Innovation Bottleneck #22C - ‘Kill Your Darlings’

 

‘Kill your darlings, even when it breaks your little egocentric heart.’ Steven King

Innovation can be a painful process. Good writing, for example, involves substantial rewriting, and often this means cutting the things we’re most attached to. ‘Look how clever I am!’ Like Narcissus, we fall in love with our reflection. The thing is, your ‘darlings’ are usually lousy. (I speak from experience.)

The Better Mousetrap Fallacy

This is doubly true when you’re trying to develop a new product or service. The harsh truth is, people don’t care about your ‘darling’, they just want to solve their problem. The popular 19^th Century proverb: "Build a better mousetrap, and the world will beat a path to your door." – is mostly wrong.

Creating a technically superior product does not automatically lead to commercial success. For example, over 4,400 U.S. patents have been issued for new mousetrap designs – and almost all of them failed. The simple, cheap snap-trap designed in 1894 remains the dominant commercial standard.

(As always, good judgement & finesse are required. On occasion, a brilliant technical innovation, say a much faster computer chip or a drive that holds way more memory will indeed dominate the market.)

As a rule, technical superiority does not equal customer demand. Consumers buy outcomes (getting rid of mice easily and cheaply), not intricate engineering. Innovations succeed only when they solve an acute, recognized use pain point, and not what the creator assumes the user needs.

Love the Problem – Not Your Great Idea

Most people find this one hard to absorb & I’m no exception.  The fact is nobody cares about your great idea. They just want to solve their problem.

And so, we need to love the problem & accept the unpredictable direction our experiments take us.  Such pivots are normal. It’s common to end up in an entirely different market segment and a radically different offering. One FMCG Innovation team we mentored in East Asia starting out focused on delivering a premium soft drink aimed at affluent Gen Z customers.  They ended up delivering a premium plant-based drink for upwardly mobile Gen Y & Gen X customers worried about whether they’d be around to support their elderly parents.

Another B2B innovation team started out focused on delivering premium car care products aimed at high-end auto body shops.  They ended up providing modular kits aimed at newly-arrived professionals & entrepreneurs keen on showing the world & their families that they had made it. Yet another Innovation team in the Financial Services industry started out focused on levelling up a wealth management app, and ended up creating a user-friendly small business loan application app that provided loans to qualified applicants within 48 hours.

Pivoting is like riffing in a jazz piece or like modulating to a new key in jazz composition. You hear the same themes, voicings and chord structures, but somewhat different, and in a different context. A great Innovation team is like a great band. Love the problem, love the process.

Stay tuned.

Best wishes,

Pascal Dennis         E: pascal.dennis@leansystems.org

Igniting New Growth is Like Falling in Love

 

‘Shall I compare thee to a summer’s day?’ William Shakespeare

As a Toyota acolyte, I experienced the power of Kaizen - continuous incremental improvement creating continuous Value (not unlike the effect of compound interest). A decade ago, a nagging doubt crept in. If Kaizen & TPS are enough, why are the market valuations of the Tech tigers so much higher than those of the great Industrials? Clearly, Kaizen is necessary, but not sufficient. And so, I went to Singapore and fell in love.

A human being drew this & wrote this

Finding the Blue Ocean

I fell in love with the mindset, skillset & processes of ‘Abracadabra’ Innovation – creating new offerings seemingly out of nothing. In earlier articles, I described my collaboration with Laurent Simon – my friend, co-author & East Asia Innovation leader. Under Laurent’s guidance I participated in Innovation sprints in a range of industries. Twenty-five years after my Toyota apprenticeship, I found myself on another steep learning curve - how to ignite new Growth.

My Sprint colleagues & I were seeking the proverbial ‘Blue Ocean’, a place where nobody else was fishing. Kaizen, by contrast, entailed making small improvements to an existing offering or process – a very different challenge, though no less profound.

Abracadabra Innovation is Like Falling in Love

Abracadabra Innovation is a journey in the dark. Our Sprint teams often have little data & thus cannot answer the most basic innovation questions:

1.     Who is the customer?

2.     What do they value?

3.     Why do they buy or not buy?

Lesson # 1: you have to create your own data. You have to learn our way up the proverbial innovation curve through quick, cheap experiments. (Lean experimentation has a bright future).

