I was thinking about the value of intangibles and the "knowing where to tap" story came to mind.  If you don't know it, it goes something like this:

A jet engine manufacturer was experiencing failures in one of their large turbine engines.  After trying everything they called in an expert turbine engineer to consult on the problem.  After studying the situation for a few minutes, the engineer asked for someone to bring him a ladder and a hammer.  He then positioned the ladder up against a section of the turbine, climbed to the top, and tapped the turbine several times with the hammer.  He then instructed them to turn on the turbine, and it ran smoothly.

A week later, the manufacturer received the invoice for the work, and was shocked that the total came to $5000.  He called the engineer and asked if he could break down the costs, as $5000 seemed like a large amount of money to pay for a task as simple as climbing a ladder and tapping with a hammer.

Another week later, the manufacturer received a new invoice.  It said, "For observing the situation, climbing the ladder, and tapping with the hammer  - $5.  For knowing where to tap - $4995.  The manufacturer then got the point, and paid the invoice immediately.

What is valued at your organization?  Does it reward the real value regardless of whether it is tangible or intangible?  The same can be asked of your consumers.  Do you know what they truly value?  Are your products and services representative of that value?

Most organizations have mastered the ability to deliver their products and services reliably and efficiently.  Remember the 99% lists?  As consumers we've come to expect excellence, and companies that don't deliver above and beyond this excellence won't last very long.

Organizations themselves also take these skills for granted.  I'm often reminded of this when I'm working with clients to develop innovation processes.  Many of the people within companies become frustrated that the organization's capacity for change is so low. 

At this point, it's helpful to step back and really think about what your development and manufacturing processes are expected to do.  If you work in a business where 99.9% isn't good enough (most organizations), then expecting the current process to accomodate breakthrough innovation is just not realistic.  Alternatively, expecting that the outcome of the innovation process will be products and services that fit neatly into existing systems is equally unrealistic.  Innovation efforts that implicitly carry either of these expectations will most certainly fail.

Innovation processes require room for experimentation, trial and error, incorporating unpredictable human elements, and all the other things that would bring current development and manufacturing processes to a screeching halt.  It's far better to separate each process, and let each one be what it needs to be.  Your innovation process should result in the identification of new opportunities that can be delivered in multiple ways.  Some may be able to work with slight modifications to existing processes.  Others may require completely new processes. 

Your innovation process should deliver market relevant opportunities.  Your development and manufacturing processes should deliver offerings to the market reliably and efficiently.  The real organizational challenge is managing expectations within the organization for what each process should deliver, and establishing the right connections between them (more on how to do that later).  But don't expect one to deliver on the expectations of the other.

I'm working on a project now where I'm trying to create a clear separation between the multidisciplinary team process for product implementation, vs product innovation.  On paper they look pretty much the same.  All the disciplines are represented, and the team is aligned around a common goal.

However, when you see the teams working together, something very different is happening between them.  The best analogy I've come up with so far is that the product implementation team behaves much like a soccer team.  The roles are clearly laid out, and the team members are executing specific tasks based on where the ball is at the moment.  On the other hand, the innovation team is operating more like a rugby team.  The roles are less clearly defined, and in a scrum, it's difficult to tell who's doing what, except that they all want to get the ball somewhere else and are working toward that end.

Implementation teams can work with clearly defined roles because the end product they are charged with making has been clearly defined.  Innovation teams are charged with figuring out what should be made. As such, clarity around roles is difficult, and it makes sense to have people who are more flexible and can fill gaps.

What are the characteristics you would look for if you needed to hire people to fill each type of team.  How are they similar, and how are they different?

Innovation requires your organization to do something new.  Not necessarily new to the world, but new to your company.  If you're doing something truly new to your organization, then it's impossible to know what the end result will be.  Every company is unique, so even borrowed ideas cannot be incorporated without careful integration.

