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Can Innovation Be Scheduled?

15 Saturday Jun 2013

Posted by in Innovation

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innovations

In my post about entrepreneurs, I mentioned how they don’t just create something better they create something different. Creating something new and different is innovation. Many might think that most innovations come from a spark of insight or a flash of brilliance (which no doubt they do—as well as repurposed mistakes). But, what we may not understand is that you, I, and entire companies can approach innovation systematically.

  • The first requirement is that people be measured and rewarded to encourage them to value change—not resist it.
  • Second, management must understand how much innovation will be required to sustain the business over a given period—as well as how many of their current products/services will be obsoleted in the same timeframe.
  • Next, a systematic evaluation of the changes in trends, customers, and the environment must be undertaken.
  • At the same time it is imperative that company’s performance as an innovator be measured and that rewards, relationships, job assignments, structural changes, etc. be adjusted accordingly.
  • Innovations should lead to customers being better served or allow them to do something they were previously unable to do.

More important than this abbreviated list for creating systematic innovation is the fact that once an idea is identified, people need to go to work. The old adage that (art, genius, success) is 10% inspiration and 90% perspiration certainly applies.

Jim

Lucavìa
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lucavia.com
(925) 980-7871

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Reverse Showrooming

14 Friday Jun 2013

Posted by in Customers, Innovation

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myrunway-logo-icon

There are endless communities of people who gather on line and in person to exchange ideas and socialize. One of the most popular ways to participate in these communities is through meetup.com. I recently attended a meetup held in Palo Alto at SAP, hosted by First Thursday Silicon Valley Marketing Professionals. In my experience, nowadays the word “marketing” usually refers to ways of using the Internet to get customers to engage with brands—in other words, promotion and sales. Be that as it may, and completely by surprise, I learned about an intriguing new SAP social app called My Runway that evening. Rather than a product review, I’m taking a look at SAP’s My Runway from the point of view of innovation.

In an earlier post, I discussed how entrepreneurs don’t innovate by just creating something better; they create something different. My Runway is hardly alone in the space serving up social fashion apps. Nonetheless, these apps are doing something very innovative, they’re turning the tables on the trend toward showrooming. I wouldn’t be surprised if you’ve showroomed at least once, that is, you went into a bricks-and-mortar business to see, touch, or try on a product that you ended up purchasing on line. My Runway turns this behavior upside down by letting its community follow, fav, and wishlist products from their favorite brands and direct them locally to where in-store purchases can be made at the moment.

By taking responsibility for their customers’ total experience SAP, well known for backend ERP software, gained a valuable insight. Had they concentrated solely on the past, SAP would never have looked at ways to help their customers’ customers on the frontend. Instead, with My Runway, they not only help their customers build great products, they help them sell-through to an engaged online community.

Jim

Lucavìa
gojimlucas@lucavia.com
lucavia.com
(925) 980-7871

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What Entrepreneurs Do

14 Friday Jun 2013

Posted by in Innovation, Management

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Containers

Most start up and small business people call themselves entrepreneurs. But how many understand the term and the power it unleashes?

In 1803 French economist, J. B. Say, coined the term entrepreneur, “The entrepreneur shifts economic resources out of an area of lower and into an area of higher productivity and greater yield.” In 1986 Peter Drucker formulated this theory. First, entrepreneurship sees change as normal and healthy. Second, it does something different than what is already being done. Notice it’s not just about doing something better but doing something different.

By this measure, entrepreneurs make up a minority of new businesses and those who are entrepreneurs understand what is expected of them: To create something different.

Popular culture expects this something to be a visible object, like an iPod, for example. But it can easily be argued the iPod is the direct descendant of Sony’s true innovation the “pocket-able radio.” What was really different about the iPod was iTunes—that’s what completely disrupted the music distribution business. Similarly, forgive us for thinking that Facebook created a breakthrough in the way people engage in relationships. In fact, what they’re doing is turning their users into the product they sell to their real customers: Advertisers.

Entrepreneurs often innovate in unseen ways. They standardize a product, systematize a process, redefine what the customer considers value, change a procedure, recombine things, improve the yield from resources, or change the way resources are used. One of my favorite innovations, cited by Drucker, was the establishment of the entrepreneurial bank by Crédit Mobilier. They were the first to use other people’s money to finance large projects rather than using their own.

