Tag Archives: motorola

The Big Lesson From Amazon-Whole Foods

I doubt that Google and Microsoft ever worried about the prospect that a book retailer, Amazon, would come to lead one of their highest-growth markets: cloud services. And I doubt that Apple ever feared that Amazon’s Alexa would eat Apple’s Siri for lunch.

For that matter, the taxi industry couldn’t have imagined that a Silicon Valley startup would be its greatest threat, and AT&T and Verizon surely didn’t imagine that a social media company, Facebook, could become a dominant player in mobile telecommunications.

But this is the new nature of disruption: Disruptive competition comes out of nowhere. The incumbents aren’t ready for this and, as a result, the vast majority of today’s leading companies will likely become what toast—in a decade or less.

Note the march of Amazon. First it was bookstores, publishing and distribution, then cleaning supplies, electronics and assorted home goods. Now, Amazon is set to dominate all forms of retail as well as cloud services, electronic gadgetry and small-business lending. And the proposed acquisition of Whole Foods sees Amazon literally breaking the barriers between the digital and physical realms.

See also: Huge Opportunity in Today’s Uncertainty  

This is the type of disruption we will see in almost every industry over the next decade, as technologies advance and converge and turn the incumbents into toast. We have experienced the advances in our computing devices, with smartphones having greater computing power than yesterday’s supercomputers. Now, every technology with a computing base is advancing on an exponential curve—including sensors, artificial intelligence, robotics, synthetic biology and 3-D printing. And when technologies converge, they allow industries to encroach on one another.

Uber became a threat to the transportation industry by taking advantage of the advances in smartphones, GPS sensors and networks. Airbnb did the same to hotels by using these advancing technologies to connect people with lodging. Netflix’s ability to use internet connections put Blockbuster out of business. Facebook’s  WhatsApp and Microsoft’s Skype helped decimate the costs of texting and roaming, causing an estimated $386 billion loss to telecommunications companies from 2012 to 2018.

Similarly, having proven the viability of electric vehicles, Tesla is building batteries and solar technologies that could shake up the global energy industry.

Now, tech companies are building sensor devices that monitor health. With artificial intelligence, these will be able to provide better analysis of medical data than doctors can. Apple’s ResearchKit is gathering so much clinical-trial data that it could eventually upend the pharmaceutical industry by correlating the effectiveness and side effects of the medications we take.

As well, Google, Facebook, SpaceX and Oneweb are in a race to provide Wi-Fi internet access everywhere through drones, microsatellites and balloons. At first, they will use the telecom companies to provide their services; then they will turn the telecom companies into toast. The motivation of the technology industry is, after all, to have everyone online all the time. The industry’s business models are to monetize data rather than to charge cell, data or access fees. They will also end up disrupting electronic entertainment—and every other industry that deals with information.

The disruptions don’t happen within an industry, as business executives have been taught by gurus such as Clayton Christensen, author of management bible “The Innovator’s Dilemma”; rather, the disruptions come from where you would least expect them to. Christensen postulated that companies tend to ignore the markets most susceptible to disruptive innovations because these markets usually have very tight profit margins or are too small, leading competitors to start by providing lower-end products and then scale them up, or to go for niches in a market that the incumbent is ignoring. But the competition no longer comes from the lower end of a market; it comes from other, completely different industries.

The problem for incumbents, the market leaders, is that they aren’t ready for this disruption and are often in denial.

Because they have succeeded in the past, companies believe that they can succeed in the future, that old business models can support new products. Large companies are usually organized into divisions and functional silos, each with its own product development, sales, marketing, customer support and finance functions. Each division acts from self-interest and focuses on its own success; within a fortress that protects its ideas, it has its own leadership and culture. And employees focus on the problems of their own divisions or departments—not on those of the company. Too often, the divisions of a company consider their competitors to be the company’s other divisions; they can’t envisage new industries or see the threat from other industries.

This is why the majority of today’s leading companies are likely to go the way of Blockbuster, Motorola, Sears and Kodak, which were at the top of their game until their markets were disrupted, sending them toward oblivion.

