Leadership & Business

Are You An Idea Killer?

My new Inc. column, entitled Beware of the Idea Killers is out and focuses on how new ideas are what will help your business remain competitive. However, be sure you aren't killing them before you consider bringing them to fruition.

As Innovation remains a hot topic in 2008 and as executive teams continue struggling to build effective, sustainable, and measurable innovation programs. The battleground becomes how to structure innovation departments, drive company-wide innovation initiatives, and sustain efforts over the long haul.

To help executives with these challenges my company, Breakthrough Management Group (BMG) is hosting a 2-day Executive Seminar February 25-26 in Denver, CO, entitled Chief Innovation Officer: Lead Your Company’s Growth and Innovation Efforts.

This is the third CIO course for BMG.  We hosted two similar events in 2007, each time heralding attendees from industries as diverse as healthcare, retail, manufacturing, and financial services into one room to discuss and learn about what they all have in common – the need to better drive growth and innovation in order to compete in the future. Past attendees include, Levi Strauss, AVNET, Circuit City, NYC Health and Hospitals Corporation and GE Energy to name a few.

If you are interested in Innovation and what it really takes to lead your company to the forefront, I highly recommend this course. More information can be found here.

China—From Cost to Quality in Less Than a Decade

How many of you—readers that is—think China is kicking our rear because of low costs. Well, guess what…you’re right. But you’re wrong, too. That’s because while China IS kicking butt with lower cost manufacturing, it’s long since turned its attention to quality. That’s because any able-minded Chinese business person or politician knows that the more successful they are, the sooner their success will run out. That is to say that the faster they grow, the sooner cost will no longer be a competitive advantage. That’s why Chinese companies have already begun taking quality very seriously. They know that in the future, quality is how they will compete—just like the Japanese figured out in the 50’s and 60’s.

Every time I travel to China I have a mini-awaking upon my return. That’s because I’m always astonished at how much Americans underestimate what’s going on in China. I guess it’s no surprise in a country where 70 percent of the population doesn’t even hold a passport, much less travel abroad, but you’d think television and the internet would fill the gap. Not so.

The rate at which improvements are happening in China—technically, politically, socially—is simply amazing. And what that means in the near term is that there will be no American company will have a competitive advantage simply by virtue of being an American—or western—company. The number of competitors we have to deal with is growing exponentially. Even in my own industry (if you can call it an industry), we’re already finding ourselves competing with Indian consultancies coming here—to the US. They’re not outsourced providers. They’re competitors in our own darn market. How soon will it be before Chinese companies come here to open up factories—much the way Japanese automakers have? The answer…not long.

I encourage every business person, whether you do business internationally or not, and whether you have foreign competition or not, to make an effort to study what’s going on internationally and to be ready for the coming Chinese and Indian quality boom. It’s not far off.

Creative Destruction

Creative Destruction – words most often associated with today’s world of newly intensified innovation. A term first coined by economist Joseph Schumpeter in the 1940s, it’s only in much more recent years that business leaders have come to understand its wisdom.

Nowhere is this understanding more clear than in the recent appointment of Robert Nardelli to the helm of Chrysler. Amid a great deal of criticism over his tenure at Home Depot, Nardelli appears to be a perfect choice for Chrysler.

Most experts agree that Chrysler will need to excel on many fronts: a razor-sharp discipline, a take-no-prisoner’s attitude toward cost cutting and a genuine willingness to destroy before recreating will be at the forefront. While many people have accused Nardelli of destroying the culture at Home Depot – much as they’ve accused James McNerney of destroying the innovation culture at 3M – I would argue that perhaps neither destroyed too much of anything in their first forays outside of GE. In fact, they may not have destroyed enough, or done their destroying creatively enough, and they were replaced before they could meet their boards’ high expectations. Then again, neither of them had a predecessor like Jack Welch, who’s own predecessor left him behind instructions to “blow it up.”

Innovation and Improvement: A Distinction Without a Difference

My newest column is up on Inc.com. It talks about how the processes of innovation and improvement are much more intertwined then we generally like to believe.

I would be interested in your comments and thoughts on the subject.

My company is now offering a new and "innovative training course", the first of its kind...Innovation Tools for Black Belts.  Held in Denver, CO Oct. 8-12, this course is specifically designed for Six Sigma and Lean practitioners, the class teaches a number of powerful Innovation tools in the context of BMG's Structured Innovation methodology, D4.

A five-day course, attendees have the opportunity to work on a real business issue with guidance from BMG’s innovation experts; teaching participants a solid, repeatable and predictable process for innovating new products, processes and business models. The first course will be taught by Dr. Phil Samuel, my co-faculty for BMG's upcoming Chief Innovation Officer seminar to be held in Denver, CO  Oct. 1-2, 2007.

