The Innovator’s Dilemma and the US Economy

Clayton Christensen, in his book The Innovator’s Dilemma, discusses how disruptive technologies will kill incumbent technologies. Basically it is about how the crappy and cheap will eventually take over the sophisticated and expensive.

The well-worn example is in the computing world.  The PC (which until recently cost thousands of dollars) killed the dominance of the mini-computer and mainframe (which then cost tens of thousands of dollars).  The new $300 netbooks may eventually become the dominant computing platform.  Or maybe a $100 mobile phones will eventually replace computers altogether.

The dilemma arises because most companies focus their innovation energies on building faster and more sophisticated technologies: becoming bigger and better.  That is, they move towards the right of the graphic above.  Unfortunately, the newer, cheaper developments - even if they are lower quality (in the beginning) and don’t perform as well - will ultimately be the winners.  Or in other words, the left part of the graphic above.

The US Economy Dilemma

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Relearning What You Know

The blog here has been quiet for a while. I was overseas for the past 2.5 weeks having a fantastic time. A handful of days in Lisbon (my favorite photo from my travels is pictured left). A week in England. And a few days in Oslo.

It was my first time to both Lisbon and Oslo. They are lovely cities.

And of course I always love visiting London. I lived there for four years. However, there is always something a bit disconcerting about being in the UK.

I have been driving a car in the states for nearly 30 years. I know how to drive. I drive well. And I don’t need to think about driving when I drive. It just comes naturally.

But when I am in the UK, that’s a totally different story.

The cars there have the steering wheel on the right-hand side. You drive on the left side of the road and pass on the right. Roundabouts (rotaries) go clock-wise. And for manual transmission cars, you shift with your left hand.

The task of driving a car in the UK is almost identical to driving a car in the US. But for me, the experiences are TOTALLY different.

I need to concentrate when I drive in the UK. When turning, I need to remember to go wide when turning right. I find it hard to judge the end of the car. While driving in South Africa last year, I came close to killing everyone in my car on several occasions.

It’s amazing how we can become very good at something. But when one thing is changed, we become incompetent.

Think about your job. Think about your life. What do you do well? What are you able to do without thinking, because it comes naturally?

Maybe these areas of your life and business represent blind spots. Places where there is an opportunity to grow and learn.

Steve Jobs, CEO of Apple Inc, once said, “Creativity is just having enough dots to connect… connect experiences and synthesize new things. The reason creative people are able to do that is that they’ve had more experiences or have thought more about their experiences than other people.”

If creative people think more about their experiences or have more experience, then it is possible that the more you are on autopilot, the less creative you are.

What are the routines in your life? What small, subtle pieces can you change to fundamentally change the experience?  Remember, you don’t need to change everything, just something that moves you from unconsciousness to consciousness. I still know 99% of the skills required to drive a car.  Only 1% needs to be changed to cause me to think.

Visit a country where you don’t know the language. Change an aspect of your job so that you need to be more present to your actions. Speak with people you normally avoid. Change one attribute of a routine.

Do you want your organization to be more innovative? If so, your people need to get more comfortable with change.  Start by introducing small changes. Every morning, write down one small change you want to introduce into your day. Have everyone on your team do the same thing. Make the changes small. They should take little or no time.  They should be easy enough so that people will actually incorporate into their day.

If everyone on your team starts to introduce small changes on a regular basis, they will get used to frequent small changes.  And then, infrequent large changes won’t seem like such a big deal.

Predicting the Next Meltdown

I just got back from over two weeks on the road. I was in and out of five airports. As you go through security, the routine is always the same…

- Take off your shoes
- Take out your liquids
- Take out your computer

Why are we put through these security gymnastics?

On December 22. 2001, Richard Reid was caught with plastic explosives in the soles of his shoes. That’s why we now have to walk barefoot through airports.

On August 9, 2006, two dozen people were arrested in the UK because they were plotting to bring liquid explosives on planes leaving Heathrow airport. Now we have to travel with miniature shampoos, shave creams and toothpastes.

Computers are scanned because, well, that’s the obvious place to look. I guess.

What do these have in common? For the most part, the security scans we now endure were due to cleverness on the part of terrorists. Rarely are we subjected to scans that are due to the cleverness of government agencies.

