How Candy Makers Helped Develop the iMac

I love it when companies are able to find solutions to problems in non-traditional places.

I was recently at a conference where someone said that Apple was having difficulty making the clear, colored plastic that adorns the iMac. None of the plastic manufacturers could find a solution that could make the product hard and durable enough.

Where did they look for solutions?

Candy manufacturers.  They can make hard and clear delights in a lot of different colors…just like the iMac.

When you are stuck and can’t solve a problem, look somewhere else.

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Lessons of Pawn Stars

Yes, you read that correctly.  PAWN Stars.

This reality television show on The History Channel chronicles a pawn shop outside of Las Vegas.  I enjoy the show because of the history associated with the pieces that are brought in for sale.  In addition to rifles from the revolutionary war and antique political documents, people bring in some unusual items like old videos games, dilapidated cars, and various novelty items.

After watching the show a bit, I gathered four practical lessons that Rick Harrison, the owner, uses when purchasing items:

1. Liking/wanting an item does not make it a good purchase; it must make money
2. Just because something is rare does not make it valuable
3. Look at the size and analyze if something else could make more money in the same space
4. Speed of sale is critical; consider the buyer’s market.  In down times, luxury items sell slower

These are also good lessons for any innovator.  Here are the innovation corollaries to the Pawn Star buying principles:

1. Do not get enamored with your ideas.  Just because something “feels” good does not make it a good investment.  Innovators often get “attached” to their creations and then blindly push forward.  Knowing which ideas will create money is critical.  Knowing which ideas to kill is a powerful skill.
2. Just because it is different does not make it valuable.  Recognize that novelty does not translate to value.  If you don’t have any buyers and it does not serve a specific need, you should not invest in it.  This is not a game of “innovation for innovation’s sake.” Too many companies say they want to innovate, but don’t really know why or how.
3. Not all innovations are created equal.  What solutions can create exponential value?  What are the leverage points in your market?  What products or services could transform your industry?  Although you don’t want to only “swing for the fences” (that is, don’t solely focus on game changers; incremental innovation is also critical), make sure you invest your resources wisely with a balanced portfolio and a good risk/return profile.
4. Above all, consider the buyer.  This is innovation 101.  The market must tell you where to invest.  In today’s economic condition, solving a pain is more important than providing an abstract benefit. In other words, be the aspirin for your customers’ pains.

Insights can be gathered from anywhere. Today I looked to a pawn shop. In the past, I was inspired by an expired bottle of mayo. Where else have you discovered new ways of thinking?  Innovation is everywhere.

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One Small Step for Your Business, One Giant Leap for Success

Quite a few books and studies recently have touted the power of incremental change. Small actions can have a huge impact on long-term business growth.

The appropriate degree of change needed for innovating within organizations is, in general, a 45-degree change, consistent but not too radical. That tends to be more effective than a 5-degree change (purely incremental) or a 90-degree change (radical).

Feeling good about it

People feel good when they accomplish something, even if it is small.

If you increase motivation, you improve overall performance and creativity, according to Teresa Amabile, Harvard Business School professor. In The Progress Principle, she makes a compelling case for why small successes contribute to motivation.

Small changes implemented over a long period of time compound their value and are the keys to long-term success, according to Darren Hardy, the publisher of Success Magazine. His book, The Compound Effect illustrates his perspective.

A good example of the compound effect is a slow and steady approach to weight loss, which has more sustainable results. Instead of trying to lose weight quickly through restrictive diets, become aware of the foods you put in your mouth. This awareness helps you make small adjustments, which have a significant impact in the long term.

We’ve all heard about compounding when you’re investing in retirement accounts. Start early, even if you invest small quantities, to take advantage of compounding.

Getting it done

An old study compared Japanese cost-reduction programs to similar ones in the United States. Japanese companies on average had 300 times more suggestions per employee, yet the average value associated with each idea was only 1/50 that of the U.S. companies. However, in the end, the Japanese companies saved 20 times more per employee than the U.S. companies.

This report indicates why so many idea-driven innovation initiatives fail. Instead of asking for small, incremental changes that we can implement quickly with little or no funding, most U.S. efforts ask for larger changes that require time and investment. The Japanese companies had a rate of adoption and implementation almost three times higher, with an eight times higher participation rate.

Making small changes to great effect

Making small changes is a good habit for companies and individuals to adopt. I developed a very simple technique called “3-cubed 30.”

In a nutshell, three times a week, implement three activities to help your business grow. Each of these should take less than 30 minutes. The investment per week is a maximum of 4.5 hours, yet the benefits can be huge. In reality, it will only take about two hours most weeks to complete all nine tasks.

Here’s what this looks like in my business…

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

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You Don’t Hear Your Customers

The other day, I asked my business manager to follow up with a client about an unpaid invoice.  She contacted the company’s accounts payable department and was told that the invoice was paid on June 1st, 2012. (italics added for emphasis)

OK, I have some pretty talented clients, but I don’t think any have mastered time travel…yet.  It is only the first week in January.  There is no way they could have paid (past tense) an invoice 6 months in the future.

So obviously my client miscommunicated.  Or did they?

What my client actually wrote was that the “invoice was paid 6/1/12.”  To my American business manager, this was clearly June 1st.  But to my European colleagues, they would interpret this as January 6th.  In the US, our date format is mm/dd/yy; in Europe it is dd/mm/yy.

