Last month (November), Best Practices Are Stupid, was featured in Southwest Airline’s Spirit Magazine.  Now that it is no longer on planes and can’t be found on the internet, I figured it was time to share the article with the readers of this blog.  They did such a nice job, I feel as though their work should live on.  Click the image below to launch the article in a new window. Enjoy!

It seems as though everyone wants to write a book. Unfortunately, most people don’t know where to start and, therefore, become under-motivated or overwhelmed. The result? Good intentions; no book.

But what if you could have a bookstore quality paperback book in your hands in two weeks? And what if you didn’t have to do much writing? Here’s a technique that I used to publish a nonfiction book in a fortnight, and sold tens of thousands of copies.

Why do you want to write a book?

It is important to start here. It’s a question many people fail to ask themselves. They don’t think about what they want to achieve with their writing. And they should, because the objectives will define the approach. I’ll give you three common reasons people want to write (in addition to just wanting to see their name in print or to share their ideas with the world).

1. You want to be rich and famous. If this is your objective, you may want to look elsewhere. Only 1,000 out of 172,000 books published each year sell over 50,000 copies. Very few authors become wealthy from books sales. In fact, most top-selling authors were rich and famous before they published their book.

2. You want to establish your credibility. If this is your objective, then using traditional publishers (e.g., Penguin, Harper Collins, McGraw-Hill, Wiley, etc.) may be the best approach. These publishers reject 98 percent of the books submitted to them, so getting your book published by them is like getting a stamp of approval; it’s automatically credible. In addition, these publishers handle all distribution, so you don’t have to worry about getting your books into stores yourself. If you’ve never before published a book, and credibility is your objective, then you may want to consider this path first.

3. You want to boost you existing business. Do you already have a business with an established client base? A book can be great marketing material. Instead of pushing your business, it teaches readers (and potential customers) what you know. And yes, it can generate some extra income, too.

Print-on-demand (POD) publishing

Even if you want to establish your credibility via a traditional publisher, you have one challenge: getting a publisher.  Publishing is a bit of a Catch 22. Authors who are not published are most interested in traditional publishers, yet publishers want only those people who already have a following.

Also, traditional publishing can be notoriously slow, and your content could very well be dated by the time your book gets released. In contrast, print-on-demand publishing allows you to have 100 percent up-to-date content, since you have the opportunity to update the content before each printing.

Another advantage of POD is the cost per book. Even with author discounts, you are lucky to get copies for $10. This makes it too expensive for many companies to order in bulk.

Finally, a potentially important advantage to POD is the fact that you retain all of the rights. You can reprint your content in any form you want: workbooks, audio books, eBooks, flash cards or training manuals. You are somewhat limited when you work with traditional publishers as they require you to sign over most of the rights.

Writing and publishing your book

You will probably make less money from your book than you will from the services or products you sell as a result of the book. However, the book still has to be good enough for people to want it, yet inexpensive enough for you to be able to give it away.

I have boiled the approach down to eight easy steps. Although a lot more can be written on the subject, this should give you enough to get started.

Step 1: Get clear on the content and format

Here are some important things to consider for your two-week book.

• Your book should provide the reader with insights on your area of expertise. You want to share the breadth of your experience, but not necessarily the depth. The key is, you must already be an expert and should be able to talk about your topic for at least an hour. Two hours is better.

• Create a book that is concise and easily digestible. The final length should be under 100 pages. Fifty to 75 pages is fine.

• Identify an overarching framework. Most business books have some type of framework that’s incorporated into the book. It can serve either as the table of contents or, at the very least, can guide the development process.

Step 2: Record a speech or workshop

This is the step where most of the content is generated. Many of us, especially in the professional services area, give presentations, do training and facilitate workshops. Buy yourself a digital recorder and record a session. It’s that simple.

If you don’t give speeches, you can record a workshop. Or you can simply record a conversation with someone where you describe your approach. Doing is better than discussing. The key is, don’t do it alone. You must record a session where you interact with one or more other people.