So, if you’re starting a new company I hope you do well. If you’re an aspiring entrepreneur, you’d do well to understand what’s expected.

Jim

Lucavìa
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(925) 980-7871

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Two Lessons for Every Entrepreneur

14 Friday Jun 2013

Posted by in Customers, Innovation, Management

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Bassett Ears

In the 1700’s Edmund Burke said something you’ve heard many times, “Those who don’t know history are doomed to repeat it.” In my opinion, much of the business press exists to exploit the fact that we learn important lessons—and then quickly forget them. Much is known about management, entrepreneurism, innovation, etc. but we somehow forget in our pursuit of the latest meme or in our rush to be busy instead of creating results.

In the 1800’s J.B. Say defined the entrepreneur as “…Shifting economic resources out of an area of lower and into an area of higher productivity and greater yield.” Starting in 1939, over seven decades, Peter F. Drucker became the most influential management writer and thinker of all time as he codified the practice of management in over 30 books. And yet, we have an insatiable appetite for relearning what we already know.

In my local Sunday paper two articles caught my eye. One quoted Paul Santinelli of North Bridge Venture Partners. When asked the biggest mistake entrepreneurs make he answered, “…I was always enamored with what we were building…Had I listened to our VP of sales and realized, ‘Hey, the market doesn’t want X, they want Y and are willing to pay for it,’ I might have been able to move faster to a more acceptable solution.” In the other article, Curtis Carlson CEO of SRI, a company well known for sustained innovation, says he, “…Preaches, literally to every SRI employee [that]…each researcher must be able to explain the need s/he is trying to fill, why a new method would be better than what’s already available, and what benefit the new idea would bring to a potential customer.”

So, no matter where or when you learn it the two top lessons for entrepreneurs are:

  • Listen to your customers.
  • Discover what they need.

Jim

Lucavìa
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lucavia.com
(925) 980-7871

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The Loop of Virtue!

14 Friday Jun 2013

Posted by in Developing talent, Management, Shared values

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Mobius

Think of an action movie where our hero is inside a large unfamiliar building trying to find and free a hostage. Meanwhile, there is a super-geek outside (with an amazing array of integrated systems, btw) guiding her through a maze of hallways, elevator shafts, and HVAC ducts as she karate-chops her way toward the prize and past the bad guys. That is, until her earpiece fails. Agghh!

In an earlier post I wrote how workers need feedback from management (coaches) in order to understand their current performance and how to improve it. Without feedback, our hero may eventually achieve the objective but the level of risk is too high and it certainly isn’t sustainable. Yes, she needs to be free to apply her expertise, improvise, and follow through but she also needs someone on the outside to add perspective and context and ensure she gets timely, relevant, and actionable information.

A feedback system must be integrated into the management/worker relationship and it doesn’t have to be complex to be effective. Workers don’t want to be in a “If you don’t know, I’m not going to tell you,” situation. Give them the information they need, tell them how they’re doing compared to others and other groups, and give them the chance to develop new knowledge to do their work. Here’s a loop you can adopt today.

ANNUALLY

  • Formally assess performance from the prior year.
  • Discuss the current company business plans for context and purpose.
  • Revise the job description together.
  • Ask the worker to set goals that you will review, discuss, and finalize together.

QUARTERLY

  • Assess progress against goals from the prior quarter.
  • Revise and adjust.
  • Create and sequence goals for the current quarter.

MONTHLY or WEEKLY

  • Meet 1:1 periodically (frequency based on the need of the worker and the work).
  • Revise and adjust.

DAILY/FREQUENTLY

Nowadays I don’t hear about management-by-walking-around. MBWA is a powerful management tool that creates a dialogue. It shouldn’t be a “Caught you being good/bad” thing but, rather, a sign of a persistent and productive relationship with an endless loop of information, knowledge, and ideas.

Jim

Lucavìa
gojimlucas@lucavia.com
lucavia.com
(925) 980-7871

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© Copyright Jim Lucas 2007-2013 All Rights Reserved

The Golden Rule

14 Friday Jun 2013

Posted by in Management, Shared values

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trust1

Ethics, or moral principles, can be defined as, “Accepted rules of conduct by an individual or group.” We’ve heard the Golden Rule which urges, “Treat others the way you would like to be treated.” I wouldn’t be surprised if everyone believes in that. At its core, ethics urge us to do the right thing and avoid the wrong thing so each individual, and group, may improve.