See also: How to Respond to Industry Disruption  

Companies now have to be on a war footing. They need to learn about technology advances and see themselves as a technology startup in Silicon Valley would: as a juicy target for disruption. They have to realize that the threat may arise in any industry, with any new technology. Companies need all hands on board — with all divisions working together employing bold new thinking to find ways to reinvent themselves and defend themselves from the onslaught of new competition.

The choice that leaders face is to disrupt themselves—or to be disrupted.

We’re Being Luddites About Verification

There are several seminal moments when I first experienced something that forever changed the trajectory of my life:

–While senior director of research and development at ACORD in 1992, I worked with New Science, a research firm. The insurance industry was heavily investing in the development of AL3 batch data standards via point-to-point dial-up connections. New Science, however, was looking way down the path toward global, online, real-time transactions through a single network connection. Working with New Science was the first time I heard the word “internet.”

–I distinctly remember walking through the Indianapolis airport and seeing someone holding a “brick” next to his head. It was the first time I saw a mobile phone in operation, a Motorola Dynatic 8000X. Priced at $3,995 and weighing in at 28 ounces, the phone took roughly 10 hours to take on a full charge and offered only about 30 minutes of talk time on a highly limited analog network. Some of us remember running off airplanes to banks of payphones to check voice mail and to make calls between connections. Now it’s almost impossible even to find a pay phone.

–My first date with Mary Ann Hildebrand was Oct. 9, 1971. Game 1 of the 1971 World Series featured the Pittsburgh Pirates against our hometown favorites, the Baltimore Orioles. A week later, I held her hand and kissed her for the first time. And, after 41 years of marriage, the rest is history, as they say.

I also clearly remember listening to and meeting Thornton May in 1992 after his scathing commentary, “Luddism Looms Large,” appeared in ComputerWorld. It was the first time I heard the term “Luddite.” The term goes back to followers of Ned Ludd, the late 18th century British antitechnology leader who protested the replacement of human labor and skill with machines. Ludd energized a movement throughout the textile industry as his followers protested by destroying machines and property. Luddism today is a more general term for those who are opposed to technology change.

See also: Key to Digitizing Customer Experience  

When it comes to online verification, the insurance industry is filled with Luddites, compared with other industries. Every time an insurance policy or business relationships changes anywhere in the world, verification of insurance and compliance checking is required. This should happen digitally, right? In this day and age…. Instead, verification is delivered via a form, whether paper, fax or PDF.

All have the same problem: The information in them is as of a point in time. The information is locked, and the receiver can’t do anything with it.

Compare that with these industries:

  • To verify stock price information, you don’t have someone send you a form saying what it was last week or last month. You don’t even have to log onto the individual company websites, or have to go to the NYSE or NASDAQ. You just search for the company, and you see today’s price as it dynamically changes, in addition to historical pricing and a raft of other information.
  • To verify the status of a flight, you don’t have to log onto the individual airline websites. You just search for the airline and flight number and you see the schedule, if it’s on time in addition to city and gate information.
  • To verify my ability to pay, no one takes impressions of credit cards anymore. I do not show paper or PDF versions of my three-month-old credit card or bank statements to prove that I can pay. Nor does anyone take a picture of a check, my face and driver’s license. Someone I’m paying reads my card or check electronically, automatically verifying that funds are available.

I was reminded of this on my most recent speaking engagement. At 4 a.m., I arrived at my destination city. I stepped into a cab and was efficiently whisked away to my meeting location. Cabs no longer take a physical impression of my credit card. Instead, my card with an onboard chip was inserted, read and charged. Boom! Verified.

