Brian Lazar

A. G. Lafley (Take an External Viewpoint)

If you ask people within Procter & Gamble the most important thing innovation master A. G. Lafley imprinted on the company during his decade as leader, odds are they will respond with, “The consumer is boss.” Lafley used this mantra to urge P&G to get out into the market to understand current and prospective customers in more depth, to understand not just what they were saying, but also what they were feeling or unable to articulate. Lafley’s face on the Mount Rushmore of Innovation reminds us to always take an external viewpoint that draws inspiration from outside sources.

The most obvious way in which an external viewpoint is valuable is in the identification of opportunities. Companies often look for opportunities by saying something along the lines of, “We have these things to sell. Who wants to buy them?” An externally oriented company starts by saying, “What does the customer want or need?” Innovation master Peter Drucker explained the wisdom of this external orientation when he noted, “The customer rarely buys what the business thinks it sells him … Nobody pays for a ‘product.’ What is paid for is satisfaction.” A company might think it sells products or provides services, but the customer doesn’t look at the world that way. The customer has a problem to solve or a job to get done.

Spotting problems not yet solved or jobs not yet done requires looking at the situation from the outside in. Spending time with your target—whether that target is a current customer, a prospective one, your spouse, a trouble-causing co-worker, or a backyard bully—is the best way to develop the empathy that can allow you to understand what the person says he or she wants and needs and, even more importantly, what the person actually wants and needs but can’t easily articulate.

This externally derived empathy also helps to avoid common innovation mistakes. Innovators often think that their personal preferences overlap with their customers’ preferences. Or they think the hardest things to do are what customers will value most. The customer might very well prefer something simple and affordable over more complex but higher-performing solutions, or might be seeking performance along a dimension that doesn’t matter to you. Just think of how Nintendo succeeded in the video game industry with its easy-to-use Wii console, or the millions of hours people spend playing Candy Crush or Pokémon Go on their smartphones. There are always customers looking for bleeding-edge performance, but many prefer easy-to-use solutions.

An external viewpoint helps with two additional innovation challenges: formulating compelling new ideas and choosing between alternatives with uncertain outcomes.

Formulating ideas: Just as innovation master Michael Mauboussin draws lessons from science and psychology for investing, good innovators look for inspiration in nonobvious places. They seek intersections, situations in which people can bring fresh perspectives to old problems. Remember the guidance from the great artist Pablo Picasso: “Good artists copy, great artists steal.”

Choosing between uncertain alternatives: Consider the CEO picking between several bold growth strategies, the twenty-eight-year-old consultant considering a career change, or the marketing manager debating whether to invest in Facebook, Twitter, or another emerging marketing channel. The complexity of choices can force many people to freeze or to get stuck in loops of endless analysis.¹ But you can’t know for sure until you try. An external bias means that you actively experiment to see what works and what doesn’t work. Instead of making decisions based on analysis of ideas, you make decisions based on analysis of actions.

Mike Tyson (Recognize That You Are Wrong)

I’ve seen too many innovators work tirelessly to develop the perfect plan. The end product of these efforts is often a thick binder that has good “thunk” value.² The binder has it all—industry analysis, financial forecast, profiles on current and would-be competitors, detailed roadmaps for next-generation products, illustrations, figures, embedded videos—and more!

The thinking that goes into those heavy stacks is valuable—it often leads to a more robust understanding of the industry that the innovator is targeting and what really is required for success. However, the last time I checked, banks don’t accept “thunks” as legal currency.

One of history’s most well-respected military strategists, Helmut von Moltke (the elder), was a Prussian general in the mid-nineteenth century.³ The general believed in the value of detailed battle plans, but also said something that roughly translates to “no plan ever survived first contact with the battlefield.” He knew that a military strategist had to be ready to change course once the battlefield revealed the weakness in his plan.

But instead of chiseling von Moltke on the Mount Rushmore of Innovation, I put the famous boxer Mike Tyson for his memorable line: “Everybody has a plan, until they get punched in the face.” Like it or not, if you are innovating, you are going to get punched in the face. No business plan survives first contact with the market. Innovators should start by assuming that their plans are partly right and partly wrong. The plan itself doesn’t separate the winners from the losers. The reaction to adversity, the way in which you pivot (to use innovation master Steve Blank’s language) is what separates the winners from the losers.

It’s pretty liberating to recognize that there is no perfect plan. It also drives four strategic shifts:

1. Rethink the resources you throw behind an idea. It doesn’t make sense to invest huge amounts of money behind an idea that probably has fatal flaws.
2. Change your planning approach. Once you recognize you are going to be wrong, it’s easy to embrace what innovation master Rita McGrath calls a discovery-driven plan. The basics of discovery-driven planning are straightforward. As described earlier, you start by asserting your answer, then work backward to identify what needs to be true for that answer to be viable. Identify the critical assumptions, and then design and execute activities to learn more about those assumptions.
3. Develop a “portfolio” mind-set. No matter how much you might wish differently, there is a chance that your brilliant idea will turn out to be not so brilliant. So what’s Plan B or Plan C? What else might you do to solve the problem facing you or your customer? If you are a leader, what happens if two-thirds of the things your organization is working on don’t pan out? Make sure you have a backup option.
4. Change how you measure innovators. Most companies assess performance on the basis of an individual’s results. But if an innovative idea is by necessity flawed in some way, an innovator can do the right things and still fail. Leaders trying to ignite innovation have to move from rewarding innovation outcomes to rewarding behaviors consistent with successful innovation.