Step 3: Transcribe your audio

This is the simplest, yet most expensive step. You can of course do it on your own if money is an issue. Or you can use a third party that charges approximately 1 cent per word.  If you record a two hour conversation or workshop, you might end up with 90 minutes of usable content. This would translate to a little more than 10,000 words, which is perfect. Your cost would be under $100 for the transcription. And if you go overseas, you can get it done for as little as $40 for 90 minutes (this is what I do).

Step 4: Choose your book format and paste in your transcript

Go to a book store and find books that have a similar layout to what you want. There is no right or wrong approach. For this book, the content is more important than the layout. The nice thing is, you can refine the layout with future printings.

Make a template in Microsoft Word (or whatever editing software you are comfortable with). Use the “Styles and Formatting” as a way of setting your text, headers, bullets, etc.  Once you have your template created, you can paste in the text from your transcription. Be sure to paste the text in an unformatted style so that you pick up the fonts of the template and not those of the transcription.

Step 5: Add headings, ask questions and edit

First, try to find logical headings. The more the better, as you can create a content rich table of contents page.

Next, edit the text so that it reads like a book rather than a speech. Although you can hire people to do this, it can be quite expensive. Take your time. So far you only invested a few hours and less than $100. If you do want professional editors, 10,000 words should cost about $200 to $400 for light editing/proofreading. Extensive editing is more.

Once you have a reasonable edit, give the book (printed on your inkjet printer) to a friend or colleague. Have them critique it. The objective is not to wordsmith at this point. Rather you want to make sure your friend understands the content. Have him or her write down questions as s/he reads it. Then have a conversation where you answer those questions. Record the conversation. Transcribe the conversation. And then paste in these refinements.

Now finalize the text. Paste in graphics that will help illustrate your points. If you have a framework, it certainly makes sense to include that. Pictures help improve readability.  I used 99designs.com to create a first graphic, and then I hired the designer to create the rest to my graphics.  But to save money, you can do this on your own using PowerPoint or any other graphics editing package.

A lot of white space also makes a book seem less intimidating. And then edit. Proofread. Make sure the text says what you want and is laid out the way you want. If you want something better looking, you can go to eLance.com and have your MS Word document converted into a professional layout for $100 to $150.  I did this for one of my self-published books.

At this point, you know the page count and the page size. You will need these for the next step.

Step 6: Find a printer…

Read the rest of this article on the American Express OPEN Forum

A while back I was interviewed by Tom Parish at EnterpriseLeadership.org.  On their site, you will find the following description:

In this podcast, Steve Shapiro, InnoCentive’s vice president of strategic consulting, talks about how InnoCentive’s open innovation model has helped companies solve the most challenging problems.

When the Oil Spill Recovery Institute in Alaska wanted to find out how to pump out the almost solidified oil at the bottom of Prince William Sound from the Exxon Valdez spill, the Institute did not turn to its researchers. Instead they posted a challenge to InnoCentive, an emerging company that specializes in open innovation also called crowdsourcing. According to The New York Times, the Institute paid John Davis, a chemist from Illinois, more than $20,000 for his idea. Davis, an expert on cement, figured that if vibrating cement can keep it from hardening, then a similar concept can be adapted to keep the oil in the tanks from freezing.

Founded in 1998 by three scientists working for Eli Lilly, the major pharmaceutical company, InnoCentive became an independent company in 2001. To date InnoCentive, companies, such as Dow Chemical and Procter & Gamble, and not-for-profits have posted more than 1,000 challenges on InnoCentive. Research areas include everything from business processes to chemistry. Steven Shapiro, InnoCentive’s vice president of strategic consulting, says that today corporations cannot depend on their internal research and development departments to solve their toughest problems. “They need to look at external resources. InnoCentive’s enables these organizations to tap into a global network of 200,000 solvers who enjoy the challenge of competing for a cash reward. Our partnership with the Rockefeller Foundation is helping to solve problems posted by not-for-profits working in poor countries.”

