Anchoring and Innovation MindCamp Presentation

Why are we here? Please indicate by show of hands Enticed by the interesting interplay between ideation and anchoring You thought this was a sailing class You’ve just realized you are in the wrong room 2 out of 3 ain’t bad Actually, we are here to examine for the next few minutes what opportunities and challenges are created by “anchoring” when innovating

Please indicate by show of hands

Enticed by the interesting interplay between ideation and anchoring

You thought this was a sailing class

You’ve just realized you are in the wrong room

2 out of 3 ain’t bad

What will we try to do? Think about the challenges that anchoring presents when generating ideas, and how to use anchoring to help your team succeed Failing that, discuss interesting sailing analogies

Think about the challenges that anchoring presents when generating ideas, and how to use anchoring to help your team succeed

Failing that, discuss interesting sailing analogies

Introduction

Who am I? I’m Jeffrey Phillips, VP at OVO Innovation OVO is an innovation consulting firm focused on building innovation competencies in Fortune 5000 firms Personally led innovation projects at AIG, H-P, WellPoint, US Bank, T. Rowe Price and many other firms.

I’m Jeffrey Phillips, VP at OVO Innovation

OVO is an innovation consulting firm focused on building innovation competencies in Fortune 5000 firms

Personally led innovation projects at AIG, H-P, WellPoint, US Bank, T. Rowe Price and many other firms.

What does OVO do? We help firms Innovate on Purpose™ by defining strategic goals and implementing consistent processes Our capabilities include: Linking innovation to strategic goals and intent Trend spotting, synthesis and scenario planning Qualitative market research – voice of the customer and ethnography Facilitated Idea Generation Defining and implementing innovation processes and metrics Innovation Training Addressing cultural barriers such as compensation, rewards and recognition and communication Innovation Communities

We help firms Innovate on Purpose™ by defining strategic goals and implementing consistent processes

Our capabilities include:

Linking innovation to strategic goals and intent

Trend spotting, synthesis and scenario planning

Qualitative market research – voice of the customer and ethnography

Facilitated Idea Generation

Defining and implementing innovation processes and metrics

Innovation Training

Addressing cultural barriers such as compensation, rewards and recognition and communication

Innovation Communities

What’s an “anchor”?

What is this car worth? 2002 Model, Under 50,000 miles, Driven to and from work, short distances

Getting to MindCamp $100 Canadian by cab $25 Canadian by shuttle Free if a friend picks me up I get paid $300 if someone wants an hour of my time

$100 Canadian by cab

$25 Canadian by shuttle

Free if a friend picks me up

I get paid $300 if someone wants an hour of my time

Anchoring In both cases I “anchored” your thinking based on information I gave you, or expectations you had based on what you saw. Let’s take a quick look at Anchoring and why it can be a problem.

In both cases I “anchored” your thinking based on information I gave you, or expectations you had based on what you saw.

Let’s take a quick look at Anchoring and why it can be a problem.

Anchoring (NLP) During normal decision making, individuals anchor, or overly rely , on specific information or a specific value and then adjust to that value to account for other elements of the circumstance. Usually once the anchor is set, there is a bias toward that value. http://en.wikipedia.org/wiki/Anchoring

During normal decision making, individuals anchor, or overly rely , on specific information or a specific value and then adjust to that value to account for other elements of the circumstance. Usually once the anchor is set, there is a bias toward that value.

Wow! Anchoring is a real problem People who are anchored overly rely on information Adjust their realities to that information or value Change their perspectives to account for the elements They have bias toward that information or value

Anchoring is a real problem

People who are anchored overly rely on information

Adjust their realities to that information or value

Change their perspectives to account for the elements

They have bias toward that information or value

Issues for idea generation Anchoring creates problems when we want creative thinking, we get constrained thinking when we want the best ideas from everyone, we’re limited by anchors there’s inherent bias from the start anchors color how people think and respond

Anchoring creates problems

when we want creative thinking, we get constrained thinking

when we want the best ideas from everyone, we’re limited by anchors

there’s inherent bias from the start

anchors color how people think and respond

Did you bring your anchor? The anchors are ever present. You have to identify and control or eliminate them or they will frustrate and overpower you and your team You must confront them, and in some cases use them to your advantage Example: I’m an ENTP, an engineer, a marketer, a blogger, a father, a consultant, a libertarian, etc

The anchors are ever present. You have to identify and control or eliminate them or they will frustrate and overpower you and your team

You must confront them, and in some cases use them to your advantage

Introducing Anchors

Obligatory Sports Analogy Soccer is an inherently innovative game Little equipment, few rules Baseball is an inherently conservative game Very specific equipment, many rules Soccer has few anchors, baseball has many anchors

Soccer is an inherently innovative game

Little equipment, few rules

Baseball is an inherently conservative game

Very specific equipment, many rules

Soccer has few anchors, baseball has many anchors

What sports do you enjoy?