Unlike other industries that have online verification available, today’s convoluted and wildly expensive verification of insurance is a vortex of manual effort, paper, email, faxes and procedures. Data is both late and locked in certificate forms (paper or PDF). To begin getting our arms around the size of this opportunity, here are three sets of statistics to reflect on:

  • $1 trillion-plus of vehicle loans in the U.S. require verification at least once a year — twice a year if the policy is six months, and perhaps 12 times a year if the insured is paying monthly.
  • 1.2 million companies with 28.8 million commercial trucks and 3 million drivers provide forms as proof of insurance. How many do you think are out of date? Fraudulent?
  • 42.6 million independent contractors provide form-driven proof of insurance when they bid on a job.

Companies that receive data on forms have no assurance that the information is real or accurate or complies with their needs. Even with extensive and expensive manual checking, no one really knows if the data on the form is valid.

We have an expensive, lose-lose proposition.

Trying to fix the problem by addressing the form is like trying to fix cigarettes with a new type of cigarette. Problems with the underlying technology preclude a solution.

See also: Secret to Finding Top Technology Talent  

When a form-based proof/certificate of insurance is shared today, no one asks for a non-disclosure. There is also no password or encryption beyond the PDF format. Insurance rates, rules and forms are filed and approved by state agencies, which by nature make them available to the public. You can also go to web sites to search and view insurance carrier forms.

Insurance verification is not just at origination or signing of a contract. Insurance verification is continuous.

Once it goes on, it goes on and on.

Is This the Day the Data Died?

Who can forget Don McLean’s iconic “American Pie”? Released in 1971, it was a four-week No. 1 hit in the U.S. It is listed as the No. 5 song of the century by the Recording Industry Association of America (RIAA) and the National Endowment for the Arts. The original 16-page manuscript sold for $1.2 million last year.

For me, the most memorable line in the nearly 800-word, eight-and-a-half-minute song is: “The day the music died.” It marks Feb. 3, 1959, where there was a seismic shift in music. The senseless and untimely deaths of rock-and-roll legends Buddy Holly and the Big Bopper (J.P. Richardson) are interpreted in highly symbolic and blurry verbal pictures.

After the recent presidential election, the question before us is whether Tuesday, Nov. 8, 2016, will become known as “the day the data died.”

No matter your political or ideological viewpoint, no one predicted what happened at the polls. Even with mountains of data and 21st century technology, mainstream media and academia completely missed the mark — and not by a little. We now know that the data wasn’t just slightly off track; it was a couple of interstate exits away from reality.

See also: Some Things Are Too Important for Paper

To try to figure out where we in the insurance industry should go from here in terms of thinking about how to use data and of projecting trends, I revisited a number of new technologies that either did not live up to the hype or just never achieved the projected dominance. Here are some of my favorites and their potential insurtech applications:

Quadrophonic Sound

Debuting in 1971, it had four-track sound instead of a stereo’s two. And everyone knows more is always better. Quadrophonic sound was portrayed as not just sitting in front of musicians but sitting in the middle of them. I actually bought a quad system with four speakers and some tapes. The problem was that there are about a billion ways to produce recordings, and no single format was ever agreed on.

Implications for Insurtech

Standards are vitally important for insurance data exchange and widespread blockchain deployment and success. But, as a McKinsey report noted, the insurance industry is not known for its cooperation, its creation of standards, its adoption or its enforcement of standards.

The Segway

Steve Jobs said it would be bigger than the PC. Time magazine called it “reinventing the wheel.” Venture capitalist John Doerr (who backed Netscape and Amazon) said it would be bigger than the internet. Jeff Bezos spurred huge hype, saying the Segway “is one of the most famous and anticipated product introductions of all time.” With pre-orders from the National Park Service and the U.S. Postal Service and with more than $90 million in venture capital funds, the Segway’s inventor, Dean Kamen, said it would be to the car what “the car was to the horse and buggy.” All original 6,000 Segways were rapidly recalled because of customer injuries when the battery was low. While it has bounced back a little bit, the Segway never lived up to its hype.

Implications

If you Google “insurtech,” you get more than half a billion hits. With more than 800 insurtech startups and almost 150 deals worth $3.5 billion of investment since 2015, insurtech is a force to be reckoned with. There is more than enough hype to go around. Remember that just because an analyst, consultant or media outlet writes about a company or technology does not mean it is destined to take over the world — or even survive.

