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Business Becomes Human

An R&D scientist once said to me, “We need to always begin new product development projects this way,” after sifting through more than 20 in-depth consumer narratives of their condition. These people went into great details about their lives, their struggles, their rituals, and their beliefs. As we unpacked their learnings, the scientist understood the complexities of having a rich, full contextual understanding of the people for whom he will design new, innovative solutions. To summarize with a metaphor, he walks in their high heels, sneakers, and Crocks, embodying their situation as if it were his own.

Instead of creating another product barely distinguishable from the sea of sameness that surfeits the shelves of food, drug, and mass stores off of a job brief that solves a marketing line problem, this scientist can now collaborate on a new approach to these problems with a deep understanding of the situation.

The insight at hand is that we are not solving business problems here. We are solving human problems. In this era when landfills and the seas are gutted with enough plastic to choke the planet, do we really need another product for the sake of making money solely? Wouldn’t it be better if we create things people need, people use, and that help people? Please do not tell me that this is idealistic.

This is the business-world paradigm shift of our era. Forget business-to-business. Forget business-to-consumer. That is outdated thinking.

We are crafting solutions for real people. Instead of creating a me-too product for an ambiguous market segment, real innovations seek to connect with the fate and fabric of their users’ lives. This is human-to-human business and smart product design, part caused-based and part entrepreneurial horse sense, but it makes business good and it also, no surprise, makes good business.

Following this human-centric process, Design Thinking, begins with empathy with real people. Later, product ideas are co-created with real people. This hand-on-the-pulse method creates new, breakthrough products and services that make a positive difference in the lives of many.

As the scientist says, “We need to always begin new product development projects this way.” Welcome to the new era.

Growth: That Crazy Talk

Call it the entrepreneurial instinct, innovation, business savvy, whatever you want: strategic growth is how business prospers.

While iconic ventures stand as global luminaries of category-defining growth, such as the modern grocery store and overnight delivery, most businesses cower when facing growth.

Growth is a natural source of power, a wellspring or volcano. Businesses, like nature, live a lifecycle. Organizations are as alive as a person; yet, most businesses do not harness the growth process to gain an advantage.

Rare companies that address growth by a mix of planning and making well-timed, well-orchestrated adaptions to their plan make positive headlines.

In most cases, dynamics change market conditions and businesses retrench. They do more of what no longer works with increased vigor and focus. They react in fear. These actions dig a grave.

More than ever, every business needs to find, discover, and implement fresh, rewarding ways to procure and retain business. Remain relevant, demonstrate value, and compete with formally unthinkably high levels of service.

At the time when companies need to radically rethink their market strategy, they hide behind walls of denial and the sleepy, sentimental practices that worked in the 70s, 80s or 90s.

Sadly, we witness this reenactment at business after business: “Growth. What do you mean? We’re just sitting, waiting for the phone to ring. … We don’t need a plan. … We just trade customers back and forth with our competition,” and on and on. We get thrown out for crazy talk.

Excuses and justifications, we’ve heard them all. They add up to a deafening wake up call for the whole business culture of Planet Earth.

Consider your business. Do you really want to become one of hundreds of companies that were industry leaders in the cultural climate that once was? An example of the perfect company for its era, long ago? Or, can we retool our business climate and invent new product pipelines and services that create new markets and generate serious returns?

What will this generation’s visionaries look like? What core markets will they disrupt or create? How will they impact the world and infuse the local economy by being a top employer and recruiter for the area? Perhaps it will grow out of your neighborhood?

Let’s apply this crazy talk to existing companies. What old-line companies will transform their business model and product/service mix to keep growing? What companies will quicken their demise by not changing?

These are crazy times. Listen to the crazy talk.

Here’s what keeps you sane: accept the fact that growth is a reality in business. What keeps you inspired is seeing your topline revenue grow because you guided change in your favor. You have a strategy. You adapt. You keep the firm in the present moment, instead of living a tired dream and repeating outmoded practices.

Will the next company be ready to grow, stand up? The world needs you.