Lesson # 2: It's like falling in love. You build trust a little at a time. Coffee, then lunch, then a low-risk date, say, a bike ride or a museum visit. So far, so good? Do I know this person? Do I like & trust them? Do I want to spend more time with them? Okay, then maybe dinner? At each step, each party gives a little more, and trust grows thereby.

We want to gradually engage the customer. The stages are typically some version of: I Know, I Like, I Trust; I’ll Try, I’ll Buy, I’ll Buy Again. And if you’re really good & lucky: This is so great, I’m going to tell all my friends! At that point the proverbial Customer Funnel becomes an Hourglass.

Think of this as a process with three Phases:

·       Awareness (Who are these jokers?),

·       The Bridge (Maybe I’ll try it), and

·       The Clubhouse (I’m a fan)

The innovator’s job is to pull people from Left to Right, and into a Clubhouse full of fans. Like any process, Innovation has bottlenecks. As Eli Goldratt taught us decades ago in ‘The Goal’, our job is to 1) Identify the bottleneck(s), 2) Understanding the blockers underlying each bottleneck, 3) Remove the bottlenecks, and 4) Keep going till we have a clubhouse full of fans.

And here’s the hard part – to do so we have to generate sound data usually out of nothing.

Next time I’ll talk about common innovation bottlenecks. Stay tuned.

Best wishes,

Pascal Dennis         E: pascal.dennis@leansystems.org

Kaizen is Necessary But Not Sufficient

 

‘There are more things in Nature, Horatio, than are dreamt of in your philosophy.’ Hamlet

As a Toyota acolyte, I was focused on the factory. How could I not be? New factories & model launches, new processes & equipment, continuous problem solving in a splendid team environment. I experienced world-class management & leadership. A Toyota logo is forever emblazoned on my heart.

But I began to realize there were large gaps in my understanding. If TPS was enough, why were the Tech tigers so much more valuable than the great Industrials? And so, I went to Singapore seeking a sensei.

Finding the Blue Ocean

I found my Innovation sensei in Laurent Simon, my friend, co-author & East Asia Innovation leader. Under Laurent’s guidance I participated in Innovation sprints in a range of industries (Financial Services, Consumer Goods). We were trying to create something seemingly out of nothing – ‘Abracadabra’ Innovation. Twenty-five years after my Toyota apprenticeship began, I found myself on a new learning curve, one just as steep & just as exhilarating.

Kaizen entails making continuous incremental improvements to existing offerings & processes and can achieve seemingly magical outcomes not unlike those of compound interest. My Sprint colleagues & I were seeking the proverbial ‘Blue Ocean’, a place where nobody else was fishing – a very different challenge, though no less profound.

I Thought I Understood the Customer

At our great Toyota factory, we thought we understood our customer, and so we did – to a point. We understood the customer’s wide range of satisfiers & dissatisfiers. We set both process & outcome targets for critical items like water leaks, engine surges & stalls, squeaks & rattles and dozens more. We focused kaizen activity on hot spots, kept improving and repeatedly won the coveted JD Power Gold Plant Quality award (still a point of great pride).

But here’s the rub: Could my Toyota colleagues & I have imagined that the automobile would evolve into a ‘smartphone on wheels’ or a ‘living space’ designed for comfort & productivity?  Could we have imagined parallel developments like the Smartphone or AI?

Kaizen is necessary but not sufficient. Abracadabra Innovation entails creating something new & useful seemingly out of nothing. We were often in the dark regarding core innovation questions like:

1.     Who is the customer?

2.     What do they value?

3.     Why do they buy or not buy?

We had to create our own data by running quick, cheap experiments. We had to learn our way up the proverbial innovation curve.

Abracadabra Innovation is a Process

What have I learned about innovation?

It’s a process through which you gradually engage a prospective customer.  Process steps typically comprise some version of:

·       I Know, I Like, I Trust; I’ll Try, I’ll Buy, I’ll Buy Again, and if you’re lucky,

·       This is great, I told all my friends!