Ethics exist in businesses too. Conducting business in an ethical way improves both individuals and groups—and, in turn, improves the way customers, suppliers, partners, and others see us. A super-simple ethical test is to ask these questions:

  • Is it legal?
  • Is it fair?
  • Is it right?

Shaping your business decisions by the answers to these questions increases the trust of employees, customers, and partners alike and directly strengthens brands.

Values can be defined as, “Principles, standards, ideals, or judgments of worth, held by an individual or group that have a certain weight in the choice of action.” When we have a choice to make—especially a difficult one—we consider what is most important to us. For example, when buying a car if we value safety over cost we might select the side airbags. If, on the other hand, we value ecology over luxury we might buy a hybrid instead of an SUV. If we value self-reliance it may shape how soon, or if, we ask others for help. If we value teamwork we may start our projects involving others from the outset, rather than bringing them in half way along, etc.

So, my question is this. If you happen to agree—and I doubt I’m provoking much controversy—when was the last time you specifically probed job candidates to understand their business ethics and personal or business values? Or, when you formed the strategy for your business, did you spell out the values that will guide you? When was your last “All hands” meeting where ethics and values were discussed?

Just sayin’…

Jim

Lucavìa
gojimlucas@lucavia.com
lucavia.com
(925) 980-7871

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Rotten Carrot, Broken Stick

13 Thursday Jun 2013

Posted by in Developing talent, Effectiveness, Management

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Carrot and stick

Recently, I spent my lunch listening to a good friend describe the hell his boss has created at work. I’ve heard countless stories like his—and I’ve told a few myself. Why do some managers still think they can manage through intimidation and fear? Ignorance is the only answer because correct management practices have been documented since, at least, the 1940’s.

Just before your grandparents were born, maybe your great grandparents, most people lived on the margin. Today we think about the hungry and the homeless. But, not long ago most people were in agriculture and their very survival depended on the annual harvest. One missed crop and entire families, sometimes for generations, were fated to abject poverty. When people started migrating to cities to work in factories and organizations, hunger and fear was a potent motivator—and a few more cents per hour was life altering.

But, for some time now the carrot and stick hasn’t worked—in fact it is counterproductive. On the stick side: if you lose your job nowadays you will be mildly, perhaps greatly, upset. It won’t be comfortable and the consequences may be significant. However, you will not starve. So, intimidation just makes workers mad. On the carrot side: we know that it takes a huge amount of money (or %) in modern society to be more than a temporary motivator. The number is so large it isn’t economically feasible to entice workers to better long-term performance using money.

Effective managers understand the great majority of workers want one thing more than anything else: achievement. And, they understand their job is to create the right environment. I’ve explored that environment especially here and here.

Additionally, it is the manager’s job to put process controls in place, create opportunities for continuous learning, involve workers in evolving their own jobs, ensure the organization actively supports their achievement, and makes sure their performance against high standards has consequences. These are the practices that are part of a healthy and high achieving culture. The carrot and stick are dead—it’s time they were buried.

Jim

Lucavìa
gojimlucas@lucavia.com
lucavia.com
(925) 980-7871

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© Copyright Jim Lucas 2007-2013 All Rights Reserved

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The Right Job for You

13 Thursday Jun 2013

Posted by in Concentrating effort, Management

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Jobs search

Do you know how to design the right jobs after creating an organization that reinforces and facilitates your focus on customers? Here are the raw materials, and how to combine them, to make sure every job creates maximum value.

Why: Losing contact with why your company exists, getting caught up in the what and how of everyday work life, is a natural trap. It’s an insidious problem second only to losing contact with customers. When you set out to write job descriptions, have your purpose, vision, and mission statements right next to you. Make sure the job you’re about to create has clear and immediate links to why your company exists and its future.

Customers: Every job needs to explicitly create value for customers. It must be plain that every job exists to impact customers, not to support or facilitate some thrice-removed internal process.

Information: As discussed earlier, the work input and output of today’s worker is information. Clearly describe the kinds information the job requires and the information it produces—thereby satisfying others in the organization.

Results/Standards/Measures: Just like resumes, you don’t want to see ones that describe responsibilities. You want to see accomplishments against high standards and the degree to which the results missed or exceeded the goals that were set.

Relationships: Every job is in relationship to others. Describe the social context of this job and the flows of information.