Are there ways to easily smuggle weapons on planes in spite of our increased security? Of course. Nearly every time I pass through a metal detector, I have metal collar stays in the dress shirt I am wearing. Although the detector never beeps, these could easily have been turned into razor sharp weapons.  Does this mean that next week I will have to travel topless through the airport?  Good thing I have been working out.

Give me 15 minutes and I could rattle off dozens of other, more sinister ways to smuggle weapons on board.

Reactionary Innovation

This is a reactionary approach to business.

The current financial situation also demonstrates a reactionary approach to business. Enron has a meltdown. What should we do? Implement ridiculously stringent rules like the Sarbanes-Oxley act. Our financial institutions start to falter. OK, let’s spend $700 billion of the tax payers’ money to sort out the mess.

I’m not saying that these rules and legislation are good or bad (or ugly). That’s a conversation for another time. But I do find it ironic that the “big ideas” always seem to come in response to some tragedy. They are rarely proactive.

What does this have to do with innovation? Everything.

Most organizations use creativity to help them determine what to do next. They brainstorm ideas, select the best solutions, and then implement the most promising ones. Creativity is used to determine what your company or organization will do next.

Predictive Innovation

But in these rapidly changing times, creativity can be equally (if not more) valuable for determining what the marketplace and your competitors will do next.  Or, if you are the government, it may help determine what your banks and terrorists will do next.

When is the last time you had a brainstorming session where you asked the following questions?

• What are we most afraid our competition will do to us?
• Who is not a competitor now, but might be in the future?
• What shift might happen in the buying habits of our customers that may make our product/service less appealing?
• How can the sagging economy help our business?
• What emerging products or services may make our business irrelevant?

The list of outside-in questions can be endless – and valuable.

In your next brainstorming session, try the following:

• Brainstorm your own list of questions, building on mine above.
• Determine which ones you want to tackle first.
• Brainstorm, using a variety of creativity techniques, to identify “possible” outcomes.
• For those which are deemed plausible, brainstorm a list of “triggers” for each. These are market conditions that tell you that the given scenario is moving from “possible” to “plausible.”
• Set up a corporate “radar” system to help monitor external conditions. Have everything in place such that you can implement critical ideas when market conditions dictate.

This approach blends creativity with scenario-based planning . It helps you move from reactive solutions to proactive solutions. And in today’s volatile world, this might just be the key to your long-term survival.

P.S.  If you want to see where airport security is heading, visit Ryanair’s website.  For adults only.

Personality Poker Sampler

Want to try out our Innovation Personality Poker? Now, due to popular demand, you can get our sampler for only $30 postage paid.  You get one deck of 52 cards (good for 5 to 10 people depending on how you play) and a Quick Start Guide.  Only one sampler kit per customer. US orders only.

Of course, you can order the full set with the 100 page instruction manual, 6 decks of cards, and an instructional video for only $200 postage paid at our 24/7 Innovation Store.

Dot Versus Line Thinking

A while back, Seth Godin wrote a piece that I just read this morning. It is entitled, “In the face of change, the competent are helpless.”

He said that, “Competent people have a predictable, reliable process for solving a particular set of problems. They solve a problem the same way, every time. That’s what makes them reliable.”

He continued, “Bob Dylan, on the other hand, is an incompetent musician… unlike a truly competent musician, Dylan never delivers a song the same way twice. No, Dylan isn’t competent. But he is brilliant.”

He then went on to say that because competent people are reliable and solve a problem the same way, every time, they cannot handle change.

Although I personally do not like the use of the words competent versus incompetent, I agree with his underlying message. In some respects, this is his version of my expression, “Expertise is the enemy of creativity.”

The more you know something, the more difficult it is to do it differently.

The point is, the more you focus on doing things right, the more difficult it becomes in the long run to do the right things. The ability to adapt and change is one of the most important competencies of any organization. In the name of “quality,” quite often, adaptability is thrown out the window.

Here is an excerpt from my “24/7 Innovation book,” originally written in 2002. The last three paragraphs describe my perspective on the two primary thinking styles: “dot” and “line” thinking.

Excerpt from 24/7 Innovation Introduction

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