September 16, 2013
Last week Apple announced their new lineup of iPhones: the 5S and the 5C. In the subsequent days, their stock dropped like the apple that fell from a tree and hit Newton on the head.
Why? Most analysts were expecting a lower priced 5C so that it could be competitive in China. At the price it is being offered (over $700 for an unlocked phone), most feel it is too expensive.
Was this a misstep by Apple?
My gut tells me that there was a fair amount of thought that went into this pricing decision. And it may actually work out better than people expect.
By keeping the price a little higher, Apple remains a premium brand. If they created a truly inexpensive phone, it may have cheapen their brand.
But there is a psychological factor at play here, which many consultants know well.
When preparing a proposal for services, it is common for a consultant to provide 3 options. A low cost, bare bones option. A middle option. And a high priced, throw in the kitchen sink option. The middle option is designed to be the one the consultant actually wants to sell.
Most people, when given three options like this, gravitate towards the middle one, avoiding the low cost option, but not wanting to invest (unless they are flush with cash) in the most expensive option.
In the past, consumers in China had three options: a bare bones phone (low cost option), an “inexpensive” smart phone (middle option), or the iPhone (high priced option).
Is it possible, that people will now view the 5C as the middle option? Will the inexpensive smart phones (e.g., Samsung) becoming the low cost option?
Only time will tell us is the 5C and its pricing strategy is a smart one.
September 12, 2013
In Best Practices are Stupid, I discuss the need to “innovate where you differentiate.” That is, discover what you do better than everyone else and rally all of your innovation efforts around that.
In the book I discuss one company that does this well – USAA. They provide financial services to families of the military. For them, their differentiator is clear: they serve those who serve our country. In other words, customer service.
Today I saw confirmation that indeed USAA is innovating where they differentiate. They were #1 and #2 in customer service rankings according to the 2013 Temkin Customer Service Ratings. Congratulations USAA.
What about you?
- Where do you differentiate?
- On which list would you be #1?
- Does everyone in your organization have a clear understanding of this differentiator?
- Is this used to prioritize your innovation efforts?
September 11, 2013
For those of you interested in making internal collaboration a reality within your organization, I am conducting a free webinar in conjunction with InnoCentive, the premier open innovation platform.
Although some of the content will be similar to what I have presented in the past, there will be some new content specific to internal cultural issues. Here’s a brief description:
Live Webinar: Innovate Your Internal Collaboration
Featuring Innovation Speaker and Author – Stephen Shapiro
September 24, 2013 11:00 AM Eastern | 8:00 AM Pacific | 4:00 PM London
Although many organizations have become enamored with idea management systems, this approach may in fact be killing your innovation efforts. With over twenty years of experience, Stephen Shapiro has discovered that the key to accelerating innovation is to “ask the right challenge, the right way, to the right people.” This three-step process reduces the noise in your innovation systems and helps you focus on what matters most.
In this webinar, you will learn specific strategies for improving your internal collaboration and problem solving capability to generate meaningful results for your organization. Key concepts will include:
- Innovate where you differentiate . Although it is valuable to have all of your employees involved in the innovation process, it is critical that they be focused on the challenges that provide the greatest opportunity for growth
- Asking for ideas is a bad idea. Unstructured ideas and suggestions don’t have a “home” and create noise. On the other hand, well-articulated questions, structured as innovation challenges, start with ownership, sponsorship, and necessary resources.
- Don’t think outside the box; find a better box . Instead of giving your employees a blank slate, provide them with “positive constraints,” proven methods, and incentives that increase creative output and relevance.
September 9, 2013
From my experience, 80% of innovations within most companies are “dot solutions.” That is, innovations are typically developed by individuals from a single domain of expertise. Deep expertise is valued. Dig deep wells.
(for more on my perspectives on dot vs line thinking, please read my article from a while back – this is a critical concept for innovation – I discuss it further in “Best Practices Are Stupid”)
While spending time recently at 3M, I learned that 80% of their innovations are “line solutions.” That is, multiple domains of expertise are involved. For example, they might blend expertise from adhesives with expertise from abrasives to develop a new solution. Although this may be unusual within other organizations, at 3M, this is the norm. They are masterful at connecting dots.
But is this connected approach valuable?
They shared with me some recent research they’ve been conducting. The results are fascinating.
In a nutshell, they found that…
Line thinkers within 3M – based on the number of patents they contributed to in different areas of expertise – contributed significantly higher financial returns for the organization.
In other words, the people who became exceptionally deep experts and never used that expertise to contribute to different parts of the business were less valuable than those who made contributions to a wide range of products.
The financial impact of line thinking is staggering.
And although this approach is not the norm in most organization, it can certainly be encouraged through shifting the culture to one that recognizes and rewards these types of contributions.
P.S. I’ll share more detail when the 3M research is officially published. But trust me, the results are impressive.