This so-called ‘customer funnel’ has three phases:

·       Awareness – (Who are these jokers?),

·       Bridge – (Hmm, I should check them out), and

·       Clubhouse – (I’m a fan)

The innovator’s job is to pull people from Left to Right, and into the Clubhouse. Like any process, this one has bottlenecks. As Eli Goldratt taught us decades ago in ‘The Goal,’ our job is to 1) Identify the bottleneck(s), 2) Understand the blockers underlying each bottleneck, 3) Remove the bottlenecks, and 4) Keep going till everything flows.

To create ‘flow’ we have to a) develop hypotheses around the core innovation questions, b) run quick, cheap experiments, c) thereby generate sound data, and d) continually adjust our offering based on what we’ve learned, without going broke.  

Experimentation has a bright future! More to come.

Best wishes,

Pascal Dennis         E: pascal.dennis@leansystems.org

 

Innovation is Even Harder Than Baseball

 

"How do I avoid going through all this twice?" Bob Dylan

Baseball is a game of failure. Ohtani at the plate? He fails more than 70% of the time. Kaizen (incremental innovation) success rates are much higher. At my alma mater, Toyota Manufacturing, our strike out rate was much lower than Ohtani’s. Each year we hit demanding improvement targets in Safety, Quality, Delivery & Cost, which created the kind of 'Kick Ass, Take Names!' culture I enjoy to this day.

What about Abracadabra Innovation (aka creating something new out of nothing)?

Does Innovation Failure = Waste?

 Abracadabra Innovation (aka creating something new out of nothing) entails failing 90% of the time! My earliest sprints in Financial Services & Consumer Goods were a bit of a shock. Toyota's powerful methods & mindsets around Value & Waste are an indelible part of me. And here I am, part of a Sprint team whose experiments almost always fail, and whose offerings the customer almost always rejects! Surely, that's pure waste...

 The Currency of Innovation is Learning

 It's pure waste only if you learn nothing, and only if your experiment is needlessly expensive. But what if your experiment is quick & easy, say, a low-cost ad on the customer's favored channel, that tests the appetite for a critical product attribute? Or a brief online survey that illuminates an undiscovered Early Adopter group? Or a pop-up store & product mash-up that validates (or invalidates) a critical hypothesis around price point or distribution channel?

 That's a different story, no? The currency of innovation is learning. Hence the well-known mantra: ‘Fail fast, fail forward’. Each these experiments generate valuable knowledge & prevent far great waste downstream.  Like making, marketing & distributing something nobody wants. This is one waste Lean/OpEx usually misses. We're trained to look for waste in existing processes & products, not in our aggregate offerings & how they are received. The famous Wheel of Waste does not include 'making stuff nobody wants'. 

 

To be fair, Lean/OpEx managers & engineers are not trained in Abracadabra Innovation. My Toyota sensei drew a circle on the factory floor & asked me to watch the process till I understood its secrets, and especially the value & waste. He did not ask me to run experiments around who is the customer, what do they value, and why do they buy (or not) from us?

 To answer such questions, I had to go to Singapore & seek out different senseis. I learned new methods & mindsets. Sometimes they overlapped with my Lean/OpEx experience, sometimes not, as is the case with the attitudes around 'failure'. Nonetheless, my Lean/ OpEx foundation was extremely helpful, especially to the many sprint team members I mentored. 

 Applied Learning Equals Value

 Top execs in major companies tend to have a background in Operations, Finance or Engineering. (It’s been my honor to have mentored many). In my experience, many leaders are vulnerable to the Innovator’s Dilemma. To wit, the ROI on innovation work will always be much less than Business As Usual – unless we accept the above adage. Ambidexterity is now an essential element in the senior leader’s repertoire. It’s no longer enough to protect the core business, we must also ignite new Growth.

 In summary, Abracadabra Innovation is harder than baseball. You have to frame success & failure in terms of learning. "What are we trying to learn with this experiment? What's our hypothesis? How will we know if we're right? What's a clever way of getting this data? How do we make it quick, cheap & easy? And most important, how do we record, make it visible & share the learning?

 Best regards,

 Pascal Dennis         E: pascal.dennis@leansystems.org