Did we mention.. Tic-Tac-Toe Chess Badminton Cricket Darts Track Swimming Curling

Tic-Tac-Toe

Chess

Badminton

Cricket

Darts

Track

Swimming

Curling

Sports Anchors What biases or anchors do we have? “ Ball” bias? “ Field” bias? North American bias? Did you bring these biases or did I introduce a “ball” bias by my example?

What biases or anchors do we have?

“ Ball” bias?

“ Field” bias?

North American bias?

Did you bring these biases or did I introduce a “ball” bias by my example?

I did that on purpose Yes, it was an underhanded and devious way to shift the discussion (sorry) Let’s talk about what kinds of anchors exist and how to eliminate them or use them to your advantage

Yes, it was an underhanded and devious way to shift the discussion (sorry)

Let’s talk about what kinds of anchors exist and how to eliminate them or use them to your advantage

Corporate and Personal Anchors

What are possible “anchors”? What the team: Knows to be “true” Believes can’t be changed Legislation, ethics, morals Believes the firm will/won’t do Believes is affordable Believes is “reasonable” What the individuals on the team believe and their personal biases

What the team:

Knows to be “true”

Believes can’t be changed

Legislation, ethics, morals

Believes the firm will/won’t do

Believes is affordable

Believes is “reasonable”

What the individuals on the team believe and their personal biases

What everyone knew was true

What is “legal”

What is “Reasonable”

The Good, the Bad and the Ugly

Facilitation As an ideation facilitator, you may intentionally or accidentally introduce anchors as well We often introduce anchors by way of “scope” - these are intentional and hopefully helpful anchors We may introduce unintentional anchors that hinder the team Anyone ever introduced an anchor?

As an ideation facilitator, you may intentionally or accidentally introduce anchors as well

We often introduce anchors by way of “scope” - these are intentional and hopefully helpful anchors

We may introduce unintentional anchors that hinder the team

Anyone ever introduced an anchor?

Positive benefits of anchoring Seeking incremental changes Seeking ideas in very specific areas Seeking ideas that are “doable” Anchor to anticipated results

Seeking incremental changes

Seeking ideas in very specific areas

Seeking ideas that are “doable”

Anchor to anticipated results

The Bad and the ugly Anchoring or the failure to release anchors can: Frustrate the team Take the ideation down a very narrow path, or in the wrong direction Limit ideation Cause discord because team members have different perspectives

Anchoring or the failure to release anchors can:

Frustrate the team

Take the ideation down a very narrow path, or in the wrong direction

Limit ideation

Cause discord because team members have different perspectives

Extending the Analogy

Taking this to extremes There are two other “anchor” analogies that we can use to think about innovation: “ Sail Anchors” Anchors Aweigh

There are two other “anchor” analogies that we can use to think about innovation:

“ Sail Anchors”

Anchors Aweigh

Sea Anchor / Sail Anchor A sea anchor slows the progress of a ship, assists in steering and calms the ship in heavy weather. What’s a “sail anchor” in innovation? A definition, goal or scope that helps anchor thinking A direction that helps people “get on board” An idea or topic that changes the direction of the discussion

A sea anchor slows the progress of a ship, assists in steering and calms the ship in heavy weather.

What’s a “sail anchor” in innovation?

A definition, goal or scope that helps anchor thinking

A direction that helps people “get on board”

An idea or topic that changes the direction of the discussion

Anchors Aweigh This describes the situation where the anchor is hanging from the “rode” or rope and not resting on the bottom. When do we need to “weigh anchors” in innovation? When the team is too conservative When the opportunity or threat is large Release anchors to free the team

This describes the situation where the anchor is hanging from the “rode” or rope and not resting on the bottom.

When do we need to “weigh anchors” in innovation?

When the team is too conservative

When the opportunity or threat is large

Release anchors to free the team

What’s your goal Incremental innovation: some anchors necessary Breakthrough innovation: anchors aweigh

Incremental innovation: some anchors necessary

Breakthrough innovation: anchors aweigh

Using and Overcoming Anchors

Bring, Introduce, Eliminate, Use (This should probably be an acronym) Anchors people bring with them What about anchors the facilitator introduces ? (like the sports analogy) How do you eliminate anchors? When necessary, how do you use them for your advantage?

Anchors people bring with them

What about anchors the facilitator introduces ? (like the sports analogy)

How do you eliminate anchors?

When necessary, how do you use them for your advantage?

Understand What corporate anchors exist What personal anchors exist

What corporate anchors exist

What personal anchors exist

Preparation Prior to any ideation session: Clearly define the opportunity or problem. Get agreement from the team. Define what is “in scope” or “out of scope” Provide background material before the ideation Goal: Establish helpful anchors, eliminate constraining anchors

Prior to any ideation session:

Clearly define the opportunity or problem. Get agreement from the team.