Microwave Ovens

Everyone reading these words probably just about blew a gasket when they saw microwave ovens on this list of technologies that have not lived up to their promise. With more than 100 million units shipped in the past 10 years, how could microwave ovens be declared a failure? Well, microwaves were originally advertised as the death knell of traditional ovens. It’s not that microwaves are a failure, per se, it is that they never lived up to the hype. More than three million traditional ovens are still being sold annually, with a full 33% increase in sales over the past five years. As microwave radiation (yes, radiation) is used to heat water inside of food, it cooks from the inside-out. While microwave ovens are great for popcorn and reheating, they still cannot brown or fry, nor are they terrific for baking. I once caused a minor event (a fire) at work when I reheated some chicken in the microwave. I had failed to notice that the paper wrapping from the grocery store where I bought the chicken was lined with foil. While the ensuing fireworks and smoke were entertaining, my coworkers were less than thrilled.

Implications

While I keep count of the number of times I’ve ridden Pirates of the Caribbean in Walt Disney World (42 as of this article), I have completely lost count of the number of times the death of the mainframe was pronounced with great fanfare and assurance. The tablet was supposed to replace the PC, but, like the microwave, it has become a complementary device. We all need to exercise patience and caution whenever the next “bright shiny object” is set forth.

Razor Phone

No, this is not a spelling error or an April Fools’ prank. Not only did someone actually think it was a good idea to combine two wildly different technologies in a single device, someone else approved and financed it. I find it hard to understand what a cell phone and electric razor have in common other than they are both battery powered and operate next to your face. Having a similar name to Motorola’s Razr phone turned out to create colossal confusion; the bottom line is that consumers were not at all attracted to this “cutting edge” device.

Implications

Putting together different technologies may make some sense or add value on the surface, but it may also have unintended consequences. I once worked for an insurance company that built a 40-story headquarters. It aggressively employed all the latest safety designs and technologies. One Monday morning, I woke up to discover that I could not go to work because of a significant fire on the fourth floor. It was later discovered that an office machine caught fire and burned undetected for about eight hours, causing considerable damage and disruption to the company. How could a fire burn that long without being detected, you may ask? The problem was the same as the Razr Phone: two technologies that seemed to make sense but had results that were problematic (at best). Smoke detectors were imbedded into the ventilation system and, to conserve electricity, the ventilation system had been turned off over the weekend, disabling the smoke detectors’ sensors. With no smoke detectors, the fire was allowed to burn until an overnight computer operator happened to open the door to the 25th floor stairway. With smoke billowing out, the operator manually pulled the fire alarm. One other note: With its reliance on all the latest technology and fire resistant materials, the building did not have sprinklers, much to the chagrin of the insurance company, the architect and city officials who approved the plans. A state-of-the-art sprinkler system was retrofitted, costing much more than if it had been installed during the original construction.

See also: The End of Leadership as We Know It?  

While no one should boast about the outcome of the recent elections, we all should question what is going on when it comes to the media and “the experts” who proudly boast they know the truth because they have the data.

In these cases, their feet were firmly planted in the air.

The Real Powerhouses in Silicon Valley

One of the most important lessons that Silicon Valley learned, that gives it a strategic advantage, is to think bigger than products and business models: It builds platforms.

The fastest-growing and most disruptive powerhouses in history — Google, Amazon, Uber, AirBnb and eBay—aren’t focused on selling products; they are building platforms.

The trend goes beyond tech.  Companies such as Walmart, Nike, John Deere, and GE are also building platforms for their industries. John Deere, for example, is building a hub for agricultural products.

Platforms are becoming increasingly important as all information becomes digitized; as everything becomes an information technology and entire industries get disrupted.

A platform isn’t a new concept; it is simply a way of building something that is open and inclusive and has a strategic focus. Think of the difference between a roadside store and a shopping center. The mall has many advantages in size and scale, and every store benefits from the marketing and promotion done by others.

