Innovation Lessons from Around the House

Last night I was hungry and decided to make some tuna fish. I opened my refrigerator and found an 18 ounce squeeze bottle of mayonnaise.  As I started to make my meal, I realized that the mayo had expired 6 months ago. I guess I don’t use it very often because the bottle was still 90% full.

After throwing out my expired food, I realized that there is a lot to learn from things we take for granted around the house.  Here are just three thoughts I had this morning…

Fail Cheaply – Although Costco is one of my favorite stores, I rarely buy perishable items there because I can’t predict how much I will use. Sometimes, as is the case with my mayo, buying the smallest size and paying a premium is better than saving money on larger quantities. Smaller quantities result in less space used, less waste when things don’t work out, and lower costs all around. In business, your best bet is to become masterful at creating small, inexpensive and scalable experiments that give you insights into the real world…not just backroom-based predictions. As you gain new insights and become more confident that a new idea will work (i.e., there is greater predictability), then you can ramp up and go for efficiency.

Sell One, Make One – I debated using a different example for this… One situation no one ever wants to be in is sitting on the toilet and running out of toilet paper. The best solution is to always have a spare roll within reach. When the main roll is finished, the spare role is put into the dispenser, and the backup roll is replaced. This is an example of a simple manufacturing technique called “sell one, make one.”  To avoid running out of product, companies often produce large quantities of inventory. But as we saw in the “fail cheaply” example above, this can lead to waste. Items that don’t sell need to be liquidated at significant discounts. In the meantime, the inventory takes up space and hurts your cash flow. Instead, if you get your manufacturing process (or your innovation implementation process) efficient enough, you can make one immediately after you sell one – that is, when you sell one, you make one. You will never run out if demand never exceeds your ability to manufacture.

Lather Rinse But Don’t Repeat – Shampoo bottles are famous for telling you to lather, rinse, and repeat. I have been doing it every morning without thinking. As an experiment, I tried skipping the repeat step. No difference. I even experimented with using less than one pump of shampoo. Same result. Sometimes we take on wasteful activities because we never through to step back and question them. I reduced shampoo usage by 75% without any impact on my hair. From my experience, most companies can reduce wasteful activities simply by questioning what has always been done in the past.

Here’s something to try. Every day, find something interesting around the house…

• It could be the upside-down ketchup bottle (what took them so long to come up with that idea?).
• It could be the laundry detergent that is super concentrated so you use 75% less liquid, meaning less packaging and easier carrying.
• Or maybe it is the Clorox Disinfecting Wipes that impregnate paper towels with cleaning solution to simplify cleaning.

After selecting your innovation, see how that concept could be applied to your business.  Do not look for ways to apply that specific product.  Instead you want to apply the thought process that was used in developing the product.  For example, with the Clorox wipes, where in your business can you combine two distinct items (products or processes) to create something that is simpler and more efficient.

The purpose is not necessarily to find new ideas (although that would be nice).  Rather it is a great way to exercise your creativity muscle.

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.”

Or, in my words, creativity is about “collecting and connecting” dots.

This daily exercise will help you become more observant (collecting dots).  And it will help you become masterful at connecting dots.  All of this will help you become more creative every day.

For more on my perspective on creativity, read my article on “Dot Versus Line” thinking

How To Build Innovation Networks

According to David Strom, a web/tech expert…

“Burger King ran a promotion not too long ago where they asked people to defriend 10 Facebook friends in order to get a coupon for a free burger. They were swamped with thousands of requests, thereby establishing the value of a friend at somewhere around a quarter. That is pretty depressing. I always thought a friend was worth at least a couple of bucks, if not more.”

This got me thinking.  How do we value friends?  And are all friends valued the same way? I have nearly 400 Facebook friends.  I try to only befriend people I really know.  But admittedly, some are friends of friends and I don’t know them at all.  In reality, there are only a handful of people that truly interest me.

My experience mimics that suggested in this fascinating article on how the virtual Facebook world mimics the physical world.  Although we may have hundreds of friends on Facebook, there are indeed only a handful that we maintain intimate relationships with.

Dr Robin Dunbar once suggested that humans can only have a stable network of about 150 people, also known as “the Dunbar number.”

The article shares some interesting statistics…

• The average person has 120 Facebook friends.  This is interestingly quite close to the Dunbar number.
• Men generally respond to postings of only 7 of those friends by leaving comments on photos, status messages or “the wall”.  Woman respond to 10 friends.
• With two-way communication, men only chat/email with 4 people, while women communicate with 6.
• Among those Facebook users with 500 friends, these numbers are only slightly higher (but not proportionally higher). Men leave comments for 17 friends, women for 26. Men communicate with ten, women with 16.

I find this quite interesting.  And it has interesting implications for building innovation networks and communities.

When working with an organization, I often put in place innovation “Centers of Excellence” and “Communities of Practice.” We find these are very helpful in spreading the innovation gospel into smaller, more manageable sized groups.  The research above demonstrates to me why it works so well.

While at Accenture (then Andersen Consulting), we used a similar model to build the skills of the consultants. My area was called “Process Excellence” and involved the building of innovation skills.