 

The Right ROI of Innovation for Your Firm

Innovation as investment is a simple three-step process. First, figure out the risk-tolerance level, which allows you to get real with your expectations, roles, resources, and metrics. Second, come up with a mix based on the risk-tolerance level of your culture. Third, formalize the assignment – and kick off all projects with visible executive leadership support. This executive support is critically important.

Let’s demonstrate in broad strokes. You and a core team are assigned to make innovation real at XYZ firm, a mid-market health manufacturing and product company in the B2B space. Traditionally, XYZ firm has been risk-averse and managed with rigorous metrics. After one failed trial innovation project almost a decade ago, the leadership felt burned and buckled down to achieve operational excellence. Now, growth seems possible – more growth than five or seven percent a year. Also, the board has been inquiring more insistently about innovation and wants XYZ to reach double-digits growth and to explore innovation.

So, we know that XYZ firm has a low risk-tolerance. Therefore, they can develop an innovation mix that works for their firm. XYZ decides on an 80/15/5 strategy. Eighty percent of its innovation efforts will be incremental to their existing operating business and will include product augmentations, new products in existing lines, and some process optimization (cost savings) not yet realized. Incremental innovation requires the least amount of change and spending but traditionally brings the smallest returns. New metrics and a few committees are created for existing product managers, engineers, marketing and R&D, and a small budget is set aside.

Fifteen percent is focused on bringing something new to the firm. We will classify this as a Disruptive Innovation. The firm reassigns a product manager as an innovation manager, allocates a small percentage of a multidisciplinary team to this 15 percent effort and creates metrics for new ideas. They will follow a stage-gate process and will be allowed to present new ideas for product suites and services four times a year to senior leadership. For a roughly 250K total investment, they estimate a return of 1.2 million to 2 million in 18-24 months.

The remaining 5 percent is a conservative bet on a breakthrough innovation, something that will possibly redefine how the market thinks about a category while making the company that creates the breakthrough the market leader in the space. XYZ firm needs to not reject the ideas that come from this assigned 5 percent of the innovation ROI as outlandish or too wild as a matter of planning – it is their job to foresee trends and craft stunning ways to meet unmet needs for their customers. Therefore, they establish in their founding metrics that they will pilot at least one of these ideas within an 18-month period as part of a formal study.

Innovation ultimately is an investment. You must diversify and apply a mix that is right for your firm to make it a formal discipline.

No Time for Chickens

As we meet with more and more of the midmarket companies in America, we are astounded at how many of them are hiding under their desk “riding the recession out.”

The old “Story of Chicken Little” comes to mind: Chicken Little was in the woods one day when an acorn fell on her head. It scared her so much that she trembled all over. She shook so hard, half her feathers fell out.

Chicken Little is a story for teaching courage and it seems that courage is what the midmarket lacks. This is troubling given that the midmarket is the backbone of the American economy.

The National Center for the Middle Market at Ohio State University’s Fischer College of Business conducts the largest survey of the midmarket. The survey of nearly 1,500 midmarket C-level executives concludes: “the health of the middle market is vital to overall U.S. prosperity.” The center estimates that the midmarket encompasses 195,000 businesses and contributes 34 percent of total employment in the US. The study categorized only nine percent of the midmarket companies as “growth champions” that exhibited double-digit revenue growth in 2010 and 2011, and projected the same for the rest of 2012.

According to Doug Farren, Director of the National Center for the Middle Market, the characteristics that set growth champions apart from slower-growing companies include: having a sharper focus on customers, investing in innovation, having a broader geographic vision for their business, cultivating a strong management culture, and doing a superior job with talent management. “It’s not who you are, it’s what you do that makes you a growth champion,” said Farren.

Investment in innovation was the strongest common theme across growth champions, he said. They tend to invest 2.5 times more into R&D per sales dollar than slower-growing companies.

Midmarket company executives that want to ascend the ladder from marginal growth into growth champions should ask themselves some key questions, including whether they allocate and protect funding for innovation, and how they can strengthen innovation and make it repeatable and measurable.

The recession is a time of opportunity for smart companies to out-maneuver the competitive field and for strong companies to put capital to work. It is the perfect landscape to enact strategy and make strides in the market.

