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September 30, 2005

Ten Faces of Innovation

October’s Fast Company includes an excellent summary of the ten different types of people Ideo considers essential for successful innovation. Given Ideo’s track record, we should pay attention.

Ideo buckets the ten roles into three group

Those with an unquenchable desire to learn:

- The Anthropologist: Great observers of human behavior and how people interact with products, services and situations
- The Experimenter: Continuous (as in never stops) trial and error
- The Cross-Pollinator: Steals shamelessly from other industries – ones no one else would think to look to for lessons and ideas

Those who are savvy about how organizations work and what it takes to get folks to collaborate

- The Hurdler: Can and will get over, under and around any and all company policies and budget limits
- The Collaborator: No two or more people, regardless of how different, will fail to work together with the Collaborator’s help
- The Director: Knows how to make music of all the different roles

Those who convert ideas and collaboration into reality in your organization

- The Experience Architect: Designs and makes real undeniable experiences that bring ideas to life for customers, employees, executives and others
- The Set Designer: Integrates all the action into physical spaces that go beyond facilitating creativity to actively assisting it
- The Caregiver: Knows the last mile separating customer service from true and complete customer care. For the Caregiver, it’s all about the customer’s complete experience.
- The Storyteller: Weaves product, service, experience and brand together into a compelling narrative that gives meaning to life.

Any of you who’ve participated in successful innovation will recognize the faces in this excellent list. And, if you’ve seen failures, it’s probable there have been some faces missing. In Xerox’s famous failure to commercialize personal distributed computing, for example, there were not enough Hurdlers or Directors.

Ideo knows what it’s about. Let's add to their wisdom with these reflections:

- These ten faces of innovation will increase the odds of success. But, don’t read the list mechanically. Don’t demand that these faces always belong to ten different people. Think of them as perspectives and roles more than individual jobs.

- Don’t stop with individuals. Remember teams: no successful innovation ever happens in an organization without the contribution of one or more real teams.

- Add one more role and perspective: The “Company-risk” Risk Taker. Sorry for the redundancy. All ten of the roles and perspectives take risks. None of them necessarily, though, take ‘company risk’. Innovation at the far end of the spectrum cannot move forward without someone authorizing ‘company risk’ – that is, willing to put something that risks company performance on the limb. The brand, existing customer relationships, a heckuva lot of money, careers, supplier or vendor relationships, shareholder value – these are but some of the candidates that often define the lines between ‘company caution’ and ‘company risk’.

Posted by Doug Smith at 01:45 PM | Permalink

September 29, 2005

People Business

"All companies are people companies," writes Jennifer Rice at BrandBlog. It's such an obvious point -- yet, evidently, one we seem to overlook in our daily discourse.

When we say, read or hear words like “corporation” or “business”, “people” is not the word that springs to mind. “Profits” jumps out at us. But not “people”.

Yet, as Rice reminds us, "People make products for people. People serve people. People work with people and for people."

Rice goes on to describe how these habits of mind are but one of many signs of the dehumanization of society and business. She quotes the insightful work of Robert Putnam. In his landmark book, Bowling Alone, Putnam cites dozens of indicators (from lack of participation in local affairs to giving the finger to others with whom we’re not pleased)) pointing to a deterioration in our experience of civility and community.

But to make anything of Putnam’s insights, we must learn to peel back the onion. Just as the word ‘profits’ is more likely to leap out when we hear, say or read ‘business’ or ‘corporation’, the word ‘place’ instantly echoes off the word ‘community’. Putnam hears this echo – his recommendations insist that we must recapture civility and community by focusing on places.

What Putnam misses is that tens of millions of us no longer live our lives – no longer meaningfully and richly interact with other people on a daily basis – because of the places we happen to live. Instead, our best opportunity for the experience of community has shifted from places to organizations.

Why? Because it is in organizations, and especially the organizations where we work, learn, play and pray, that we throw in our lots with others who are not necessarily friends or family. It is in organizations, not places, that we depend on other people we know by name and interact with daily on issues that matter to our futures – our shared fates.

