What Businesses Can Learn About Innovation from Cultural Anthropology

August 25, 2009

My good friend, Jeff Salz, is a fantastic speaker and a Doctor of Cultural Anthropology. Lately we have had some fascinating conversations about what businesses can learn about innovation through the study of cultural anthropology.

To get things rolling, I suggested that there were two areas where the innovation world would benefit from his expertise:

  1. Studying customers through anthropological means.
  2. Learning about organization culture through the study of the history of civilizations.

In this blog entry, I discuss the first point. A future blog entry will address the topic of culture and civilizations.

Anthropological Studies of Your Customers

The traditional way to get customer insight is to do one of the following:

  • Focus groups
  • Surveys
  • Customer analytics

Although these techniques are useful, they have quite a few shortcomings.

In my article on “Why Statistics Kill Innovation,” (pdf) I suggest that if you are crunching numbers, you are probably gathering information from existing customers. This will give you insight into their buying habits, usability behaviors, and other patterns. But most likely you are only gathering data about YOUR customers. As a result you are missing the input of former customers or people who never were customers.

Another reason that these techniques – especially focus groups and surveys – don’t work, is that they tend to test the conscious mind rather than the unconscious mind. For more on this, don’t miss my article on “Are Your Conscious and Unconscious Minds Aligned.” In it I discuss a testing approach called “Implicit Association Testing” that can help test the unconscious mind. However, you can’t always get access to your customers in a way that they can take such a test.

What can you do?

Become Indiana Jones

You can don your Indiana Jones hat and do some anthropological studies.  Where possible, you can observe your customers. By doing this you can find unarticulated needs and wants.

One client of mine decided to do this. They publish text books for students and instruction manuals for teachers and professors. It wasn’t until they started to watch the teachers in the classroom that they developed some interesting  product enhancements. For example, during one anthropological study, the publisher found that teachers lugged several extremely heavy books from class to class.  This led the publisher to create a version of the instruction manuals that could be segmented.  This enabled teachers to carry only the section of the book they needed that week, and not an entire semester’s worth of paper.  Teachers never made this suggestion during surveys and focus groups.

Jeff has another interesting suggestion. He believes that the best way to understand a culture – and the unconscious beliefs – is through the stories people tell. By engaging in storytelling and listening to stories, you can uncover the true culture. These aren’t the typical business-like conversations you have in boardrooms. Rather they are more akin to the stories that you would tell while sitting around a campfire.  Jeff said to me…

Whether Neanderthal, Neolithic or New Yorker, our most important decisions are made on an ‘affective/emotional’ rather than ‘cognitive/objective’ basis. To accurately apprehend the subjective elements that drive and inform a culture – and its decision-making – there is no substitution for personal immersion. The only way to understand people is to learn their language – spoken and unspoken. Break bread, swap tales, share coffee, wine, laughter and sorrow. In the process you will discover the ways you and they are the same. From this ‘sameness’ may come not only the understanding you seek but – if your mind is fresh – a new awareness of yourself and your society as well.

Now is the time to don your fedora and see the world – and your customers – with fresh eyes.

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Why Edison Was Wrong

August 7, 2009

Last night I had an enlightening conversation with Alph Bingham, the co-founder of InnoCentive from Eli Lilly.  This guy is fascinating!

Alph suggested that many people do not like open innovation (external crowd sourcing) because it runs counter to a widely held belief of the R&D community.  Researchers often throw around the Edison quote, “I have not failed 700 times. I have not failed once. I have succeeded in proving that those 700 ways will not work. When I have eliminated the ways that will not work, I will find the way that will work.”

Researchers use this quote because it “validates” the iterative development innovation process; the cornerstone of most R&D departments.  They have convinced themselves that they learn as much from their failures as they do from their successes.  Call it what you want, the 700 attempts were failures.

When some R&D people look at open innovation, they see it as linear rather than iterative: post a challenge and get a solution.  This seems inconsistent with their belief in learning from failures.