I highly recommend it so check both courses out!

My New Article in Inc. - Either-Or Thinking Doesn't Work and Other Things..

My new article Either-Or Thinking Doesn't Work is now posted on Inc.com. It's about how Operational efficiency and creativity both play a part in business success. Let me know what you think.

I will also be facilitating a second Chief Innovation Officer Executive Education Course on October 1-2, 2007 in Denver, CO.  Chief Innovation Officer – Leading Your Company’s Growth and Innovation Initiatives. This program is specifically designed for business leaders who are leading the charge for growth and innovation inside their organizations. This is very dynamic and engaging course, I encourage you to check it out at CIO Course.

Don't Waste Your Innovative Efforts

Just the other day I read a press release titled, “Consulting Firm Warns Companies Not to Overuse Lean and Six Sigma.”  I laughed—for about five minutes.  And then I had an image of this consultant’s next announcement:  “Consulting Firm Warns People Not to Overeat.”   In fact what I really wanted to do was throw the bullshit flag (if you don't know what it is, go to www.bsflag.com).

As I laughed, I supposed that if you want to make your mark by warning others not to overuse something, you can pitch yourself as an expert at just about anything.  Because you don’t have to be an expert—at anything—to know that over use or under use means anything but proper use.

Let’s be serious though.  Anyone reading this has at least a fleeting understanding of the principles of Lean and Six Sigma.  Many of you could be considered experts in your own right.  So you’re probably laughing, too.

But beyond a good laugh, we all have a responsibility to ourselves and our companies to push for proper use.  In fact one of the words that underlies Six Sigma is “optimization” which is just a fancy word for “proper use” when it comes to a business process.  In Six Sigma we look to optimize everything—even the use of Six Sigma. So a good implementation of Six Sigma would focus on just the right amount of effort going into six sigma—not too little and not too much.

My Ink in Inc.

Inc. has added me to their roster of thought leaders and I will contributing on a monthly basis. My first column is titled It's All About Convergence -- The convergence of many approaches to business process improvement is the key to remaining successful in today's environment. Check it out and let me know what you think.

The Chief Innovation Officer

This week I participated in a first of its kind course titled, “The Chief Innovation Officer.”

It’s a course that was designed to meet a very specific and rapidly growing need.  And in fact many of the course participants noted that they had been searching for some time to find a course just like it.

Anyone reading this blog already knows the statistics.  A bazillion percent of CEOs say innovation is their top priority; IBM, Booz Allen, and others have launched innovation practices; business magazines are writing about innovation every week; and “best practices in innovation” conferences are popping up everywhere.  And, companies are assigning top executives responsibility for their innovation efforts.

But, despite all the attention (and hype) few companies—or people—really understand what it (innovation) really means.  I’ve run into people at conferences that say to me, “if I just pick up one golden nugget—one best practice—that I can take home with me, I’ll consider this conference to be a great success.  My response:  “wow, you don’t really value two days of your time very much, do you?”

So the faculty for the course:  Dr. Phil Samuel of Breakthrough Management Group, Cheryl Perkins, of the Innovation Edge, Robert Tucker of the Innovation Resource Center, and myself (of course) set out to design a course that would truly teach people what they needed to know to become their companies Chief Innovation Officer, whether they carry the title or not.  The intent was that 100% of the two days be filled with valuable insights and that instead of going home with a golden nugget, the attendees leave with a full treasure chest.

And that’s just what happened.  In the words of one participant, an Executive Vice President for a $16B company, “ . . .reflecting on the last 2 days. It may very well be that you just held the best session I have ever attended.”

Sentiment from others was similar.  Participants came from major healthcare organizations (boy can we use some innovation there), large distributors of products from cars to semiconductors, the paper industry and large insurance companies.  One participant, when asked what he would do when he left answered by saying, “ask my CEO to change my title to Chief Innovation Officer.”

The next "Chief Innovation Course" will be held on October 1-2, 2007 in Denver, CO.

My hope is that we’ve started to bring some clarity to an otherwise murky area of business—because the success of business in the United States depends on it.

I’ll let you know . . .

The Emerging Role of the New CIO

Search Amazon.com on the word “innovation” and more than 180,000 books come back. Search Time magazine and you get nearly 3,000 results. There’s no doubt innovation is a hot topic. Other evidence comes in the form of the many surveys that have been done by IBM, McKinsey, Deloitte, etc. In one survey by Boston Consulting Group, 81% of CEOs listed innovation as one of their top three priorities.