We created a Process Excellence Center of Excellence with 100 people.  These uber-experts were dedicated 100% to our team.  We had responsibility for their professional development and the P&L of the group.  We even split these into smaller groups based on geography and specific competencies.  This created even smaller, more cohesive groups.

We then developed a “Community of Practice Leadership Group.”  This group was comprised of 30 people. These individuals were dedicated to other parts of the business (mainly industry programs).  We were only responsible for giving them to tools necessary to lead their communities.  Leaders were selected based on their existing Process Excellence skills and their geography.

Each leader had about 50 people on average, giving us about 1,500 people in the Process Excellence Community of Practice.

At the lowest level, we had 20,000 consultants that were recipients of the training that was developed by the Center of Excellence and delivered by 150 experts hand-selected from the Community of Practice.  These sessions were delivered in small group settings with a dedicated point of contact available for post-training follow-up and mentoring.

Using this approach, we developed a powerful 20,000 person practice in only a matter of months.  Although this group accounted for almost 40% of the consultants in the company, it was one of the most active and sought after communities.

Instead of trying to create huge, faceless groups, look for opportunities to build smaller, more active communities.  Find ways to create intimate relationships between employees, customers, and vendors.

Look at your networks.  Is there an abundance of activity and dialogue?  If not, you may want to look at the sizes of your teams.  Yes, size does matter.

If you have not yet read my article published in the European Business Forum, be sure to read it now.  It gives more insights into this “community” concept.

The Updated Innovation Bell Curve

In a previous blog entry on the innovation bell curve, I presented a bimodal distribution curve rather than a bell curve.  I did this because I wanted to clearly show the contrast between the existing model and the emerging model.  I also did this because I am “graphically challenged” and I could not find a way of illustrating the movements in one chart.  However, the changes are more subtle than a total shift to a bimodal curve.  After working with a talented graphic designer for the past week, we finally have a more accurate depiction of the movement taking place.

You see the 3 main movements:

1. Value brands are increasing their quality (including ease of use) and are moving into the Mid-Market area
2. Consumers are increasingly buying value brands (e.g., store brands) as a way of saving money
3. Premium brands are reducing prices while also offering different, lower-cost products.

The result is pressure on the Mid-Market brands that is squeezing many of these companies out of business.

Be sure to read all of the articles on the innovation bell curve to get a better understanding of the shifting dynamics.

Why Being Self-Centered is Good

This may seem like an odd blog entry, but it has been the topic of conversation over many dinners recently.

Although we are taught from a young age that being self-centered is a bad thing, I think that more people would benefit from being this way. Let me explain.

To start off, I am not suggesting that people should be selfish. I think of selfish as being “exclusively concerned with oneself.”

Being self-centered – in my opinion – is entirely different.

Centering is what you base your life on.

My parents are children-centered. For them, my sister and I are the most important part of their life. They live vicariously through us.

I have friends who are spouse-centered. They do everything in their power to please their partner.

Too many of my friends are work-centered. Their job is the most important aspect in their life. They get meaning from their career. It is no surprise that men are twice as likely to die during their first five years of retirement, than they are prior to retirement.

Others are service-centered. They give their lives to charity and others. They sacrifice their own well-being in the name of contribution. Oprah may fall into this category. One of the reasons she claims she put on all of her weight is that she did not spend enough time taking care of herself.

Which leads us to the benefits of self-centering.

Throughout your life, there is only one constant. You. Your children may pass away before you do. Your spouse may, in spite of all of your loving, leave you. Your job (as many people are finding out) is only temporary. Even service to others can be fraught with challenges.  If you center on someone or something else, you may be giving up control of your life.

Only YOU will be around for as long as you live.

Therefore, instead of centering your life on someone or something that may not be around as long as you, maybe you should try being self-centered. This gives you some level of stability in an unpredictable world. Even the Merriam-Webster dictionary definition – “independent of outside force or influence” – supports this notion.

Anyone who has flown on a plane has heard the flight attendant say, “If the plane loses oxygen pressure for any reason, the oxygen masks will drop down out of the small overhead compartment. If you are seated next to someone who might need some assistance, you should put your own mask on first, and then breathe normally as you assist the other person.”

Take care of yourself first. Be centered. Be grounded. Take control of your life and don’t get derailed by circumstances around you.

Being self-centered is NOT the same as being selfish. Those who are self-centered are NOT narcissistic, hedonistic, or self-absorbed. Because self-centered individuals are more grounded, they are able to give even more to others.  They have the potential to be even more generous and to make even greater contributions.

In some respects, this is in line with Maslow’s Hierarchy of Needs (pictured above). Self-actualization (which is where I put self-centering) is the highest level, higher than esteem, love/belonging, safety and physiological needs.  Interestingly, creativity is listed under self-actualization.

What do you think?

P.S. Some may argue a more theological perspective. For example, Stephen Covey (of the 7 Habits fame) authored, “The Divine Center: Why We Need a Life Centered on God and Christ and How We Attain It.” As I try to avoid religion and politics in this blog, I’ll leave this discussion for another time.

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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