Alph made the point that in the R&D world, the value of iterative development is overrated.

What if Edison found a solution to the light bulb challenge on the first try?  Would that be bad?  Would he have continued to find the 700 ways that did not work?  Did the 700 failures really add that much value?  Can R&D organizations afford to fail 700 times?  Not in today’s competitive environment.

Alph suggested that open innovation is a massively parallel process where failures and successes happen at the same time.  You post a challenge and you get dozens or hundreds of solutions.  Some won’t work.  But all you need is one solution that does work.  And with open innovation, you only pay only for the solutions that do work.  Failures cost you nothing in terms of time and money.  With internal iterative development, you pay for the successes and the failures.  Do you really learn enough from your failures to justify the extra cost and time involved?

Alph’s perspective is fascinating and I fully agree with him for analytical/deterministic challenges.  Creative challenges and their solutions, on the other hand, often can’t be proven correct until they are tried out in the real world.  Iterative development – via small and scaling experiments – may still be the best approach for solving less deterministic problems.  I call this approach the “build it, try it, fix it” model.  Having said that, the iterations could potentially be staged as a series of open innovation challenges that continue to refine concepts until they are market ready.  This would be a massively parallel iterative creative development.  Very cool.

This got me thinking about a conversation I had with an executive from Chrysler many years ago while I was working at Accenture.  I asked him who he felt his biggest competition would be in the future.  He pointed at me and said, “You.”  Although he was half-joking, it’s true that the role of car manufacturers these days is less about manufacturing and more about integration.  The Accentures of the world are masterful at integration.

And maybe this integration skill is the MOST important skill for your organization to have.

As platforms like InnoCentive continue to grow, problem solving of all types –creative and analytical – will be outsourced in a massive parallel way to a huge network for solvers.  If we take this to an extreme where all challenges are outsourced via crowdsourcing, the role of a company would only be to integrate these solutions together into a seamless offering.

Although this is easier said than done, this one skill may be critical for the survival of your business…and maybe even the US economy.

China and India have a growing base of highly educated engineers and experts.  Eastern European countries and parts of Asia have large creative bases.  The world is truly flat.  And all of these countries have people who are willing to work for pennies on the dollar.

If we try to beat these countries at their game, we will lose.  We could never educate enough people.  And even if we could, our workforce would probably not be willing to labor for lower wages.

Integration is the key.  Yes it is difficult.  And that is good news.  While the rest of the world is focused on the trees (the point solutions to specific challenges), we need to become masterful at defining the forest (the strategy, architecture, and integration of the point solutions).  This is where value is created.  And this is much harder to outsource.

It reminds me of something from my 24/7 Innovation book I wrote back in 2001…

“(As innovators,) we are architects of companies and industries.  An architect is not a ‘reengineer.’ To illustrate this point, I often ask clients what is the difference between an optimist, a pessimist, a reengineering consultant, and an architect. The optimist looks at a half filled glass of water and sees it as half-full. The pessimist looks at the same glass and sees it as half-empty.  The reengineering consultant sees too much glass. Cut off the top. Downsize. An architect looks at the same glass and asks questions such as ‘Who’s thirsty?’ ‘Why water?’ Or ‘Is there another way to satisfy the thirst?’ It is this questioning, challenging and rethinking that differentiates architects from those who rearrange the deck chairs on The Titanic.”

Find solutions everywhere.  Embrace open innovation.  And think like an architect. Ask the difficult questions.  Assess what matters most.  And build a core competency around integrating point solutions.

Remember, we are no longer in the tree business…we are in the forest business.

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InnoCentive Seeks Experienced Innovation Consultants

August 5, 2009

I completed my first month as InnoCentive’s “VP Strategic Consulting & Chief Innovation Evangelist.”  In a short period of time, we made excellent progress on a number of fronts and will be announcing our plans shortly.  My next task is to build my team.