Although this is a very simplistic example, it clearly demonstrates how biases – cultural, language, experience, etc – significantly impact how we perceive the world around us.  And most people are unaware of the fact that they do not truly see things to same way as they occur to others.

In the world of innovation, this can have an impact on how we understand customer needs.

We think we know what they want.  But what they are saying is always interpreted differently than what they really mean.

I like the story told by Professor Chris Parker of the University of Lucerne about a tribesman from a remote part of Malaysia who was taken to Singapore for the weekend as part of an anthropological study. It was his first exposure to the outside world. After a tour of the bustling city, his guides asked him what had struck him most about this place, one of the great high-tech centers of the world. The tribesman said without hesitation that the biggest surprise was a wheelbarrow that he had noticed being used to haul a large quantity of bananas, more bananas being hauled by one conveyance than he had ever seen before.

All the computers and all the mobile phones on the technology-mad island meant nothing to him. He was most impressed by nothing more sophisticated than the big wheelbarrow because in his world, what mattered still focus on basic gathering and distribution of food and water. The digital world has yet to have any bearing on their lives. The technology of choice for this tribe would be a consignment of new wheelbarrows. Of course, in the context of business, technology is more sophisticated than the wheelbarrow, but no more important to its success.

How you see the world is different than how others will see it.

It reminds me of a scene from the movie, “The Gods Must Be Crazy.”  A Coke bottle is interpreted many different ways by those unfamiliar with glass.  To most of the world, it is obviously a Coke bottle.  But if you have not seen one before, it means something entirely different.

Assume you don’t understand what your customers really want.  Poke.  Probe.  Ask clarifying questions. Have them tell you stories that help elaborate.  Ask “why” they want a particular feature.  Look for alternative perspectives and meanings.

Maybe your customers really only want a bigger wheelbarrow.

P.S. This technique applies to family members and friends.  Don’t assume you know what your spouse or kids are saying.  Odds are, you are not really understanding them.

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How Oprah Nearly Killed My Business

My book, Goal-Free Living, was featured on the cover of the November 2005 issue of O, The Oprah Magazine. Two full pages were dedicated to my goal-free concepts. (If you check out the cover left, you’ll see the headline “What the happiest people know for sure.” That is my article.)  

Although this was one of the proudest moments in my life, surprisingly, this type of publicity actually had a negative impact on my business.

You must be thinking: How is this possible? Doesn’t everything Oprah touch turn to gold?

Yes, typically. But my situation was different. My core buyers were (and still are) innovators within corporations. As much as I personally admire Oprah and her work, my clients were not as enthusiastic.

For example, after putting the Oprah mention on my website, my bounce rate (the number of people who immediately leave my website) went through the roof. I had potential clients say that they chose someone else who appeared to be more focused on the needs of corporations. They proceeded to share that the Oprah mention made me seem less “serious.”

I even had one client tell me, just as I was about to go on the stage, “If you mention Oprah, we won’t pay you.”

Apparently, the combination of my “self-help” book and the magazine publicity caused confusion. It was no longer clear that my main business focused on the needs of corporations. In this moment I discovered that the old mantra was true: “A confused buyer never buys.”

There is a lesson in this for every small business.

Know your audience. Know their needs—explicit and latent. Speak their language. Understand what gives you credibility in their eyes.

When you innovate, don’t alienate your current market. You can expand to other markets, but continue meeting the needs of those who have been loyal fans.

Innovation is about shifting your business in a new direction at the right speed. Think of the degree of change as a compass setting.

Reinvention is different than innovation. Reinvention (what I attempted when writing Goal-Free Living) is when you move your business on a 90-degrees (or even 180-degrees) turn. It is a pretty radical change. Your customers may not understand the shift and you may lose them in the process.

On the other side of the compass, there are many businesses making only 5-degree turns. They focus their time on incremental innovations. Although these improvements are valuable, on their own they are not sufficient to sustain long term growth and prosperity. You can ride your past success for a while, but eventually your competition will out-innovate you.

So the big question is: What is the right level of innovation? What is the correct compass setting for your business?

Typically, a 5-degree turn is too little while a 90-degree shift is too much. Forty-five degrees should be just about right.

What does a 45-degree turn look like? It is exploring how to tap into your existing market with new offerings, new services and new products, while also expanding into adjacent markets.

My business just turned 10 years old and I am in the process of rethinking my current model. As it stands today, I primarily convey my innovation messages via speeches and books. My objective in 2012 is to leverage my current intellectual assets by finding new ways of delivering my content.

For example, in 2012, I will be expanding the licensing of my content to corporations, training organizations and individuals who can deliver my work. The more I can tap into the reach of others, the more I can grow my business.

For this, I am not changing my message or products. I am primarily deepening the content and making the process of delivering it “replicable.” Instead of content changes, I am exploring different distribution channels such as eLearning systems, membership sites and other digital platforms.

Additionally, while others are delivering my content to my current target audience, I can explore how to extend my existing content to new, tangential markets. For example, my Personality Poker assessment tool has been largely focused on the corporate market. It can also, however, be positioned to provide value anywhere collaboration is beneficial: relationships, families, negotiations, ventures and so on. Expanding in these directions still positions me as a collaboration expert (a key component of innovation) and would most likely not alienate my core market…

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