One of my clients said "You can only operationalize what is known."  He is right.  And yet, I see so many companies looking for detailed innovation processes that will dictate the end result before a project actually begins.  There are even more consultants who are selling processes that promise to do just that.

Most companies make their money by setting up processes that can run on autopilot.  This only works if you know what you are making, and you have done it before.  You have a benchmark for improvement.  However, the results of an innovation process are not known.  There is no process, tool, or technique that can determine the answer for you.

A good process will show structure and rigor in guiding the thought process, but it will never dictate an answer.  An autopilot cannot make decisions.  It can only execute a preset response to a known set of inputs.  When you are in uncharted territory you need good people to make decisions based on the new information they receive.  It is irresponsible to think that this responsibility can be passed off by choosing a "process" that will make the decisions for you.

If your organization is like most, there are many processes in place that ensure no one can make a mistake that could cost the company vast sums of money, damage its reputation, or do other terrible damage.  While many of these processes are in place for a good reason, has anyone ever looked at the trade-offs that have been made as a result?

The reason I point this out is that I find it interesting that these processes are never, ever questioned.  Even though I've watched companies miss out on very lucrative opportunities as a result of blindly following existing processes, I have been left wondering why no one questioned what else could have been done to have avoided missing out on the opportunity.  A lot of effort goes into protecting the company from harm, which makes it all the more interesting that missed opportunities are seldom viewed as harmful.

I highly value thoughtfulness, and due diligence, and I am not advocating that companies abandon all existing processes to encourage people to chase after anything they want.  Far from it.  I just wanted to point out that it does seem a bit odd that questions about the value of missed opportunities are seldom, if ever, raised.  It would be interesting to see if there are some processes that are costing more than they save.

Do you know why all the processes at your company exist?  Would you know when their use should be questioned and/or challenged?

When I was in business school, I did an independent study thesis on the fostering design and innovation within corporations.  The process required selecting a department and a professor to sponsor the work.  When I first started business school, I thought that my independent study would best be sponsored by either the finance or marketing departments as I felt that lens would give me the holistic view needed to foster innovation.  I was wrong.  After my first two semesters, I realized that the key to successful innovation would be to understand how people and organizations work - beyond the org. charts.  As a result, I did my independent study under the sponsorship of the Organizational Behavior Department.  What I learned has proven invaluable as I guide my client organizations through the culture, structure, and power issues to realize the change required to innovate. 

When clients ask me if there are any reference materials on innovation, I start with a few articles that I still find invaluable to help me think through intangible organizational issues in a clear, structured way.  I suggest they start with these articles to provide a common language and shed light on issues they will likely face.  Most of them are fairly old, but I have found them to stand the test of time.  Here are the articles I use as a foundation:

Edgar Schein - Organizational Culture - For some reason I can't find a link to this one.  If anyone finds it please send it to me. (Excellent for discussing culture in a tangible and concrete way.  Allows you to pinpoint cultural contradictions.)

Edgar Schein - Three Cultures of Management: The Key to Organizational Learning  Available for purchase. (Great for understanding what motivates people's decision-making, beyond functional discipline.)

Steven Kerr - On the folly of rewarding A, while hoping for B (A great reminder on the true power of reward systems.)

Margaret Wheatley - Searching for Order in an Orderly World  Available for purchase.  (In undertaking innovation projects, it's a great help to understand the the contrasts in creating order in natural and unnatural environments.)

Maureen Scully and Debra E. Meyerson - Tempered Radicalism and the Politics of Ambivalence and Change  Available for purchase. (Any internal person responsible for innovation is put in the position of being what the authors call "Tempered Radicals".  It's an excellent primer for the issues they face.)

Deborah Tannen - The Power of Talk: Who Gets Heard and Why - (A good look at the differences in communication styles, and how our biases shape who gets heard, who gets credit, and what gets done.  It's focused on gender differences, but the ideas are equally important to the cultural influences we face in an increasingly global workplace.)