In this podcast, Shapiro explains the reasons for using open innovation to solve tough problems, InnoCentive’s business model for generating revenue, some of InnoCentive’s most successful challenges, the benefits of using InnoCentive, and the challenges this company faces in this economy.

You can listen to (or download) this podcast here.

According to a press release I received, “LG Mobile Phones (the fastest growing mobile phone brand in North America) is partnering with crowdSPRING (an online marketplace for creative services) and Autodesk (a leader in 2D and 3D design and engineering software) to hold a new competition to define the future of personal mobile communication.”

They were looking for people to “design their vision of the next revolutionary LG mobile phone and compete for more than $80,000 in awards.”  The top prize was $20K.

The competition ended last week, so don’t get your hopes up about winning that money.

But what this shows is that Open Innovation is taking hold in many interesting ways.

Prize-Based Open Innovation, which got its roots in “tangible” challenges (e.g., creating a new chemical compound) has morphed nicely into “softer” (and more subjective) areas like design.

Although, the cost of running this competition is probably far greater than the $80,000 in prizes, I suspect the overall cost dwarfs what would have been spent on in-house designers or consultants.  Regardless, the real value is in the breadth of ideas. Instead of hiring a few designers, they got potentially thousands of designers fighting for the prize money…and the glory of being the winner.  Quite often, the so-called “experts” do not have the best ideas.

Case in point…When I was at (the then) Andersen Consulting, a modified form of Open Innovation was used to develop a new name.  A highly paid advertising/branding company developed a list of 25 potential names.  Other names were submitted by Andersen Consulting employees.  The winning name, Accenture (means “Accent on the Future”) was submitted by an employee – not the branding experts.

In previous blog entries, I wrote about how I used Open Innovation to create my new logo and on the challenges I faced in using Open Innovation.  Open Innovation can be used for anything these days.

As an aside, what I thought was interesting about the LG competition was Autodesk’s participation.  According to the press release, “Autodesk will supply participating designers with a free 15-day trial of SketchBook Pro. Autodesk SketchBook Pro software is a digital sketchpad.” This is a nice way to get designers hooked on their product. Everyone wins in this deal.

I am eager to see the winning designs.

And I am more eager to hear when lessons LG learned by doing the competition. Fortunately, LG has agreed to answer any questions I have (ok, maybe not ANY question).

Therefore, in the name of Open Innovation…

If you have questions you would like me to ask LG, please submit them as a comment on this blog entry.  I will write a future blog entry on the LG competition and lessons learned.

One of my last blog entries discussed the need to create affordable and accessible solutions as a way of staying competitive. Given  globalization, cheap labor, and a damanged economy, this makes more sense than ever.

Here are three starter questions to ask to help you generate new ideas:

How can you productize a service? One way to make a service more affordable and accessible is to turn it into a physical or digital product; something that requires little or no human intervention. In my earlier entry, I talked about Cybersettle automating insurance claims processing. My Innovation Personality Poker enables people to recreate one of my most popular speeches/workshops. Self-assessment tools can reduce reliance on consultants. Remote diagnostic technologies can speed medical exams and pre-qualify patients before they come to the doctor. Legalzoom.com offers affordable legal advice for people who might otherwise not seek counsel. TurboTax simplifies tax filing. Experts convert their intellectual property into books, mp3s, DVDs, digitally delivered training (including eLearning) systems, or online databases. The possibilities are endless.

