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IdeaConnection Interview with Stephen Shapiro, Author of Best Practices Are Stupid, Personality Poker®, Goal-Free Living
By Vern Burkhardt
"The smartest organization will not survive. The company with the most money can quickly fall from grace. But the organization that adapts and evolves to address ever-changing market conditions will thrive in the long run." Best Practices Are Stupid, page 1.

Vern Burkhardt (VB): Congratulations on the publication of your most recent book, Best Practices Are Stupid. Are 'Best Practices' almost always stupid?

photo of Stephen ShapiroStephen Shapiro: Best practices are sometimes stupid, contrary to the title of the book. There are times when you do not want to re-invent. For example, you don't want to innovate the way you do your financial reporting as this could get you into a lot of trouble.

The reason best practices are stupid is you end up following the leader. And if it's about differentiation, then you're always going to be playing a game of catch-up. More importantly, what worked for one company may not work for another so it's important to recognize the context under which any kind of practice is used, and then learn from it and adapt.

VB: And if you try to follow the practice of other companies it's unlikely to work because you have a different culture and business model.

Stephen Shapiro: Absolutely. If you think about the companies everyone wants to model, they're Apple, 3M, and Google. Well, guess what? Your employees are not the same people as they are hiring. They've spent a lot of time developing their culture. Doing things which have worked for those companies may actually destroy innovation in your company.

VB: Is the focus by many companies on 'best practices' a management fad similar to previous fads such as MBO, TQM, Reengineering, Delayering, and Empowering?

Stephen Shapiro: I'm not sure I would call it a 'management fad' per se. Even innovation runs the risk of becoming a management fad if we label it as the 'Program of the Week'. The reality is that all these things, like 'quality', are important parts of business but we've always treated them separately from the business.

I would like innovation to become integrated into the way we do business and to stop using the word 'innovation' as much. We should recognize that it is a natural extension of what we need to do.

Best practices would fall into the same category. It's a matter of recognizing what works and what doesn't.

VB: Is the overuse of the term 'innovation' because there is a lack of real innovation in many sectors?

Stephen Shapiro: There's definitely some truth to this because everybody hops on the bandwagon. At least with re-engineering you had Michael Hammer who defined what re-engineering was, and Six Sigma has a common vocabulary and process. These types of management initiatives are well understood. But with innovation people don't even agree what it is.

What ends up happening is everybody says we need to innovate but they have no idea what it is they want to do, why they're doing it, or how they're going to do it. This runs the risk of hurting the whole innovation movement because, from my perspective, innovation is not about the new products or processes. It's about adaptability and creating a fast and nimble organization.

VB: In Best Practices Are Stupid you say, "Expertise can indeed be the enemy of breakthrough thinking." What are some of the lessons of this observation for companies with R&D departments?

Stephen Shapiro: Numerous studies have looked at breakthrough innovation as distinct from the more adaptive types of innovations which are extensions of previous things we've done. They have found that breakthroughs almost always come from a person working in an area of expertise outside of the area in which the problem was framed, or from multi-disciplinary teams.

We need to recognize that an organization can solve a lot of problems – 70% to 80% of the things being worked on. For example, if you're working on chemistry problems, chemists can probably solve 70 to 80% of those problems, but sometimes you need to go outside.

A recent example is where researchers were looking at better understanding the AIDS virus. It was video gamers who developed new models through an online game that had players "fold" molecules to acquire points. In the process they discovered how the virus works in the real world. The real breakthroughs come when you go outside your area of expertise.

VB: A lot of companies would feel uncomfortable doing this.

Stephen Shapiro: It's not natural for companies to go outside for a whole variety of reasons.

First of all, it seems safer to stay inside. But there's also an inherent pride issue that takes place. If you are a company that hires really smart people, those individuals believe they can solve every problem on the planet. The reality is this is not the case.