Kurt Lewin - He pioneered the "Unfreeze, Move, and Refreeze" model that underlies all successful change management programs.  I had a professor once who said that we could look at all the different change models and find that they could all be reduced to Lewin's.  He was right.

The other day I was having a chat with some colleagues about authenticity. Current wisdom suggests that brands and companies that are perceived to be less than authentic are doomed to fail. However, we know that brands, companies, and even people will behave differently in different situations. We even expect that they should. To lack the flexibility to do so would be socially disrespectful. So what is authenticity, and how to we ensure that others will perceive our work as authentic?

"To thine own self be true." That's the standard answer. If you are true to yourself, then you (meaning your brand, service, company, etc) will be perceived as authentic. However, I think that's only part of the answer. People can't judge how true you are to yourself. They judge how true you are to them, based on what they perceive. If you know what cues your market will respond to, then you can manage their perception consistently. This requires the ability to suspend what it means to be true to yourself, in order to fully immerse yourself in what it means to be true to someone else.

A few years ago, I was mentoring a person just starting out in his career. I imparted the standard guidance as he was doing his first solo project, and I asked him to periodically let me know what he thought was "cool", and why.  He did well on his project, and I learned a lot about how his social group thought about the world. One day, we were talking about why he shunned big, corporate brands, and he used me as an example.  "The coolest thing about you Ellen, is that you know how uncool you really are. Some big brands get that right, but most don't." 

Hmmm...who said authenticity was a good thing?

Walk into almost any company and ask a random employee what they do.  You'll likely get very specific answers.  "I'm in marketing", or "I'm a manufacturing supervisor", or "I'm a software developer."  They are all very clean, neat, and tidy, with little to no overlap.

Does this make sense?  I would say that when there is a problem in the product development process, it is usually because there is a problem with translation. By this I mean, how does someone within the company translate what they are doing to success in the market?  Companies spend a lot of time and money trying to integrate the disparate functions within the organization.  They focus on smoother hand-offs from one group to the next.  They focus on more integrated processes to bring everyone's interests to bear on the task at hand.

My question is, how often is the task at hand defined as a real market issue that needs to be solved?  Sales people are rewarded for pushing more stuff into the market, and some marketing people are rewarded to the extent that they contribute to this effort.  But how often are the engineers, software developers, and finance people rewarded based on an external measure?  How completely did the marketing person uncover and define a true underlying need in the market?  How well did an engineer or software developer do in coming up with a unique solution for that need?

Rather than focusing on pushing people together to try to integrate their competing interests, it may be better to pose a common challenge for the group to solve.  If this common challenge focused on an external issue, then focusing on the competing interests of different internal functions would be less relevant.  The group would naturally be pulled together, and the overlaps between their disciplines would be covered.

Now, how many companies actually reward their people for meeting these types of challenges?  My guess is that there is a lot of talking about cross-disciplinary functions, but the rewards focus on single discipline metrics. This even plays out in recruiting.  There is a time and place when you need strong functional expertise, and an equally important time and place when you need cross functional ability.  The right people for these challenges may not be one and the same.  Remember, there are people who live in the overlaps.  The challenge lies presenting the right challenges to the right people at the right time.  Easier said than done, but that's no excuse not to try. How are the overlaps covered in your company?

People often ask me how they can improve their consumer interviewing skills.  The thought being that if they can perfect the art of the one-on-one interview that they will have the key to understanding their markets.

I applaud the intention, and people who try to stick to a script rather than have a conversation with a consumer can surely improve their skills.  But it's important to remember that one-on-one interviews are only one tool in your toolbox.  Full understanding of what will drive consumer behavior in a given market requires a combination of qualitative and quantitative, primary and secondary, and generative and evaluative research tools.

How do you know which ones to use?  The answer to that question requires a clear understanding of the business decisions that need to be made.  Research should never be expected to give you an answer.  It is a tool to give you information that will help you to derive the right answer.  And the best way to ensure that you've arrived at the right answer is to collect information that will expose all sides of the issue you are dealing with, covering the proverbial blind spots.