Define what is “in scope” or “out of scope”

Provide background material before the ideation

Goal: Establish helpful anchors, eliminate constraining anchors

Scene Setting Just before starting the ideation: Close the door – shut the team off from the “rest of the world” Remove the restraints of time, budget, laws of physics Generate the truly outrageous and wild ideas Goal: Cut as many anchors loose as possible

Just before starting the ideation:

Close the door – shut the team off from the “rest of the world”

Remove the restraints of time, budget, laws of physics

Generate the truly outrageous and wild ideas

Goal: Cut as many anchors loose as possible

Facilitation During an innovation event: Introduce appropriate anchors based on the innovation goals Use the anchors to direct ideation and conversation Identify and eliminate harmful anchors Goal: Use anchors to the team’s advantage

During an innovation event:

Introduce appropriate anchors based on the innovation goals

Use the anchors to direct ideation and conversation

Identify and eliminate harmful anchors

Goal: Use anchors to the team’s advantage

Concluding As you complete your work: Allow the team to reclaim their anchors as necessary Goal: Leave the team in a familiar harbor

As you complete your work:

Allow the team to reclaim their anchors as necessary

Goal: Leave the team in a familiar harbor

Success Getting ideas on the wall that you know couldn’t be implemented in the “real world” “ poking the eyes out” of people who pack glassware (Tim Hurson example) “ giving an electric shock to people when they use their credit card” (Actual client example) Which become successful ideas Hiring the blind to package glassware Establishing alerts and budgets for specific spending patterns

Getting ideas on the wall that you know couldn’t be implemented in the “real world”

“ poking the eyes out” of people who pack glassware (Tim Hurson example)

“ giving an electric shock to people when they use their credit card” (Actual client example)

Which become successful ideas

Hiring the blind to package glassware

Establishing alerts and budgets for specific spending patterns

Failure Tolstoy said “Every happy family is alike, and every unhappy family is unhappy in their own way” Similarly, failure is different in every instance Frustrated teams Few ideas, mostly obvious Uncertain goals and outcomes Discord, disagreement within the team Very different perspectives and expectations Failure is dictated by the anchors that weren’t released

Tolstoy said “Every happy family is alike, and every unhappy family is unhappy in their own way”

Similarly, failure is different in every instance

Frustrated teams

Few ideas, mostly obvious

Uncertain goals and outcomes

Discord, disagreement within the team

Very different perspectives and expectations

Failure is dictated by the anchors that weren’t released

Avoiding anchoring Prep work we’ve discussed previously “ Us against the world” mentality Relaxing/eliminating barriers Taking different perspectives What would an insurgent do What would a hungry competitor do What would a market entrant do What would a lobbyist do (change the regs)

Prep work we’ve discussed previously

“ Us against the world” mentality

Relaxing/eliminating barriers

Taking different perspectives

What would an insurgent do

What would a hungry competitor do

What would a market entrant do

What would a lobbyist do (change the regs)

Using effective anchors

Consider a Sea Voyage

Divergent / Convergent We’re familiar with the divergent / convergent methodology for ideation We enter with a set of “anchors” that we carry around with us What we “can” do What’s “legal” What’s “affordable” While diverging we need to cut those anchors loose

We’re familiar with the divergent / convergent methodology for ideation

We enter with a set of “anchors” that we carry around with us

What we “can” do

What’s “legal”

What’s “affordable”

While diverging we need to cut those anchors loose

Converging When we ideate we’re allowed to run free from our anchors When considering and evaluating ideas, we begin to settle in on new anchors What was the problem or opportunity What is the “best” solution we’ve generated based on the identified opportunity

When we ideate we’re allowed to run free from our anchors

When considering and evaluating ideas, we begin to settle in on new anchors

What was the problem or opportunity

What is the “best” solution we’ve generated based on the identified opportunity

Into Port

Recap Anchors can create bias and frustrate the team Eliminate the negative anchors by Adequate preparation Building up the team in the moment Introduce appropriate anchors to help the team work effectively in the meeting “ Re-anchor” the team at the end of a session

Anchors can create bias and frustrate the team

Eliminate the negative anchors by

Adequate preparation

Building up the team in the moment

Introduce appropriate anchors to help the team work effectively in the meeting

“ Re-anchor” the team at the end of a session

Bring, Introduce, Eliminate, Use (This should probably be an acronym) Anchors people bring with them What about anchors the facilitator introduces ? (like the sports analogy) How do you eliminate anchors? When necessary, how do you use them for your advantage?

Anchors people bring with them

What about anchors the facilitator introduces ? (like the sports analogy)

How do you eliminate anchors?

When necessary, how do you use them for your advantage?

Welcome to the harbor! Any Questions?

Contact Feel free to contact me! Email: [email_address] Twitter: @jdpuva Blog: innovateonpurpose.blogspot.com Website: www.ovoinnovation.com Phone: 919-844-5644 x789

Feel free to contact me!

Email: [email_address]

Twitter: @jdpuva

Blog: innovateonpurpose.blogspot.com

Website: www.ovoinnovation.com

Phone: 919-844-5644 x789