Here at the Studio we frequently discuss the paralysis that occurs in the face of change and the desire to take calculated risk but the inability to pull the trigger: all part of the human condition. Our working theory at the moment is that growth and innovation isn’t possible without growth in the team and in the individual. To us, growth means expansion of the mind to empower humankind to walk through and explore the unknown in the fabled “door number two.”

The midmarket needs a shot in the arm. Don’t be a Chicken Little. Don’t be afraid. No, that’s not the sky falling. In fact, it may be opportunity knocking.

Corporate Shamanism

Take risks. Leap into unknown and unexplored areas. Express yourself in new ways. Do these things to locate, validate, and capitalize on new areas of growth for your business.

There are formal methods and processes for unlocking potential and manifesting new realities. We always tell clients to be true to themselves, their organizations, and to be a positive force on the planet. We embolden and encourage. We connect them to the real lives that use their creations.

For these reasons, we would like to state that real innovation work is a form of Corporate Shamanism.

“Shaman” is a word of the Tungis people of Siberia, which means “one who sees in the dark.”

This visionary work dates as far back as 40,000 years ago. A shaman uses the power, wisdom, and energies of a different frame of mind to create and promote constructive change in people and their environments.

A good shaman sees him or herself as a “hollow bone” through which healing and messages are transmitted to “clients”. Isn’t this the same work as an Innovation Catalyst who strives to connect their clients with their own humanity and the humans who use their products and services? Without imposing a pre-amped set of prejudices, innovation starts in the dark of discerning how people perceive your offering.

Then, through a set of rigorous exercises, the energies are harnessed and the perceptions that are gathered are put into a new pattern, a new way of seeing, a new way of measuring value. This creative process holds true on individual, product, and corporate levels.

As organizations are nothing more than collections of individuals, it makes deep sense that these time-tested, powerful methods can be used to restore organizations to a sense of mission, purpose, and optimal creativity. In fact, many actual shamanic practices can be applied to business issues and corporate cultures with great effect.

Besides, Innovation, as a word, has no real meaning anymore. For some organizations it is a lofty goal, for others a marketing plan, and still for others a new IT platform. Yet, real innovations – categorized as Disruptive or Breakthrough – change the world they inherited.

While it seems like a wild leap of fancy, calling the discipline Corporate Shamanism instead of that empty word “innovation” from the Industrial Revolution, is a better fit.

Corporate Shamanism re-humanizes business, focuses on the people who use a product or services, and uses a scientific approach to achieving a visionary result.

Who wants to journey into the vast land of possibility? Let’s go.

Entrepreneurs, Create Your Own Maps.

Entrepreneurialism is the last frontier—an uncharted region with unprecedented, unforeseen, and unknown dangers, challenges, and rewards.

All adventures begin with a new map, just like the territory you charted in your business plans. You drafted this plan in the ardor of a visionary impulse, tempered with a will to thrive as you grow.

The world is in too short a supply of courage and craves its heroes, its success stories. Perhaps your story will become a light in our constellation of capitalism, a story that inspires generations, like the ones of Bill Gates, Steve Jobs, or Fred Smith of FedEx.

For the real, budding businessperson, there is no choice. You know you can do something better, create a more useful product or service. The status quo won’t cut it. You’re propelled to create a better way by aptitude, circumstance, drive, or a combination of all three. Here’s the real reason why.

In this new world, you learn who you are, what you’re worth, your capacity, who you can trust, and you come to realize – with earned depth and from experience – what things really mean. You can invent your future.

Invent: You must possess a mindset that allows quantum leaps. This is the taproot of the creative process. To invent requires skill, knowledge, and passion. You must be able to lose sense of time when solving a problem while also having the ability to zoom in and zoom out. You zoom into the smallest details of an invention-in-process and then zoom out to see its broadest potential market application, keeping one eye on the product and the other on the market. You adapt, as the actual finish line is not yet on the map.

