that working at Starbucks is cool but working at Walmart isn't? Are a person's identity and sense of self worth tied-in with the image of the company they work for? (If Starbucks is cool, then working at Starbucks makes me cool? If Walmart sucks, then working for Walmart means I suck?) Maybe, I don’t know for sure. I guess I could see a little kid wanting to grow up to be a barista: they make coffee, the coffee makes people happy, so it isn't a bad job. I don't know too many kids who would ever find working register 12 at Walmart fun or cool or rewarding.

Obviously, Walmart has an image problem, and the entire company's identity may be caught in a self-perpetuating vicious cycle of substandard customer-to-brand experiences.
Unhappy employees can turn even the best companies into "have beens". In contrast, happy employees can turn even the most average companies into worthy lovebrands.
Ask yourself: Do you feel special when you buy a cup of coffee at Starbucks? Do you feel special when you buy a BMW or an Apple computer? Do Starbucks, BMW and Apple employees play any role in that?

Do you feel special when you buy something at Walmart?

Do those companies' employees play any role in that? Do you think that those employees' sense of worth relative to their jobs has anything to do with how happy or unhappy they are to work there?

What can businesses do to address the problem? 

In his book Delivering Happiness, Tony Hsieh wrote about the practice of paying some employees $2,000 to quit Zappos. Though this policy may seem bizarre to some, it very likely winds up saving an organization money by preventing some of the negative outcomes mentioned above. If a very negative employee was allowed to continue acting out over a number of years, the cost to the organization in lost productivity could be much greater than $2,000.

Without being as extreme, Dave Lavinsky’s checklist to motivate employees is a very good resource.
As I wrote in a recent blog, a more a constructive approach is an engaged and empowered workforce.

How do you motivate your team? Share your experience with us.