How can you offer a low-cost product/service? In an earlier blog entry, I quoted Antoine de Saint-Exupery, author of The Little Prince, who once said, “Perfection is finally attained not when there is no longer anything to add but when there is no longer anything to take away.” I love that.  Ask, “Why are people really using our products/services and what are the bare minimum ways of delivering the desired outcome?” $300 netbooks are stripped down computers because most people want to do word processing and surf the net. Tata is offering a $2,000 car in India (ok, maybe that is a bit too scaled down). Ernst & Young Consulting (now Cap Gemini) once offered a subscription service, Ernie, which provided small businesses with a low-cost alternative to high priced consulting. Dow Corning, the maker of silicone-based products, created Xiameter, an internet-based division that sells product only in bulk… with no call centers.  Which features, services, or qualities can be reduced in order to tap into a new market?

How can I make my product addictive? Drug dealers know that if you get someone hooked on your product, they will come back to buy more. This strategy can be useful for attracting – and retaining – customers. Last month I spoke with the CEOs of three software companies. The one strategy that was pertinent to all three was the development of a stripped down version of the software…and potentially offering it for free. The idea is to get the customer hooked and using the software on a regular basis. Then as the customer’s needs grow, they will need to upgrade (note: this is not the same thing as offering something free today and then charging in the future). I worked with a major computer manufacturer many years ago where this concept was applied. Their flagship computer was (let’s call it) the “F” series. But that was too expensive for most companies, so they introduced a much slower and less expensive computer – the “E” series. Interestingly, the two models were 100% identical except a computer chip was added to the “E” to slow it down. The company knew that many customers would eventually want an upgrade, and they simply pulled out the chip and charged an exorbitant fee.

All three of these strategies move your innovation to the left-hand part of the bell curve (above) rather than the right. All three can be used by any company to augment their existing products and services.  The point is to make your “core competency” available to a broader market – without negatively diverting energies.

I will be including more strategies in future blog entries.

In today’s Wall Street Journal, there is a good article about South Bend, Indiana-based Memorial Hospital’s Innovation Cafe.  The article starts off…

Hungry visitors to Memorial Hospital here sometimes cross the street to its Innovation Café, lured by the outdoor patio with white metal tables and chairs. Inside, however, all they find is fake food and a blackboard listing “recipes” such as “Basic Ingredients for Innovation.”

The Innovation Café is an unusual teaching laboratory created by Philip A. Newbold, the veteran chief executive of this midsize community hospital and health system. He converted a failed delicatessen into a venue where staffers and outsiders can learn to craft new ideas.

In the middle of the article, there are some interesting facts and figures…

He persuaded his employer to become the first U.S. community hospital with an innovation research-and-development budget. The board committed up to 1% of annual revenue for innovation activities. That equals about $4 million a year. The hospital ended up spending just $195,000 in 2005, $622,000 in 2006 and $711,000 in 2007 on innovation efforts such as venture start-up costs and staff training. But the increase in related operating profit was as much as three times the annual expenditure.

These innovation incubators are a great idea. 

But, as the article mentions, the one challenge that can result is too many ideas.  That is why I am a proponent of combining this concept with an Innovation Center of Excellence and “challenge-based” innovation.  To learn more about these concepts, read my article in the European Business Forum. In fact, while you are at it, read all of my innovation articles.

Today’s blog entry gives you three feature articles with my thoughts on innovation.  Unfortunately, I have no idea what they say! 

One article is from “Computerworld” in the Denmark (scanned in by a colleague there).  Another is from “High Tech Analysis” in the Netherlands.  And the last is the cover story from “inMarketing” in Thailand.  If you can read any of these languages, you might enjoy the articles.  If not, you might just enjoy the pictures.

Computerworld (Denmark) (pdf – scanned from original)

High Tech Analysis (Netherlands)  (pdf – click here to view original online flash version)

inMarketing - Article #1 (Thailand) (pdf)

inMarketing - Article #2 (Thailand) (pdf)

(click cover to view larger version)

We often make decisions based on emotion rather than logic. Especially in times of crisis (like our current financial situation), we choose options that address our “pains.”

Most people are feeling a pain at the pump with gas prices topping $4 a gallon in the United States; higher in other countries. If you own a gas guzzling car, you are really feeling the pain.