You: The key word here is you. The tense is possessive. You possess a sense of mission, a calling. You do not sacrifice your integrity for the illusion of security. You take risks because you believe in what you are doing. As a result, you trust yourself and others are willing to bet on you. You leave the safety of tenure or the golden handcuffs of a corporate job to own your personal destiny. You don’t have a back-up plan.

Future: The future is the frontier you have begun to map out. Often a new map—a new way of seeing—is placed over an old map and a new era is born. The keys to this future are always found right at hand, in the present moment. Your future is defined by the actions you take today.

Now, a story about a fellow adventurer, a personal star in our constellation, Michael’s maternal grandfather, Leo Brody. He had to turn down a full scholarship to Vanderbilt to support his mother and two sisters. While working at a pawnshop on Beale Street he started repairing luggage. Along the way, he dismantled pieces, put them back together better than before, and an idea struck him like lightning. Travel was the new paradigm. Planes, trains, and automobiles had replaced boats and more travelers were on the roads.

He hustled his way to Chicago and New York with his map in hand. He sold all the large department stores on private label luggage. During the heyday of his company, it produced 2.4 million pieces of luggage weekly. At his funeral it was stated that he was one of the rare individuals possessed with a vision and the will to manifest it. In other words, he invented his future.

Now, it’s your turn. Such a life is not for the lily livered or faint of heart, but the treasures are varied and worth the effort. Take the step. Follow your calling. The world needs you. Besides, you cannot deny the adventure for another second.

Three Critical Ingredients for Innovation

Our firm, the Southern Growth Studio, helps many companies with innovation. We help with projects labeled as innovation and we also consult on how companies set up the processes, framework, and governance for successful innovation.

Based on our experience, we know that three key things must be in place for innovation to flourish. If innovation is to become the No. 1 strategy priority to drive growth and wealth creation, these three ingredients must be in place.

First, senior management commitment. Innovation must be in the company’s vision, goals, and metrics – and conversations must take place about innovations on a continuous basis. Innovation needs to be valued and practiced as a core disciple of the firm. Senior leaders need to model this importance. Senior management commitment is more than twice as important as any other factor in determining the success of innovation at a company.

Second, teams over technology. Innovation isn’t about the collaboration software. It’s about people. Multi-disciplinary teams who follow a process with an open spirit of collaboration score best.

Third, define types of innovation. Incremental innovations are wholly different animals compared to breakthrough, game-changing innovations. Define the objective of each project or mission with care so you can better manage expectations.

With these three ingredients in place, a company can use innovation to fuel organic growth.

Necessary Disruptions

Last year the New Yorker published an article about how Disruptive Innovations have failed and how the theory is bogus. It’s one article among a number that, to our thinking, completely underestimates the forward-thinking and world-changing power of disruptive innovation in business.

The long piece went into great depth about the emerging Disruption industry of consultants, the Disruption ethos prevalent in Silicon Valley, and the many Disruption discussions in boardrooms across the globe.

As practitioners of innovation methodologies, we were asked our take on the piece. The writer, Jill Lepore, takes the innovation author, professor, guru, Clayton Christensen, to task. In short, the article is more of an abstruse diatribe on theory, rather than a study of the application of disruptive innovation. Ms. Lepore claims that aiming for disruption is ruining what is left of civilization, that we are creating better gadgets, but not a better planet or better quality of life.

The article is a dense, yet potent read. While she makes some good points with flair rare for academics, the basis of her argument sits on shaky ground. You must understand that disruption—revolutions, not evolutions (think Skype or Netflix as opposed to AT&T buying Direct TV, for example) are needed in more sectors of the world more than ever. But, Ms. Lepore is correct that if the outcome is merely a better gadget, then it may not be worth much outside the bank.