Organizations are ‘thick we’s’ – a phrase describing the experience of having an every day, tangible and gritty sense of shared fates with others we know. For so many of us, beyond friends and family, our thick we’s happen much more in organizations than in places.

If, instead of ‘corporations’ or ‘businesses’, we habitually used words like ‘work communities’ – or just ‘communities’ – the word ‘profits’ would still spring to mind. But so would "people”.

Meaningful language is among the scarcest resources during any period of profound change. For us to hear and act on Rice’s exhortation, we need new language like 'thick we's' or 'work communities'. Or we need to find -- and hear -- new meaning in old words like “business”, “corporation”, and “community”.

Posted by Doug Smith at 01:00 PM | Permalink

September 28, 2005

Lose Weight or Feel Better

Performance begins with focusing on outcomes instead of activities. Surprisingly, however, aside from familiar financial indicators, using outcomes as goals instead of activities is the exception instead of the rule.

Outcome-based goals start with answering this question: How would we know we succeeded?

Go ahead. Try it. Identify something you and others are working toward – whether at work, in your church or other religious organization, even at home.

Sometimes, the answer is quite straightforward. “How would I know I succeeded at losing weight?” By taking some number of pounds off and keeping them off for a period of time.

Other challenges are more difficult. ‘How would I know I succeeded at reducing the stress in my life and feeling better?” “I’ll know I feel better when I feel better” comes up short. It’s circular – and it provides little with which to gauge progress.

Whether you’re at work or church or part of any group facing a significant performance challenge, it helps to know if your challenge falls in the ‘lose weight’ or ‘fell better’ category.

“Lose weight’ challenges have outcomes such as revenues, number of customers served, speed, costs, number and success of new products, elimination of defects or errors and so forth.

“Feel better” challenges are more difficult. Consider, for example, total customer satisfaction, ‘most respected brand’, ‘best place to work’, ‘being the preferred provider’, ‘building new core competencies’ and ‘achieving diversity’. Yes, there are a variety of leading and lagging quantitative indicators that point to success. The number and quality of job candidates is a leading indicator of ‘best place to work’. Retention can measure lagging effects of a ‘best place to work’.

But concurrent, real time outcomes that directly reflect such aspects of ‘best place to work’ as ‘using our values everyday” are more difficult. Setting and achieving outcome-based goals for this kind of ‘feel better’ challenge may demand dropping our bias for easily collected metrics. Instead, it often helps to articulate qualitative goals that, even if lengthy, are verifiable through objective reflection.

“At least 4 out of 5 project teams in our organization that set and achieve performance outcomes will, when debriefed, be able to articulately connect the specific values they used to succeed and why they mattered.”

This is not as easily measured as a ‘lose weight’ kind of goal such as revenues, profits, speed or defects. But, it is just as powerful. Project teams knowing in advance that they will be accountable for this outcome are more likely to take the time to specifically identify and link values that the organization claims to practice to their job at hand. The teams – and, indeed, the rest of the organization – are more likely to see why and how ‘values’ are real – how and why they really make a difference.

Most challenges of any interest contain both ‘lose weight’ and ‘feel better’ parts. Managing performance demands paying attention to each, especially in a world that now requires attention to so many dimensions beyond financial results.

Posted by Doug Smith at 07:26 PM | Permalink

Downsizing Journalism

It’s like a scene from The Godfather – the staccato, serial elimination of the enemy’s key players in a single moment. Only, according to the Columbia Journalism Review, the enemy are journalists and those doing the firing are their media bosses.

In less than two months of carnage in the newsroom, media companies have put big numbers of journalists out on the street: 45 at The New York Times, 35 at The Boston Globe, 25 at The Philadelphia Daily News, 75 at The Philadelphia Inquirer, 52 at The San Jose Mercury News, and 100 at Newsday. Similar efforts are apparently underway at The Los Angeles Times and San Francisco Chronicle.

Jon Friedman at Dow Jones’ MarketWatch writes, “This is a scary time to be a journalist.”