Newspapers have reported the following:

• SUV owners are selling their trucks and buying more fuel efficient cars to save some money.
• Chrysler is offering a $2.99 a gallon for 3 years deal with a new car (up to 12,000 miles a year).
• The Toyota Prius is selling at record levels and can not be kept in stock.

Given high gas prices, these all seem like good ideas.

But (from a financial perspective) are they really?

My SUV gets 18 miles per gallon (mpg). I bought it in 2005 right before a cross country book tour through treacherous winter conditions. I needed a vehicle that could handle the worst snow. I love this car and would rather not trade it; Massachusetts winters can be miserable. But paying over $100 to fill the tank is getting to be too much. And with the economy, money is tight for everyone.

Should I trade my car? Emotion tells me, “Absolutely.” Logic tells me, “Maybe not”.

The trade in value of my car is $16K with 30,000 miles in excellent condition.

My dealer is offering a $2,500 rebate on the car I would trade for. The total price after taxes would be $21K. The car gets 28 miles per gallon. FYI…my SUV is a nicer car that retails for $33K new, so I am trading down.

Is spending $5K (and trading down) to save gas money a good deal?

Assuming gas prices climb to $5 a gallon, my break-even point is 4 years. That is, it would take me 4 years of driving 36,000 miles a year before I saved $5K in gas. Not exactly the return I was hoping for.

A $2,500 rebate is nice. But is it as good as Chrysler’s $2.99 a gallon gas deal (up to 12,000 miles a year for 3 years). Which feels better? Many feel that the Chrysler arrangement is a better one.

As it turns out, you should take the rebate up front. A car that gets 28 mpg would save $2,5000 over 3 years with the Chrysler deal (again assuming gas climbs to $5 per gallon). Most of their cars get worse gas mileage, so you would save even less. Therefore the $2,500 rebate is a better deal – unless gas prices soar beyond $5 per gallon.

What about a Prius?

The base Prius is $25K (if you are lucky – no discounts here) and it gets a whopping 46 mpg.

What’s the break even point for me? I would have to drive the Prius for four and a half years before I got my money back.

The creative option might be to trade your used car for another used car of the same age. If you work it right, you can come close to breaking even on the trade while saving the gas money. If saving money now is important, that is the smart move. Of course driving less – riding a bike, car pooling, taking the bus – are also good ideas.

I realize that there are many other factors to consider, such as the environment and long-term savings. But most people are making these decisions because of short-term gas prices. People are spending thousands to save hundreds. Emotion is prevailing over logic.

During recessionary times, focusing on customer pain can make your product or service more appealing.

My “How to Use Innovation to Recession Proof Your Business” is now one of my most popular speeches.

Address the emotional concerns before addressing logical issues. As Aristotle once said, “Ethos, Pathos, Logos.” And if you don’t know what that means, read my blog entry on that topic.

Which will help your business be more successful: statistics or probability?

Underwriters at insurance companies use statistics to assess future risks. This is based on years of collected data.

Probability is what card counters in Vegas use to increase their odds of success. This is based on real-time, real-life experience.

If you want to play it safe, use statistics. If you want to win big, use probability.

There Are Lies, Damned Lies, and Statistics – Mark Twain

Businesses are increasingly using statistics to manage decision making, as evidenced by popular books like Tom Davenport’s Competing on Analytics and the boom in CRM system usage.

The belief is that if we gather more data we can make better decisions. But this may not be true when it comes to innovation.

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 on YOUR customers.  This represents the middle of the bell curve or the norm. This information may be useful in “incremental” improvement, but it will rarely lead to significant innovations.

When you move beyond the norm to the far ends of the bell curve, you will find the real interesting ideas.