See Also: Pursue Innovation or Transformation

They share infrastructure and costs. The mall owner could have tried to have it all by building one big store, but it would have missed out on the opportunities to collect rent from everyone and benefit from the diverse crowds that the tenants attract.

Platform businesses bring together producers and consumers in high-value exchanges in which the chief assets are information and interactions. These interactions are the creators of value, the sources of competitive advantage.

The power of platforms is explained in a new book, Platform Revolution: How Networked Markets are Transforming the Economy and How to Make Them Work for You, by Geoffrey Parker, Marshall Van Alstyne and Sangeet Choudary. The authors illustrate how Apple became the most profitable player in the mobile space with the iPhone by leveraging platforms.

As recently as 2007, Nokia, Samsung, Motorola, Sony Ericsson and LG collectively controlled 90% of the industry’s global profits. And then came the iPhone with its beautiful design and marketplaces — iTunes and the App store. With these, by 2015, the iPhone had grabbed 92% of global profits and left the others in the dust.

Nokia Shutterstock

Nokia and the others had classic strategic advantages that should have protected them: strong product differentiation, trusted brands, leading operating systems, excellent logistics, protective regulation, huge R&D budgets and massive scale.

But Apple imagined the iPhone and iOS as more than a product or a conduit for services. They were a way to connect participants in two-sided markets — app developers on one side and app users on the other.

These generated value for both groups and allowed Apple to charge a tax on each transaction. As the number of developers increased, so did the number of users. This created the “network effect” — a process in which the value snowballs as more production attracts more consumption and more consumption leads to more production.

By January 2015. the company’s App Store offered 1.4 million apps and had cumulatively generated $25 billion for developers.

Just as malls have linked consumers and merchants, newspapers have long linked subscribers and advertisers. What has changed is that technology has reduced the need to own infrastructure and assets and made it significantly cheaper to build and scale digital platforms.

Traditional businesses, called “pipelines” by Parker, Van Alstyne and Choudary, create value by controlling a linear series of processes. The inputs at one end of the value chain, materials provided by suppliers, undergo a series of transformations to make them worth more.

pipes

Apple’s handset business was a classic pipeline, but when combined with the App Store, the marketplace that connects developers with users, it became a platform. As a platform, it grew exponentially because of the network effects.

The authors say that the move from pipeline to platform involves three key shifts:

  1. From resource control to orchestration. In the pipeline world, the key assets are tangible — such as mines and real estate. With platforms, the value is in the intellectual property and community. The network generates the ideas and data — the most valuable of all assets in the digital economy.
  2. From internal optimization to external interaction. Pipeline businesses achieve efficiency by optimizing labor and processes. With platforms, the key is to facilitate greater interactions between producers and consumers. To improve effectiveness and efficiency, you must optimize the ecosystem itself.
  3. From the individual to the ecosystem. Rather than focusing on the value of a single customer as traditional businesses do, in the platform world it is all about expanding the total value of an expanding ecosystem in a circular, iterative and feedback-driven process. This means that the metrics for measuring success must themselves change.

But not every industry is ripe for platforms because the underlying technologies and regulations may not be there yet.

See Also: InsurTech: Golden Opportunity to Innovate

In a paper in Harvard Business Review on “transitional business platforms,” Kellogg School of Management professor Robert Wolcott illustrates the problems that Netflix founder Reed Hastings had in 1997 in building a platform.

Hastings had always wanted to provide on-demand video, but the technology infrastructure just wasn’t there when he needed it. So he started by building a DVDs-by-mail business — while he plotted a long-term strategy for today’s platform.

According to Wolcott, Uber has a strategic intent of providing self-driving cars, but while the technology evolves it is managing with human drivers. It has built a platform that enables rapid evolution as technologies, consumer behaviors and regulations change.

Building platforms requires a vision, but does not require predicting the future. What you need is to understand the opportunity to build the mall instead of the store and be flexible in how you get there. Remember that business models now triumph products—and platforms triumph business models.

innovation

Does Your Culture Embrace Innovation?

