Orbiting the Giant Hairball
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Innovation is essentially legalized corporate gambling. How do you set the odss so that the house always wins?
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Orbiting the Giant Hairball
- 1. Joe Kleinwaechter Director, Innovation & Design Fiserv.
- 3. A hairball is an entangled pattern of behavior. It's bureaucracy, which doesn't allow much space for original thinking and creativity. It's the corporate tendency to rely on past policies, decisions, and processes as a formula for future success. Gordon MacKenzie Orbiting the Giant Hairball
- 4. Orbiting is operating beyond the bounds of the corporate perception of reality. Gordon MacKenzie
- 5. “If an organization is to choose vigor over an ultimate state of entropy, it must support both the rational exploitation of success and the irrational art of groping.” Gordon MacKenzie
- 6. Innovation represented 2/3 of UK private sector productivity growth (2000-2007). Kelley/Gibson Stoking Your Innovation Bonfire
- 7. Innovation as a Top 3 Priority 72% of 74% Executives 72% 72% 70% 68% 66% 66% 66% 64% 64% 62% 60% 2007 2008 2009 2010 RTEC Transformational Growth Through Innovation
- 8. Executives Concerned about Transformational Innovation Top Not a Top 25% Concern Concern 75% RTEC Transformational Growth Through Innovation
- 10. 600 Headlines Written 18Published 3% Success Rate This American Life, PBS Tough Room, 8-Feb-2008
- 11. Ideas 30% poorly timed 30% random 40% good Kevin Coyne Brainsteering
- 12. Innovation Projects Scuttled Rescinded 16% 24% 60% Clayton Christianson The Innovator’s Solution
- 13. Release Failure All Products Major Products 90 8 161 14 The Next Web 17-Oct-2011
- 14. Which direction is this bus going, left or right? 93% of successful innovation starts in the wrong direction. Drew Cannon 30-Aug-2011
- 16. What is Innovation? Model Eyes Innovation 4 The Invention Idea Inspiration
- 17. Inspire Ideas that create Inventions which are Innovative
- 18. Inventions are Ideas which have Value
- 19. Innovations are Inventions which have Demand
- 21. Market Transformational Partial New Diversification Development Diversification (10%) 19% Adjacent 33% Market Modified Market (20%) Limited Partial Expansion Diversification Diversification Core 48% Existing Market Product Product (70%) Penetration Extension Development Existing Modified New Product Managing Your Innovation Portfolio HBR May 2012
- 22. Disruptive Innovation Degraded Performance Existing Product Time Clayton Christensen The Innovator’s Dilemma
- 23. Innovation is essentially legalized gambling. .. where you are the house.
- 25. [ video clip of Pats/Colts Nov 2009 game removed to reduce file size Video link ]
- 26. My 4 Laws of Innovation 1.The house is going to lose a lot of bets. 2.The house is going to win some bets. 3.No one knows ahead of time which ones. 4.The only way to lose is to not take enough bets using house odds. Law of Large Numbers
- 27. Creating House Odds 1 2 3 Focus Early
- 28. Creating House Odds 1 2 3 Decide Fast
- 29. Creating House Odds 1 2 3 Capture Everything
- 30. Ineffective Sustained Innovators Innovators Ideas Steep Slope Concepts 55% 74% $ Projects $ Vital Few Releases
- 31. Be Brutal! Corporate Executive Board Enhance the Commercial Impact of Innovation Investments
- 32. 15 min Self-Check No Time Limit 4 hours Biz-Check 16 hours Tech-Check Corporate Executive Board Enhance the Commercial Impact of Innovation Investments
- 34. If you are only counting the gains from successful projects, you are leaving half of the value of innovation on the table.
- 35. 40 years is a long time to remember
- 36. Yes, it’s , but you are the . Set the house odds by , , and . Don’t let any individual bet affect your approach. When you stick to the system the house always wins.
Editor's Notes
- Originally presented to Atlanta SPIN20-Jun-2012
- Retelling the story of getting my original proposal rejected because it was too edgy, too innovative and “not enough words”. Reflection on how that frustration is exactly the emotion this talk is about and how the light bulb went off that I needed to use my own advice to “orbit this hairball”The Seinfeld reference about a coffee table book about coffee tables was much the same way.
- Some definitions
- The orbit prevents one from crashing into the hairball as well as floating off into deep space.
- You must embrace the rational and the irrational.
- The challenge is which is which?Innovation makes perfect sense in hindsight.
- Scuttled – killed without making it out the doorRescinded – removed from the market within the first year of release
- Build slideThese are not rejected ideas, but cancelled products (read: major investment)Guess who this company is?
- Build slide90% of kindergartners surveyed go this right. If it’s a bus, the door is on the other side, therefore it must be going left.
- This is my own personal model and definition of the relationship of four elements shown.
- This is the story about Johnny and mom giving him the crayons to create art. Only mom could love his art enough to put it up on the refrigerator. It is an invention because it has value, but it is not an innovation because it lacks demand. No on but mom wants it.
- Build slideWe’re focusing heavier on transformational in this talk, with some layers of adjacency.Interestingly enough companies are now leaning much heavier on investment in transformational and adjacent efforts and far less on core. This is likely due to economic downturn.
- Build slideToo many people misuse the word disruptive innovation to mean transformation innovation. Truly disruptive innovation must have a performance downgrade, otherwise it is just pushing the natural s curve.
- Build slideIf you are the house, you set the odds.
- Patriots had the ball on their own 28 yard line and decided to go for it.Nov. 15, 2009 Colts win 35-24 over PatriotsThe bet was statistically the right one to take. But they lost. Belichick was torn to shred the next day in the media. If Bill were to play this way a million times and always play the odds, he would be right more than he was wrong. That’s what it takes to run an innovation portfolio.Recap: http://scores.espn.go.com/nfl/recap?gameId=291115011
- Build slide
- Build slideSustained innovators have a very quick winnowing process in getting to concept phase. Much more brutal and deliberate than the others. Interestingly enough they also have a less steep concept stage, because the ideas are better vetted in the previous stage.
- This is an example of an artifact the idea creator must fill out before advancing their idea through the idea stage. Note the detail of information.
- This does not say “push an idea through quickly” Ideas take as long as they need to take.This says when an idea is ready to be evaluated, due it immediately when ready and take little time in making the call. Kind of like defending a thesis, at a very cursory, surface level.Self-check – this is a simple evaluation checklist and scoring that every idea maker must make before submitting the idea. 4 or 5 questions with a rating 1-5 for each. This must meet a minimum score to pass further.Biz-check – this is a meeting of business folks to test the idea’s business merits. 4 hours of evaluation is enough time to get to the level of assessment detail necessary.Tech-check – same as a Biz-check except looking at all of the technical options and constraints.
- Build slideThe story of Corning developing glass in the 1960s for automobiles. Failed miserably due to costs, environment, weight, etc.They revived the technology again in 2009 and called it Gorilla glass.It is now wildly successful in the cellphone/tablet market to prevent screen scratching.They now even have a flexible version.
- When we asked the product manager at Corning how they were able to revive the Gorilla glass technology, he indicated they had a great idea capturing system.If you 80% of your ideas are going to fail, if you can’t capture them for learning purposes, you can’t win.Get an IMS – and not just one that captures ideas. It has to reinforce your ideation workflow models and force decision making.If you just capture ideas it will become an idea morgue.