Being normal is not a virtue; it denotes a lack of courage

On the far right-hand side of the curve are the market leaders; the advanced users. They may not be your customers because you can’t meet their high-end needs. Or maybe they were once your customers and they left. When someone is not a customer it is difficult to gain insights into their wants and needs. If you could somehow understand their perspectives, you may find opportunities for “advanced” innovation and insights on where the industry may be going in the near future. These innovations would be more radical, yet continuous in nature. Think of this as the Blu-ray improvement on the standard DVD (we’ll save a discussion on the demise of HD DVD for another time).

On the far left-hand side of the curve are the laggards; the less sophisticated users. Your products/services may be too advanced, too complicated, or too expensive for their needs. Again, you are probably not gathering statistics on these individuals or organizations. But here lies the greatest opportunity for discontinuous innovation.  Or as Clayton Christensen would call it, disruptive innovation.  If you can find a way of “dumbing down” your offering, you might find new and untapped sources of revenue. Quite often these products become the de facto standard, much like when PCs replaced the more sophisticated mainframes and mini-computers.

The problem is, it is very difficult to get data about the ends of the bell curve. Focus groups, surveys, and other traditional data gathering techniques are useless. I love this quote from Scott Cook at Intuit: “For every one of our failures, we had spreadsheets that looked awesome.” We can use numbers to justify anything we want. But quite often they justify the wrong actions.

The Probable is What Usually Happens – Aristotle

If a statistics-driven innovation model does not work, what would a probability-based model look? Probability tells me that if everything is equal, the more bets I have, the more likely one will be successful. The odds of 1 success out of 200 are greater than 1 success out of 20.

But how can you have more bets without diluting your effort and potential returns? The key is to learn as you go. This is exactly what card counters to.

Let’s contrast a more statistics-driven model with a probability-based model. To do so, we will use two exceedingly simplistic examples. With innovation model #1, you make a few “big bets” based on analytics you gathered from your customers (a statistics-driven model). Innovation model #2 is a more experiential “learn as you go” model (a probability-based model).

In both examples, let’s assume you have $100 million to bet, woops, I mean invest in innovation.

Innovation Model #1 – Big Bets: This is the most common approach and is highly driven by statistics. You identify a number of large innovations you want to invest in. For this example we’ll use 20 projects @ $5 million each. No matter how much data you have, most innovations will fail. And of the successes, most will not achieve the predicted ROI. In the end, if you are lucky, you’ll have 3 wins out of 20. This feels like putting all of your money on 35 black on the roulette table and crossing your fingers. Your successes/wins had better pay out big to cover your losses.

Innovation Model #2 – Learn As You Go: Let’s look at a different model. What if instead of 20 large projects, you have 200 smaller projects. Again, you know that most of these will fail – but you don’t yet know which ones. You initially invest a small amount ($10M or $50K per project) to test the ideas as low-risk, low-cost experiments. Based on this experience, you decide that 40% (80) of the ideas still show some promise. But you are not yet ready to bet the house. This time you allocate an addition $20M ($250K each) to do further testing. You now eliminate 70% of the projects, keeping 24 alive. You now invest another $20M (nearly $1M per project). Of these 24, you decide that 5 are real winners. At this point you have only spent half of your money and yet you were able to eliminate 195 ideas. That’s incredibly valuable information learned by doing rather than by analyzing. You now invest the remaining $50M on those 5 ($10M each).

With innovation model #1 you must “guess” which ideas will be successful up front.  HP is moving to this model by consolidating 150 ventures into only 20. This feels like a bad bet.  What if the 20 they chose all turn out to be duds and that the real winners were in the 130 they eliminated?

With innovation model #2, you make lots of small bets. And as the odds of success improve, you increase your bets. This is the business version of card counting. As you get to the end of the deck, you have “real life” information that guides your bets. As the odds of success increase, you increase your bets. This method works. Just ask the kids from MIT who won millions card counting in Vegas and will make millions more with their new movie, 21.

Today I was quoted in CIO magazine’s article entitled, “The Role of IT in Innovation: Friend or Foe?” (click the title to read the article)