Why does it matter whether your organization embraces innovation by design? We are at the beginning of an era where the confluence of increasingly powerful computing capability, ease of starting a tech-intensive firm and massive data in a deeply networked world will drive more innovation more broadly than ever before. The rate of change and, indeed, the speed with which new incumbents enter markets and existing players fail will only increase. This means innovation must become part of a company’s fabric and its culture to ensure success.

Looking over the past 20 years to gain a better view of the next 20 years, there are three things that stand out, are surprising and are instructive.

  1. Science, geo-politics, sports, weather, information technology and cyber are all areas full of events that, a year or two before the “event,” prominent insiders would have said were not in the realm of possibility—they were not just unlikely but impossible, if not loony.
  2. While impressive, the huge growth and acceleration we have seen in information technology, social media, mobile, big data, several areas of science and cyber all exhibit patterns of the beginning of something—not a pattern of stability, maturation or, even, peaking. The amount of data, the amount of IP-enabled nodes and the throughput cost of computing could all scale 100 – 500 times in the next decade, making today just the beginning of a hockey-stick-like curve.
  3. The simple truth, threat and opportunity is that the rate of change is increasing across all areas of life while the scale of change is expanding.

What does all that mean? One thing is certain: Being agile is not enough. Those who effectively embrace innovation at an organizational (if not cultural) level will fare better than those who do not. Indeed, if this is the beginning of accelerating rates of change with massive outlier impacts, then driving innovation pragmatically across an organization is imperative.

See Also: Innovation Trends in 2016

If, from the top, the mission for everyone in an organization includes being innovative, this can become part of the fabric, the culture of the organization. Businesses that effectively embrace innovation at a cultural level will fare better than those that do not.

Still, there is a massive amount of fog surrounding the word “culture.” I often hear it is the insurmountable obstacle to innovation at scale and pace.

One Fortune 500 Example: Motorola

In the early 2000s, I was an officer with tech and business responsibilities at Motorola. The culture was largely internally focused, obsessed with continuous (often marginal) improvements, in love with engineering and intellectual property (IP) filings and not necessarily the monetization of IP. It was a family-oriented culture with, literally, generations of the family working at the firm. But the firm was failing.

The board brought in a new CEO from Silicon Valley, and we changed the company culture radically in 18 months. We did six simple things, instigated and championed by the new CEO:

  1. Clearly communicated a broad new mission about being externally focused, fast-paced, innovative and customer-centric
  2. Set out the behaviors that we expected and that the company would reward, as well as behaviors we would punish
  3. Continually “sold” (over-communicated) the rationale of why we were changing
  4. Made sure rewards and punishments were publicly meted out to support the new direction
  5. Matched structure to mission and talent to task; (when the game changes from soccer to rugby, not all team members have a role despite prior excellent performance)
  6. Eliminated active objectors and passive resistors who simulated support but were not rowing the boat (a third of the top 120 executives changed in about 12 months, mostly for this reason)

Motorola changed its culture and performance radically in 18 months. We released the breakthrough RAZR phone, which became the best-selling phone of all time. IT, for example, became a platform for tech breakthroughs and even had a venture arm for emerging tech.

Unfortunately, shortly after that, Apple made a thing called the iPhone, we made some very bad leadership talent decisions and we backed hardware over software in our largest business unit.

No amount of motivation or positive innovation culture will save you from a bad strategy that is married to poor talent decisions in key posts, compounded by groundbreaking, world-class competition.

Cultural obstacles

A well-communicated mission, backed up by clarity on what garners rewards and punishments, is key. The rewards and punishments must be broadly, consistently and continuously meted out for the behaviors that merit them. This will drive the behaviors in the organization. Lots of organizations get the reward part generally right, but they fail miserably on the punishment side, then wonder why they have cultural obstacles.

Done properly, rewards and punishments drive the behaviors inside your organization. The sum of those behaviors is your culture. 