Thomas Edison (Release Your Inner Edison)

The conclusion to our 2008 book The Innovator’s Guide to Growth included an homage to Thomas Edison.⁴ While there is reasonable scholarly debate about the degree to which Edison deserved his sterling reputation, there is no doubt that the man could turn a phrase. Consider these Edison sound bites:

• “I never perfected an invention that I did not think about in terms of the service it might give others … I find out what the world needs, then I proceed to invent.” Edison would have tipped his cap to A. G. Lafley’s consumer-is-boss mind-set.
• “If I find 10,000 ways something won’t work, I haven’t failed. I am not discouraged, because every wrong attempt discarded is often a step forward.” Punched in the face plenty of times, Edison kept plugging away.
• “Opportunity is missed by most people because it is dressed in overalls and looks like work.”
• “Genius is 1 percent inspiration and 99 percent perspiration.”

Releasing your inner Edison means living those last two quotes in particular. While this book’s central thesis is that innovation is more approachable than ever before, that doesn’t make innovation easy. Innovation is a discipline. And like any discipline, mastery comes through hours of hard work.

Of course, not everyone has an opportunity to have a transformational experience like working at a start-up, launching a game-changing product like Apple’s iPad, or living in exotic locations. But think about how would-be marathoners train. They don’t start by running twenty miles. Instead, they might go to the gym to begin conditioning their muscles for running. They then run a reasonably short distance and successively push out as their muscles get acclimated to longer distances.⁵ You too can start modestly. Even changing your morning routine can begin to hardwire the skills required to be a successful innovator. Of course, ideally you will expose yourself to greater and greater challenges, but you should always look for the relatively simple ways to practice.

Organizational leaders should consider what they can do to provide opportunities for their top talent to develop skills as innovators, because the way most organizations groom talent in fact systematically weeds out the innovators. In most companies, your reward for success is greater and greater responsibility. The more the organization looks to you to deliver on tomorrow’s numbers, the less freedom you have to create new growth businesses. Organizations should consider intentionally giving their up-and-comers assignments that are more ambiguous so that these people develop the capabilities to deal with high degrees of uncertainty. That might actually mean giving them smaller assignments or moving them further from the core business to intentionally expose them to challenges that tone their innovation muscles.

Robert N. Anthony Sr. (Fight the Sucking Sound of the Core)

Sitting above my desk at home is a 1983 New York Times syndicated cartoon called Stockworth, by Hinda Sterling and Herb Selesnick (figure 3-1). It features a conversation between two executives. The first man says, “Power is neither created nor destroyed. It is merely transferred,” proudly noting how he is quoting ancient Chinese philosophy (and the law of conversation of energy). The other executive says, “Net worth equals assets minus liabilities. Anthony, Essentials of Accounting.”

Look up to my grandfather on the Mount Rushmore of Innovation to remember the notion of double-entry bookkeeping. Every transaction balances out. Every strength has a corresponding weakness.

The innovation masters have a variety of terms to describe this concept. Clayton Christensen guides people to analyze their organization’s “resources, processes, and prioritization criteria.” Vijay Govindarajan notes how all organizations have DNA that is impossible to notice but very powerful. Richard Foster talks about mental models that make it hard to see new opportunities. I call it the sucking sound of the core business.⁶

Regardless of the language used to describe it, you need to recognize that your core—business or personality—is a powerful magnet that can take the most powerful idea and turn it into something that has been done before.

To make it real, let’s play the “Who Could Have?” game. The game involves picking a popular start-up, and asking what established company could have launched the start-up. Nine times out of 10 the established company actually had something in the works that didn’t quite make it.

Consider Facebook. It wasn’t preordained that Facebook was to be created by a student in his dorm room. When I ask audiences who could have created Facebook, they typically respond with technology companies like Microsoft, Google, Amazon, or Yahoo! These are valid answers. But I push the audience members by asking them why people use Facebook. One core reason is a simple way to share memories and images. What other company has historically helped people share memories and images? Kodak. Here’s the interesting thing. The film giant had its fingers on Facebook as early as 2001. At the time, the company had purchased a company called Ofoto, one of the leading online album providers. How hard would it have been for Kodak to say, “You know, our tagline is ‘Share memories, share lives.’ Why don’t we let people simply share album pictures? While we are at it, we can create a feature that allows people to share news items as well.”

The idea was two steps away from Facebook. Of course, Kodak didn’t take those steps. As James Joaquin, the cofounder of Ofoto, explained, “What Facebook did was people-centric, not photo-centric, and that was the huge shift.”

Kodak succumbed to the sucking sound of the core, as did my team at The Dartmouth when we bungled our Internet strategy. It is a common and real problem that inhibits success with innovation. One leader from a company we advised put it nicely: “We’re organized to deliver consistent, reliable results. And that’s the problem.”

Organizations seeking to break the sucking sound of the core need strong, active leadership. Successful organizations are hardwired to maintain and extend their success model; they have been trained to seek and stamp out things that appear to be deviations or distractions. Active leadership can provide protection from the “corporate antibodies” that seek out and destroy novel ideas. One thing leadership can do is to create a safe place for innovation. Imagine a quarantine that keeps the corporate antibodies from infecting new ideas. Leaders who develop what innovation master Roger Martin calls an “opposable mind” can combat the sucking sound of the core by adapting their leadership approach according to the circumstance.

If you ever find yourself stuck, look to the Mount Rushmore of Innovation to remember four critical innovation mind-sets that enable successful innovation:

1. Be externally focused.
2. Recognize that your first idea is wrong.
3. Release your inner Edison, and start sweating.
4. Break the sucking sound of the core.

These mind-sets will form the underpinning of the twenty-eight-day innovation program. Before we get there, however, let’s look at seven pitfalls standing in front of successful innovation.