This is the hard part, denial. If you think the world is not in crisis, you may stop reading now. However, we live in an era of change when most of our major systems have shown life-threatening stress. Look at the national debt, climate change, mounting tensions in the Middle East. One glance shows that all of the major systems – the environment, the economy, the educational system, the healthcare system, our coal-based energy system – are in crisis. Only brave, radical solutions can redeem them. Only alternative disruptions can make the types of changes that point a way out of these vexing predicaments. So, even if the methods first birthed a new gadget, then disruptive innovations can now be used to save these systems, the planet, our species, other species—and improve our quality of life. But there is a problem …

The stranglehold that the Industrial Revolution mindset has put on management has created an inflexible, linear choke on innovation. We use methods such as six sigma to wrest results out of a process, which does not allow for incremental (small) innovations to happen organically as part of the oral tradition of a culture. Therefore, businesses and organizations get stuck in a rigid rut and only a revolution can get them unstuck from this over-managed, overly rational way of doing things. We live in an era where our major systems are in crisis—and there is a distrust in human creativity to lead us out of these crises.

When orthodoxies and prejudices will not allow us to dynamically adapt, disruptions are a natural occurrence of a rebirth after a long period of stagnation. Because of the Industrial Era and its paradigm that has been taught in B-school and its shadow over work culture and culture at large, disruptions are the only way to improve the quality of life for the mass of humanity. There are many stories that Ms. Lepore could have quoted about disruptions in healthcare, in lending, in vertical tower farming to explore the positive side of this applied theory, but she was too busy stepping on Dr. Christensen’s mistakes to see the overall need for, and proof for the concept of, necessary disruptions in a world where we overly manage things into a state of paralysis.

Panic in the office.

by Josh Roberts 

Plenty of things can incite panic in an office. Looming deadlines, a surprise resignation, and hard drive failures come to mind quickly. At the Studio, we have an unusual variable that can cause us to panic:

Sticky notes.

Or, more specifically, a lack of sticky notes. We go through a lot of them, sometimes up to 6,000 during a several month project. We arrange them, we sort them, we categorize data with color-coding. We use sticky notes in myriad ways.

When we’re kicking off a project and look in the supply closet to discover a lack of sticky notes, there’s panic. Luckily, there’s also Amazon.

What unusual thing can cause panic in your office?

Real Leadership: Don’t Mean a Thing If It Ain’t Got That Thing

The American Master of Music, Duke Ellington, also stands as an ideal role model of leadership for the emerging business and nonprofit world. As the global workplace moves toward open workspaces and sees the value of multi-dimensional team filled with hard-to-traditionally-manage creative professionals, a look into Ellington’s leadership style can inspire outstanding results.

The master key to Ellington’s style was knowing that creativity is a team sport. Collaboration, whether with songwriters or musicians, galvanized a single idea, turning into a massive alchemical expression with more creative power than an individual has to offer. He was always open to exploring works-in-progress with an obsession and passion so rare he named his autobiography Music Is My Mistress. He was open to finding what worked to unlock the best product possible, drawing on different musical traditions, different partnerships, and different expressive styles to make the music sound “like a girl saying yes,” which was his wry way of saying the magic power of collaboration worked.

Another element in Ellington’s leadership style was creating a group framework that mixed form (the formal structure of a composition) with areas within that form that allowed for and encouraged, even demanded, improvisation (personal expression within the confines of the project). This mix of structure and creativity within the structure played to the strength of individuals. This point depends on the next one to resonate; he knew his peoples’ particular talents deeply.

It is important to note that many of the best players left the Ellington fold, but most eventually returned. Without exception, their reputation, their legacy, and their memories rest on the time spent with Ellington. Something in his nurturing leadership style left them less capable of expressing themselves as fully, as freely away from his influence. He knew his team so well, you could posit, that he was better able to judge what they did best than they were. Ellington showcased his players in miniature masterpieces, displaying a soloist against the backdrop of a tightly knit ensemble. His players knew when to support and when to lead.

Ellington could take variety of backgrounds (formally trained, raw talent, hot shots, team players, the driven, the disciplined) and weave them into a singular force via his vision, strategy, and trust-building style. His music stressed the unique contributions of each band member, fashioned into something greater, into “music that sounds good.”

Finally, he let the product – the music – speak for itself. Duke was elegantly dismissive of analysis: “too much talk,” he said, “stinks up the place.”

Listen to Ellington’s music as you would read a book on leadership—his canon is filled with sonic pleasures and profound lessons on organization.