HBR: Do You Know What Makes Your Company Distinctive?

January 18, 2014

An excerpt from my latest Harvard Business Review article…

distinctive tomatoEvery company has a limited amount of time, money, and resources that it can invest in innovation. That’s why they should focus their energies on opportunities that will set them apart from their competition — that is, they should innovate where they differentiate.

One company that does this exceptionally well is USAA, a financial services firm, which offers its services to military personnel and their families. Given the unpredictable and transient nature of the lives of its customer base, USAA knows that being easy to do business with is critical to its success. Its differentiator, in other words, is world-class customer service.

This commitment to service drives the company’s innovation efforts. It developed an app, for example, that allows military members to deposit checks from their cell phones – a major convenience for anyone serving overseas.  Although you may enjoy the same convenience with your own bank, you can thank USAA for it. They were the initial developers of this technology and hold the patent for it.

Read the rest of this article on the Harvard Business Review website

Avoid Target Fixation (transcription)

March 12, 2013

Here is the transcription of my Monday Morning Movie

Although I’ve never been in the military, I’ve worked with military groups. There is a term that I believe they use called “Target Fixation.” Target Fixation basically means that if you focus too much on a target, you might end up hitting that target.

If you are a fighter pilot and you are trying to bomb a particular place, you can get so focused on the target that you might fly your plane right into it. I know that skateboarders, motorcycle riders, and other people worry about Target Fixation. If you go on to the internet, there are videos of motorcycle riders who got so focused on something they did not want to hit, that they were somehow magnetically drawn to it.

If you’ve walked in the hall of any office, or any building for that matter, you probably experienced a version of Target Fixation. Two people are walking down the hall, one is going one way, the second person is going the other way. You look at them and lock eyes. In your head you know, “I see this person. I want to avoid bumping into them.” But what inevitably happens is, somehow by looking at each other, you are drawn towards each other and are more likely to bump into one another. In fact, if I happen to be walking past you in the hall one day, please do not be offended if I look the opposite direction. I look the direction I want to walk because that will prevent me from bumping into you.

The same thing’s true in business. This concept of Target Fixation that applies to innovation.

We get so focused on our competition and trying to beat them, that we inadvertently start becoming like them. But of course, if you want to beat the competition you probably need to be different than them. If you start trying to replicate them, you’re only going to be as good as them, and they’ve already got a head start.

We start to focus on the target. We start to focus on the enemy. And when we focus on the enemy, we are inevitably drawn towards them. We are naturally inclined to think more like them. We’re naturally inclined to do things like they do. We’re naturally inclined to try to take on habits and behavior that are like the enemy; the competition.

As a result, you begin to mimic them. You know, subconsciously or consciously, that you want to be different than them and differentiate yourself from them.  Although, thinking of them as the enemy indicates that you don’t want to be like them, unfortunately the more you focus on them, the more you start thinking like them.

Sometimes, getting in the head of, and in the shoes of the enemy/competition, is not always a good thing. When you do, all you can do is think like them. If they’re a competitor who is ahead of you in the marketplace, what this means is that they’ve already got a head start, and you are just going to try to catch up to where they are. As soon as you’re on to their best practice, they are on to the next practice.

This is not really a very good thing to think about.

Just as when I walk down the hall, instead of looking at the person that I’m about to cross paths with, I look in a different direction, this is what you want to do as an innovator. Look in a different direction. Don’t study your competition. Yes, you need to understand them, don’t get me wrong, you clearly need to know what the completion is doing. But if you’re solely looking at the competition, you’re going to bump into them. Look in a different direction. Understand what they do not see. See their blind spots. See what they are not doing, not by studying them, but by studying everything that’s not done.

Look at the world around you. Start talking to your customers and the pains that they have. Really understand, how do you solve their needs? Not, how to beat the competition at what they are doing. Ask, “How do we offer something to the market that differentiates us?” We want to innovate where we differentiate. If we do not know how we differentiate ourselves, then we don’t know where to innovate, and therefore, we spend a lot of energy, time, and money on things that don’t matter.

Don’t study your competition. Understand them, but don’t be so focused on the target, don’t get so fixated on that target that you inevitably start thinking like them. You need to think differently. Start focusing elsewhere. See what they don’t see. This will give you a better chance of differentiating yourself in the marketplace.

Do Your Innovation Efforts Work?

January 21, 2009

Sometimes the question you ask is more important than the actions you take.

During President Obama’s inauguration speech, he said…

“The question we ask today is not whether our government is too big or too small, but whether it works – whether it helps families find jobs at a decent wage, care they can afford, a retirement that is dignified.”

This is brilliant in its simplicity.  The same thought applies to innovation.

The question you need to ask is not whether you are developing creative products, processes or business ideas, but whether your innovation efforts work – whether they serve your customers, serve your employees, and ultimately serve your shareholders.

Innovation is not about change for change sake.  It is about purposeful change that creates value that reduces costs, increases sales, or improves cash flow.

In these troubling times, asking the right question is more important than ever.  Do your innovation efforts work?

Predicting the Next Meltdown

October 7, 2008

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.