And maybe that is you!

I am looking for a number of highly skilled innovation experts who want to help me launch this exciting new venture.  In short, I am looking to hire people who are passionate about…

  • delivering innovation consulting to several clients at the same time. Our unique “catalyst” model reduces the amount of time spent with any one client while improving results.
  • participating in sales activities of the company. Although this involves some lead generation (no cold calling), most leads will be generated by a dedicated sales team. The consultant’s primary sales role is focused on proposal development.
  • creating intellectual property and methodologies that will help the consulting team be more effective and ensure consistency of delivery.

If you want to get a sense of my high level innovation philosophy, please read the following articles:

You can learn much more about the role from the InnoCentive Innovation Consultant Job Description

If you have questions, write me at steve@24-7innovation.com.

I want YOU for innovation!

P.S. As of December 31, 2009, we hired all of the people we need for now.  We expect to start hiring more people in the middle of 2010.  Feel free to write if you are interested and we will keep your resume on file.

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Are Your Conscious and Unconscious Minds Aligned?

August 1, 2009

While working on Innovation Personality Poker® over the years, one question has lingered in my mind…

How do we know we are getting the most accurate picture of someone’s personality?

Personality Poker is based on a 75 year old psychological testing technique called a Q-sort.

According to Encyclopedia Britannica, in a Q-sort, “a person is given a set of sentences, phrases, or words (usually presented individually on cards) and is asked to use them to describe himself (as he thinks he is or as he would like to be) or someone else.” In some variations, the cards are sorted from most like the individual to least like them.

If you read academic paper about Q-sorts, you will see that the question arises as to whether or not a self-assessment is accurate. Researchers question if other methods of personality testing are more accurate.  They posit that there are three testing methods…

  1. Self-assessment (of the conscious mind)
  2. Assessment by a friend, family member, or colleague
  3. Assessment by an unbiased 3rd party who is expert in the Q-sort process

Which method is most effective?  It appears that the answer is “all of the above.”  All methods are accurate, depending on the situation.

However, there is a 4th method that is not listed above that may prove even more interesting.

Can our unconscious mind be a better predictor of our personality than our conscious mind?

There are very few methods available to answer this question. Fortunately I was introduced to people at Harvard University who developed a tool called “Implicit Association Testing (IAT).”

Harvard’s website gives a very simple introduction to the concept…

“It is well known that people don’t always ‘speak their minds’, and it is suspected that people don’t always ‘know their minds’. Understanding such divergences is important to scientific psychology. This web site presents a method that demonstrates the conscious-unconscious divergences much more convincingly than has been possible with previous methods.”

In short, these tests tell you if your conscious mind (i.e., explicit) is aligned with your unconscious mind (i.e., implicit).

We are about to start work with Harvard that will assess if the conscious mind (tested via the card-based version of Personality Poker) correlates with the results from the unconscious mind (tested via a specially designed Personality Poker IAT).

One of three scenarios will prove to be true:

  1. In most people, the conscious mind is perfectly aligned with the unconscious mind
  2. In most people, the conscious mind is not aligned with the unconscious mind
  3. Alignment between the conscious mind and unconscious mind varies from person to person

If scenario #1 proves to be true, then we will have proven the validity of the Personality Poker at both a conscious and unconscious level.

However, if scenarios #2 or #3 prove to be true, we have a new opportunity…to develop an online IAT-based Personality Poker game that we can make available to the public. In some respects, scenario #3 is most interesting, because it means that in some cases “explicit” personality testing (done via cards, questionnaires, and other diagnostics) is accurate. However in order to get a full picture of one’s personality, “implicit” testing is also required. Only through both types of testing can we get an accurate assessment of one’s total psyche.

In order to better understand Implicit Association Testing, I encourage you to take some of the tests on the Harvard IAT website. This may give you some interesting insights into your own personal biases…some of which you might not want to even admit to yourself.

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