Tips for building an innovation culture

Innovation must be about both big and small innovation, not just breakthroughs. Almost all organizations have an untapped wealth of innovation they can access by just eliminating the longstanding negativity that confront the rank and file daily. The front-line person in accounts payable and customer service or the distribution center in Managua may have process ideas that are innovative and high-impact for the whole organization.

See Also: Tech Innovation Is No Longer Optional

The simple question, “What really dumb stuff do we do around here?” in the right penalty-free environment usually unleashes a torrent. But without a culture of innovation, small, incremental, continuous improvements lie dormant.

Idea platforms and innovation/suggestion processes are all well and fine, but they should live inside an innovation culture where everyone thinks it’s part of their individual mission, with the underpinning or institutional agility and continuous improvement that goes with it. Again, you are not asking each person to reinvent Google, Facebook or the low-cost Fusion; you are rewarding them for innovative improvements.

To keep up with the changing external environment, an organization must be adaptable, agile, great at managing change and effective at the necessary but mundane underlying program management. An organization must also be deeply externally aware and manage emerging potential challenges, opportunities and threat profiles as far in advance as possible. No culture can remain innovative if it is internally focused and not connected purposefully to the outside world.

One simple approach to help instantiate innovation is to use “HLI” and that modern cultural artifact PowerPoint to drive innovation into the bedrock of the culture. I did this at several firms where PowerPoint was closer to an addiction than a facet of the culture. Quite simply, I insisted every program update, every group or function presentation, start with HLI.

  • H = Highlights: Show highlights of what the team did well. The real objective is to say “thanks” and acknowledge a mini win. Over time, teams start to think in terms of what they can put under ‘H’ on the front page. Accomplishment and recognition of accomplishment are necessary for a motivated environment.
  • L = Lowlights: Here you want to see some stretch, some failure. But, most of all, you want to see some learning and experimenting. By reviewing this without beating anyone up—maybe even praising the effort—you eliminate the fear. The message quickly goes through the organization that no one got killed for stretching or trying harder and occasionally dropping the ball. This also helps kill one of the most anti-innovation elements in business, the “under promise, over deliver” malaise.
  • I = Innovation: This is simply asking what you tried that was new, what you grabbed from phase two and did in phase one, what serial process you made parallel, what new method or tool you used, what you borrowed from prior efforts, etc.

If anyone shows up with a presentation that doesn’t lead with HLI, you politely cancel the meeting and get them to come back later. Over time, this creates activity inside teams so they can fill in the three sections. Teams start to have early conversations about how they are going to innovate, stretch and learn.

Innovation at scale requires change management 

There are many stories about the initial excitement of going big on innovation that are then followed by failure and disillusionment because the leadership attention waned as the novelty of the program passed and the hard work of change management, scaling and maintaining ensued.

I cannot talk about creating a culture of innovation without also teaching which change management models work best. It sounds obvious to say driving a culture of innovation is change-intensive, yet I almost never see a decent understanding of change management models and which one is most effective.

There are four basic management models:

  1. Edict
  2. Persuasion
  3. Participation (the communities of interest help define the change)
  4. Intervention (the sponsor justifies the need for change, monitors the process and communicates progress)

The change management model that has the highest frequency of success is intervention. It is at least twice as effective as the next-best model. It requires active leadership to continually “sell” the vision or plan, even while executing it. Understanding how that works and making sure everyone understands and follows the changed playbook are topics for a later article.

Suffice it to say, if you were to map the change processes at most firms, they often resemble spaghetti–an inefficient, unintended, sub-optimized maze. The majority of large tech-intensive programs are late, over budget, deliver less than promised or all of the above. Most companies have never mapped their processes and assume all is well.

Bottom line

Creating a culture of innovation inside a supporting ecosystem with a modicum of useful tools and the right leadership can lead to great success. Innovation is a pragmatic, broad-based journey, not a fad-centric exercise. Done well, innovation is the key to being effectively agile, and it is a concrete force multiplier. It very well may be the only sustainable competitive advantage over the next decade.

Do you have a culture that can innovate broadly, or do you have a silo-ed innovation team or champion or campaign?