Not to mention other employees – hundreds of them are also getting pink slips along with the journalists.

Friedman says Wall Street is to blame – claiming that media companies’ fear of failure to achieve profit expectations drive the cost cutting moves. Susie Madrak atSuburban Guerilla agrees and also adds that a serious decline in professionalism and the quality of the product explain the mass layoffs.

In other words, these events at newspapers across the nation are raising questions about performancewhat does it mean, who benefits from it, and what are the best strategies and approaches for delivering it.

We have a deep problem in this country. With the predictability of Pavlov’s dog, we equate performance with the bottom line – with profits and shareholder value and winning. When, in a business context, we say “performance’, this is what we mean: financial performance and only financial performance.

Yes, over the past few decades, popular frameworks like the balanced scorecard have taught us to quickly mention other constituencies beyond top management and shareholders: customers, employees, communities and so forth. But, as actually practiced, the Balanced Scorecard is not balanced. It is an important contribution for which we all should be thankful. But it has become a deeply flawed approach that, when all is said and done, merely reinforces our maniacal obsession with profits and shareholder value. Customers? Yes. Pay attention to them. Why? Because they are the means to deliver profits and shareholder value. Employees? Yes. Pay attention to them. Why? Because they are the means to delivering good customer experiences that deliver profits and shareholder value.

Profits and shareholder value are essential to success in a market economy. No one can argue with that. But – and here’s what’s leading to the mass firings of employees at newspapers – when businesses make shareholder value the “be all/end all” of everything they do, they undercut the very value they mistakenly think they’re creating.

Simple math explains this. How much profits are enough? Answer in our capital markets: No profit margin is too high. How many consecutive periods of compounded profit growth is enough. Answer in our capital markets: There’s no such thing as too many.

Well, start with whatever level of profits you want. Now, to satisfy the endless demand for shareholder value (not to mention management compensation and reward) make the profit margin higher and higher and higher. Now, pick an actually number. Say, $10 million in annual profits. And grow it at some rate every accounting period into the endless future.

You can’t. But the pressures to do this very thing lead to many observable phenomena. When performance means profits and shareholder value exclusively, performance itself is not tethered by any other dimension of reality. If floats, like a helium balloon – only no one is actually holding a string. It’s an illusion.

In newspapers, the untethered drive for profits to satisfy shareholders produce editorial practices that, to cut costs and curry favor, print the press releases of those they are supposedly monitoring and call it ‘reporting’, journalists who, to advance careers, stop questioning and challenging those with power in our society, and advertising and circulation folks who push beyond the edge of the envelope in ethical practices.

When it comes to the ‘news’ in ‘newspapers’, the product is cheapened, thinned out, spun dry. The strategy for news becomes what business gurus call ‘cost focused’ instead of ‘value focused’. And, that’s a death knell – at least for news. Because, while technology and other factors can help papers manage costs, reporting, fact checking, gathering multiple sources, weighing wisdom and judgment and all that goes into ethical and professional journalism is not, at the end of the day, a cost-driven business.

Media companies and newspapers have other lines of business that might lend themselves to cost-driven approaches (although, most strategists agree that both cost and value are always part of the equation). The New York Times, for example, recently described multiple strategies for growth.

But newspapers seem to have herded themselves to cost-focused strategies when it comes to the news. And, a close reading of the Times’ strategy presentation reveals the damage: ‘circulation is soft’. Why? Because as long as they call themselves newspapers, these offerings must deliver news as part of the product.

The last few months have been brutal on journalists and other employees. But the carnage won’t stop until the journalists and their colleagues from top to bottom figure out how to articulate and pursue performance that matters to all they serve in sustainable and reinforcing ways. The Godfather’s carnage is the tale of turf wars between rival organizations. It’s about serial homicide and assassination. What’s happening in America’s leading papers, though, is a tale of organizations at war with themselves. It’s not homicide.

It’s suicide.

Posted by Doug Smith at 06:20 PM | Permalink