Your People: Workers who do the job are really the only ones who know what the job is and how to do it. Involve them as early as possible in the design and improvement of their jobs. This is especially important to adding the final element: contribution. That is, the specific benefits the individual hired for the job can uniquely provide.

Jim

Lucavìa
gojimlucas@lucavia.com
lucavia.com
(925) 980-7871

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© Copyright Jim Lucas 2007-2013 All Rights Reserved

Form Follows Function

13 Thursday Jun 2013

Posted by in Concentrating effort, Management

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Ideal Org Design

Being out of touch with customers is not an ailment that only afflicts mature organizations. It can happen to any company, any size, and at any stage. Sure, big company warning signs are easy; bloated departments, managers with one or two employees, endless meetings focused on internal—or worse yet—political issues. But startups aren’t immune either. Think about what you’re really hearing when the entrepreneur-next-door says something like, “We have zero competition,” or “We have built-in virality.” Equally ominous, is the claim, “We target everyone.”

There are a gazillion reasons why companies don’t establish proper contact, or lose touch, with their customers. One of the most overlooked causes I’ve seen is the way some organizations are designed. Whether unintentional or not, the organization itself can separate those on the inside (coworkers) from those on the outside (customers).

To avoid this I advocate three things in organizational design.

  1. Every employee should be no more than one degree of separation from the customer. This means they can get their hands on customer information directly or, with minimal assistance, be in direct conversation with customers.
  2. No employee has only internal customers. Treating your fellow employees the way you would treat your best customer is a powerful metaphor but it doesn’t substitute for actual outside customers. Everyone in the organization must feel personal responsibility for real customers.
  3. Executives, at all levels, should sponsor at least one outside customer. Like an air vent, a lasting relationship with even a single important customer is an invaluable conduit from the outside that continually refreshes the inside.

We already know that the business of running a business is complex and all consuming so let’s design customer contact into the structure of your business right from the beginning.

Jim

Lucavìa
gojimlucas@lucavia.com
lucavia.com
(925) 980-7871

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© Copyright Jim Lucas 2007-2013 All Rights Reserved

Perfect Pitch

13 Thursday Jun 2013

Posted by in Innovation

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Tuning fork

I’ve been researching how modest startups in Silicon Valley pitch their ventures. It doesn’t take long to discover the ecosystem that supports entrepreneurs to speed pitch their ideas in group settings. Here are my early takeaways on effective presentations.

DURATION. You can literally pitch several times a week in the Valley. There is a wide range of event management styles so, depending on the event, you might only get 30 seconds when you were promised 1 or 2 minutes. Just be prepared.

NARRATIVE. Your story needs a beginning, middle, and end. Open strongly and finish with a flourish.

EMOTION. Make sure you coat your pitch with emotion even if 90% of your content is left-brained.

BUZZ AND HYPE. There’s a strong aversion to buzzwords and superlatives. Use plain language. Go here for more on this. If you just can’t help yourself, the jargon you do use better be correct and in the right context.

THEIR MONEY. Remember, an investor considers whether to move their money from somewhere and reallocate it to you. Never underestimate how interested they are in their money. Explain how you’ll be able to scale up to a business big enough they’ll care about.

WHAT/WHY/WHO. Clearly describe what your company does, why you’re doing it, and who you serve. Don’t get so wound up that your audience, while seeing your obvious passion, can’t figure out the problem you’re solving. If your product is new be sure to describe or demo how it works.

REPLACES/IMPROVES/COMPETITION. Describe what you’re replacing or improving. Even if your idea is easy to understand, use examples or anecdotes to create a clear picture. If your idea seems like a stretch—or if it’s old—expect to hear about it on the spot.

BUSINESS MODEL/SPECIAL. What makes you special/different/unique and how do you earn your money and manage your costs? In longer presentations, you’ll need to describe your finances to date and 3-5 years ahead.

$ OPPORTUNITY/SCALE. Know your total market size and the size of the segment you address. If you already have customers, talk about them. How will you acquire new customers and at what cost?

SITUATION/TEAM. Nothing you want to do is going to be easy. Who’s on your team and what’s in their track record to suggest you can make it happen? Where are you in your development cycle right now and what/when are your next few milestones?

THE ASK. Be clear about what you want. If it’s $1M, fine. If you’re just looking for a co-founder, make that clear too.

Jim

Lucavìa
gojimlucas@lucavia.com
lucavia.com
(925) 980-7871

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