So what’s being done about it? How are CEOs satisfying the demand they’ve created by jumping on the innovation band wagon and telling their boards and CEOs that they’re focused on innovation? They’re doing what they’ve always done. They’re delegating. How do I know? Just look at the number of companies that have created the new position of CIO (Chief Innovation Officer) in recent years. It’s a trend that’s all too familiar. Back in the 70s and 80s it was the CFO—a response to the increasing financial complexity of business. In the 90s it was the first generation of CIO (the Chief Information Officers) followed by the CTO (Chief Technology Officer). Five years ago, in response to the Enron debacle, it was the CRO (Chief Risk Officer)—and in some cases, another CEO (Chief Ethics Officer). Well, today it’s the Chief Innovation Officer.

So what does a Chief Innovation Officer do? That’s a great question. In a BusinessWeek book review this week, Michael Arndt, without realizing it, alludes to the problem that most CIOs don’t know what to do—at least not yet. He comments on a new book from the Harvard Business School Press by two BCG consultants. The books is titled, Payback, by James P. Andrew and Harold L. Sirken, Arndt points out, all too well, that what the book lacks are the “how-to” instructions needed to successfully build innovation into a business plan. Once again we have high-level fluff. The gist of the book—you need to ensure your innovation efforts are profitable—is just too simplistic and is simply a restatement of countless books of yesteryear put in the context of innovation instead of re-engineering, mergers and acquisitions, or any other “new” effort to improve business. Which business improvement efforts don’t require a measurable payback?

I run into a lot of CIOs these days. They don’t all explicitly have that title—they might be VPs of R&D, SVPs of Corporate Strategy, or Directors of Sales, Marketing and Innovation—but they all have the same objectives. They’ve been tasked—delegated to by their CEO—with figuring out how to drive innovation in their company. After all, the CEOs must keep their promises to their board and shareholders. Most of them are doing a lot of reading, attending conferences, and possibly reading an occasional blog. And most of them are as confused and lost as ever, because of books like Payback.

That’s why I’ve set out to help them, by creating a program that actually teaches them how to do their job. We start with simple things, like writing a job description for themselves. And then we set to the task of actually teaching them how to execute on each element of that job description.

It’s a pretty simple concept, but one that seems long overdue.

The CEO’s Drug of Choice

Data—can’t live with it, can’t live without it. There’s an old saying that I’m sure most of you have heard: “We manage what we measure.” Other variations go something like this: “If you can’t measure it, you can’t manage it,” or “Without data, we’re flying blind.”

The information age has given us the ability to collect massive quantities of data. In a 1960s episode of the original Star Trek series, there was one particular episode in which the crew of the Enterprise discovered a deserted planet, and on it a computer. Spock reported to Captain Kirk: “Captain, there’s over a terabyte of data here, more information than the world has ever known.” Today we can store a Terabyte of data on a single disk drive.

And so companies are overflowing with data that is used to make million – and billion – dollar decisions every day. Having data to support our conclusions gives us a greater sense of confidence. But should it?

Data acts like a drug for many executives. It gives us a warm fuzzy feeling; it helps us feel confident in our conclusions; it helps us justify our decisions; and it insulates us from blame should our plans go awry.

Unfortunately, all too often today, I see executives using bad data—and they don’t even know it. The reasons are many, but at the most fundamental level it’s because no one has done the grueling work of figuring out what the right data is.

One of the most common misuses of data is estimating the size of a new market. I’m sure many readers have heard the one about the shoe company whose business was slowing in the U.S., so it sent two marketing managers to Africa to explore the market there. The first called back to headquarters in the U.S., reporting, “There’s no market here for us. No one wears shoes.” The second called in reporting, “There’s a huge market here. No one wears shoes.”

Given the same data, one could conclude that there is either a tremendous market or none at all. And one could use the same data to kill any plans to take the business to Africa, or to make a huge investment there. So what data is needed in this case? The needed data is “How many people want or need shoes and can they pay for them?” It’s not a question of how many have or do not have shoes.

Obviously my story is an anecdote, and no established company would make a decision about entering a new market based on such simple reasoning. But even when more data is collected and analyzed, and when the team believes its decision will pay off, sometimes it’s just a failure. So what happened? All the data in the world couldn’t save us. We thought we were managing what we measure.

A big part of the problem is that we often start with the data and ask, “What can we learn from it?” But that’s simply backwards, because available data can severely bias our conclusions. Instead we need to ask, “What do we need to know? What decisions do we need to make? And what data is necessary to support those decisions?” Then we can search out the data, if it’s available, or we can install a means of collecting it. What we can’t do is settle for data that might be available and force-fit it to our problem.

That’s no different than abusing drugs to make us feel better for a time – until we suffer the crash of a hangover.