September 5, 2013
In the September issue of “Speaker Magazine” (published by the National Speakers Association), I have a 3-page article. It is called: Do Less, Make More: Work Only One Hour a Day by Mastering Leverage.
Here’s the beginning…
I’ve been trying an experiment. For the last six months, I’ve been working, on average, only one hour each day on my speaking business.
This wasn’t easy at first given my tendency to sometimes work more than 100 hours a week. However, what I eventually learned was that I could be insanely productive by simply shifting my mindset. Long hours aren’t necessarily required to lead a successful career.
The fact is, although there are an unlimited number of things that speakers can do to grow or improve their businesses, there is a point of diminishing returns. The upside on additional effort decreases significantly beyond this point.
THE L-WORD: LEVERAGE
To successfully work only one hour a day (or at least a greatly reduced amount of time), you need to master the concept of leverage.
Leverage is something that gives the greatest return with the least amount of energy. We typically view our work as linear. An hour of work gives us an hour of results. But what if an hour of work could yield 100 hours (or more) of results? Instead of diminishing returns, you get exponential returns.
This is leverage.
Each morning I ask myself, what is the one thing I need to do today? What is the one thing that will create the most value? What is the one thing that only I can do? That is the activity that I engage in for the day, delegating, deferring or eliminating everything else. The key is to focus on activities that create leverage and maximize results.
The remainder of the article discusses why you should “stop telling people what to do,” how to “multiple your results by first dividing, how to leverage your speech, and how to create new revenue streams.
September 3, 2013
As entrepreneurs, there are countless things we could do to grow or improve our businesses. It’s easy to keep busy 100 hours a week. I know—I’ve done so countless times throughout my career. Unfortunately, I’m not the only one who has convinced himself that working long, crazy hours is a must if you want to find success.
The reality is, however, that there is a point of diminishing returns. Although more work might produce greater results, the return on the additional effort decreases significantly.
We Work Too Hard
There are many reasons why people work so hard.
Although it’s sometimes because there is simply too much on our plates, more often than not, we work around the clock for other reasons. Do any of these sound familiar?
- You feel like you’re a slacker if you don’t work all of the time.
- You worry that if you don’t complete every task, you may lose business opportunities.
- You work nonstop because it allows you to avoid dealing with difficult issues in your life.
Or maybe there’s some other reason. Regardless of the reason, most business owners work too much.
What if you were only allowed to work one hour a day?
I’ve been experimenting with this concept for nearly a year and have been relatively successful at keeping my time invested in my current business to about 20 hours a month.
Why am I doing this? There are two main reasons:
1. It forces me to focus on what’s really important. Each morning I ask myself, what’s the one thing I need to do today? What is the one thing that will create the most value? What is the one thing that only I can do? And that is the activity I engage in for the day. I delete, defer or delegate everything else.
Instead of keeping myself busy and climbing to the top of the “S” curve, I stop at the point of diminishing returns (the star on the chart below). The Pareto principle might state that 20 percent of the effort provides 80 percent of the results, but whether it’s 20 percent or 40 percent is not important. The key is that you find the point in your business where more effort starts producing fewer results—that’s your “star” point—and only you can decide that.
Will you extract 100 percent of the potential value? Probably not. But is squeezing out an extra 20 percent of value really worth 4 or 5 times the effort? That’s your choice. I could work 10 times harder and only increase my income 50 percent.
The key is to focus on activities that maximize results.
2. It frees up time to create new business. If you spent only 20 percent of your time extracting 80 percent of the revenue from your existing business model, this gives you 80 percent of your time to do something different.
You could, of course, spend your free time taking a vacation or spending more time with family. You could engage in work that you believe is more meaningful. You could volunteer and give back to society.
Or you could create a new S-curve.
Instead of squeezing out those few extra drops from your current business model, build a new business or new business model that leverages your past success and creates entirely new revenue opportunities.
With the extra time created, I’ve been working on a new book that targets a completely different market for me. I’m working on a TV show concept. And I’m creating new products that leverage my intellectual property.
These items take upfront effort. But when they’re done and have built up momentum, I will spend less time on those businesses, freeing me to create new revenue streams.
Encourage Creativity and Freedom
The purpose of working one hour a day isn’t to encourage laziness. And I’m certainly not suggesting you do a mediocre job, as this will kill your business in the long run. The purpose is actually to encourage creativity. This philosophy creates time/space for you to create—to create new opportunities, to create new revenue streams, and to create a better life.
Even if you don’t believe working only 60 minutes a day is possible, give the thought process a try. Use the “hour a day” mantra as a mental exercise. Determine what you might do if you only had an hour. Even if it ends up taking you four hours, it’s still better than the 10 you were previously investing. Now, what are you going to do with all that extra free time?
August 15, 2013
The question, “Do you really think for yourself?” isn’t as easy to answer as you might think. When a challenge or problem arises at work and you’re unsure of an answer, you probably rely on the judgment of others. But what if you know the answer to the problem? How likely are you to be swayed by other people’s opinions?