Which leads me to the blind men and the elephant metaphor.  In the story, six blind men are asked to describe an elephant, yet each only touches one part of the elephant.  The man who touches the tusk thinks the elephant is like a spear, the man who touches the side things the elephant is like a wall, and so on.  They end up arguing that the elephant is most like whichever part they had experienced, without realizing that the elephant is made up of all of the elements, and is not at all like any single one. 

My advice is that the best way to improve consumer understanding skills is to figure out which perspectives and information will be necessary to paint the whole elephant. This can only be done by reconciling the results of all the tools used, rather than relying on any one to deliver the answer.  Which then means that the best skill to hone is critical thinking.

It's hard to find a company that does not embrace multidisciplinary project teams these days. The idea is that since we all have our functional blindspots, a team that brings disparate disciplines together will have all the potential blindspots and pitfalls covered.  While there may be more team disagreements, they will happen earlier in the process, resulting in less rework and greater efficiency overall.

Then why is it that some multidisciplinary teams fail, while others appear to work magic? What I've experienced myself and in working with client teams is that in an effort to ensure diversity of functional discipline on a team, organizations fail to acknowledge that there are some attributes that a team must share in order to accomplish their goals.  These attributes are not based on functional discipline, but are based on how people think, work, and interact.  Does a person do well with ambiguous problems, or do they prefer concrete goals and information?  And what type of thinking will best suit the needs of the project?  Let's take an example. For simplicity, we'll just discuss the engineering and marketing disciplines.

Project A:  The goal of this project is to launch an upgrade to an existing product. The current product does well in the market, yet it has been acknowledged that some improvements could be made. 

A good marketing person for this project will know the current market well.  They will be comfortable dealing with quantitative data about exactly what features need to be improved. They will also know price sensitivity of the consumers, how current competition will likely react, how an improvement will enhance distribution and retail relationships, what the advertising message should focus on, etc.

A good engineer for this project will know the current technology and processes well.  They will know how to tweak current processes, and how to modify desired features to be made on existing production lines, with minimal upgrades.  They may even have figured out a way to offer an improved product while cutting current costs.  They will know what can be done to hit the launch deadline, and have a plan to continue upgrades in future launches. There will be clear boundaries between their work and the marketing person's work.

Project B:  The goal of this project is to come up with an industry breakthrough that will ensure the company's market leadership in the next five years. It needs to reinforce the company's brand image with consumers, yet make current product competition irrelevant.

A good marketing person for this project will understand why the current market is what it is. They will know what fundamental needs their products satisfy for consumers, and they will want to understand what other product categories also satisfy these needs.  They will shun current industry assumptions about how the market should work, and they will think in terms of new business models, and how to change the current competitive environment. They will focus not on defining product solutions, but on clearly defining the success of a new offering.

A good engineer for this project will understand the needs that different technologies can satisfy.  They will love manipulating technologies to satisfy new needs.  They will not want to be asked to figure out how to make a specific product, but will want to be asked to devise a way to satisfy criteria that is based on both consumer and business needs. They will not want a spec sheet, but they will want to understand the needs first-hand.  The boundaries of their work will often be blurred, blending with the marketing person's work.

Most companies do not define the intended scope of a project as clearly as I have defined here.  Since they typically lack the tools or vocabulary to define the skills required to function well within different project scopes, team members may come to the table with goals that may be at cross purposes.  Imagine the marketing person in project A, being asked to achieve the goals of project B?  Or vice versa?  As they used to say about the old sit-com plots - We can be sure that mayhem will ensue!

The next time you are on a multidisciplinary team at your company, think about the scope of the project you are working on.  Has it been defined? Is everyone on the team suited to working in the way that is needed for that scope?  What have your experiences been?  I'd love to hear how others have tackled these issues.