Countless studies illustrate we may indeed deny our own senses to conform with others. One old yet timeless experiment was designed by psychologist Solomon Asch. He asked participants to determine which of the three lines from the second image is the same length as the line in the image on the left.
While the answer is obviously C, his studies showed that people who would otherwise be certain of their convictions could be “manipulated” into questioning their beliefs. This was not done through coercion, peer pressure or even incentives. Nine experiment participants were shown the above image and were asked to call out which line on the right was the same length as the one on the left. This was done 12 times. Only one of the nine participants was actually being tested. The other eight were “plants” and were told to purposefully call out incorrect answers.
The result? Seventy-six percent of participants being tested denied their own senses at least once, choosing either A or B. And one-third of the time, across all the trials, the one who was actually being tested conformed to what the crowd thought.
In a nutshell, when people are in a group, individuals tend to provide similar responses, even if they believe something different. There are a variety of reasons for this, including fear of disapproval, self-consciousness and not wanting to stand out or be different.
Individuality and Group Think
We see this phenomenon take place in the world of innovation. It’s called “group think.” In group situations, it’s easier to fit in with the crowd than it is to take a strong stand for your own beliefs. And of course, in some cases, people really do subconsciously alter their opinions based on what a crowd believes. It’s harder than we anticipate to think independently.
This is why, when brainstorming (or using other forms of collaborative innovation), it’s often best for individuals to write down their own solutions before seeing what the group thinks. (The article Why Brainstorming is Stupid dives a little deeper into this idea.) But even outside the world of innovation, it’s useful to recognize this phenomenon.
The reality is, in many of our day-to-day situations, we already know the answer to our challenges but we just don’t want to admit it to ourselves. Should I get a business loan? Should I buy a new car? Should I end a difficult relationship? In these cases, we often seek advice from friends and colleagues first. Maybe we don’t trust our “gut.” Or maybe we want to find scapegoats to blame in case our decision turns out to be a bad one.
Lay Out All the Facts
A technique I use to help others make tough decisions is by flipping a coin. No, the coin flip does not determine your fate. Instead, you check how you “feel” the moment the result is revealed. Were you relieved or disappointed? This instantaneous response illustrates how you really feel at a subconscious level, and what you truly believe to be the right decision.
Although you want to be clear on your own beliefs, you need to avoid being overly dogmatic. Otherwise you might succumb to something called confirmation bias—the psychological phenomenon where we find evidence to support our beliefs, and ignore the information that refutes them. As a result, we often get attached to beliefs that may be irrational, preventing us from seeing what’s really in front of us.
The point of all this is that we are more susceptible to the influence of others than we might think. Get in touch with your beliefs. Don’t assume them to be true. But then again, don’t assume that others are right either. Use critical thinking. Ask why you believe what you believe. Groups can be quite influential at a subconscious level, causing us to change our minds without thinking.
I don’t believe there are bad decisions or good decisions. There are only consequences. When we understand this, it can help remove some of the pressure associated with trying to “get it right.”
August 12, 2013
Jake Sorofman, a Research Director at Gartner, just reviewed “Best Practices Are Stupid.”
His review started…
Don’t let its compact size—or snarky title—fool you. It’s a worthwhile read.
Unlike so many other books in this particular genre, it doesn’t disguise otherwise straightforward concepts with overwrought explanation. Shapiro gets straight to the point with 40 often counterintuitive tips on how to strengthen your innovation muscles, served up with respect for your time and intelligence.
July 30, 2013
Do you feel overworked? Do you feel as though you never have time to relax?
What if you needed to work only one hour a day?
I was recently interviewed by Dorie Clark for Forbes.com and discussed how I do this with my business.
To be clear, I do not work one hour a day. I work one hour a day on my “current” business. I invest my free time in “future” business endeavors such as developing new products or creating new intellectual property. Because my time is disproportionately spent on the future activities, it gives me freedom to take time off more often.
This should not be interpreted as being lazy or doing a half assed job with the current work. I still demand the highest level of quality and service in the work that gets done. It just means that I am smarter about how I invest my time by delegating, deferring, and deleting unnecessary activities.
It takes only 5 minutes, so you will have 55 minutes free for your other work activities.
July 20, 2013
On my Monday July 22 at 11AM EDT free webinar, I will be giving attendees my latest creation: The 10x Innovation ROI Quick Reference Card.
This 2-page checklist summarizes four important innovation concepts:
Ask the Right Challenge [FOCUS]
Frame Challenges the Right Way [FRAME]
Ask the Right People for Solutions [FIND]
Treat Innovation as an Experiment [FAIL]
Applying these approaches can massively improve your innovation ROI.
If you did not yet register, go here to reserve your free seat now.
NOTE: This event is oversubscribed. Therefore, we suggest you sign into the webinar 10 minutes early to ensure your slot.
P.S. For my international friends, here is a convenient time zone converter
P.P.S. This webinar will not be recorded.