We have a push and pull where management wants a particular outcome but they are not willing to take certain actions because it feels risky. The process, unfortunately, is they are taking a bigger risk by not going externally or finding new partners with whom to collaborate.

VB: It likely seems counterintuitive, and it often won't occur to most companies to seek people with different types of expertise.

Stephen Shapiro: That's true. The biggest challenge is in identifying the expert. This is why all of the different forms of Open Innovation and collaboration become useful. It's not just one form.

The reason why we need multiple forms of collaboration and Open Innovation is that different types of problems can be solved in different ways. Doing an RFP [Request for Proposals] and finding a partner who has expertise in a particular area can be useful, but sometimes it's more useful to do crowdsourcing where we don't know who has the breakthrough solution or where it exists. We need different forms for the problems we want to solve. We need to recognize there are different ways to solve them. This is something a lot of companies haven't fully embraced yet.

VB: Does it surprise you that many large companies continue to have large R&D departments with the attendant large fixed costs to tackle technically complex challenges?

Stephen Shapiro: I'm not sure I find it surprising. It's somewhat natural.

If we look at a bell curve, the middle of the bell curve will be the things you want your R&D department to solve for a whole variety of reasons. You shouldn't be wasting your internal R&D time for the things on the fringes. On the left hand side of the bell curve are the things somebody else has already solved, and you could buy off the shelf. On the right hand side of the bell curve are the breakthroughs you probably would never solve with your team.

I don't have an issue with large R&D departments as long as they focus on their core differentiators and areas of expertise, and recognize they can't solve everything.

VB: If you were running a large R&D department how would you ensure this occurs?

Stephen Shapiro: The first thing I would probably implement, which is somewhat counterintuitive, is anytime we decide to embark on any kind of new endeavor we would first go externally to see if the solution exists in one form or another. Then, based on what we get, I would start building off that. Use the external solution as the platform.

Most companies tend to do exactly the opposite. They try to solve the problem internally and, after spending years and millions of dollars without finding a solution, they then go externally. I would flip it around. If you spend 3 or 4 months going externally and don't find a solution, you haven't lost that much if you're embarking on a big project.

Yes, I would default to "Open" and then go "Internal" for everything else.

VB: Any other approach?

Stephen Shapiro: The other thing is start acknowledging and recognizing people when they go externally, or when they do something that is against the status quo. We need to change the way we praise and monitor progress.

We end up reinforcing the existing culture by saying, "Hey, great job – you've solved this problem. Great job with what you have created." The preferred approach is saying, "Hey great job, you didn't solve it but you found somebody else who could and, by the way, they did it better, faster, and cheaper."

VB: Also provide financial rewards for going external?

Stephen Shapiro: Absolutely. Financial rewards as well as recognition. I've found that financial awards are useful but in some situations praise and recognition can go a lot further. This is especially true in R&D departments, where the people pride themselves on their intelligence. Although money is useful, being set apart from the rest of the crowd through public praise is of more value to them.

VB: You describe three levels of innovation. Have you encountered many companies which have achieved the ultimate level of innovation as a system?

Stephen Shapiro: There are some. I'll give you my favorite company that I think is absolutely brilliant in the way they run their business. It's Koch Industries out of Wichita, Kansas. They're involved in many different businesses ranging from pulp and paper, petro-chemicals, and asphalt to fuels – a wide range of products. They make Stainmaster carpets. They make Lycra. It's not what they make that's interesting, it's the way they run the business that is fascinating. The whole thing is built around the concept of free markets.

Over the past 45 years or so they've built a culture whereby people are given the authority and money to experiment on things they believe will create value. They've become masterful at this experimentation mind-set, and everyone inside the organization is treated as an owner of the business. There aren't many companies that have gone to a total free-market, Darwinian 'survival of the fittest' type of concept. Koch Industries does it better, I think, than anyone else. Their track record is astonishing.

VB: It takes a great deal of tenacity to achieve this type of culture.

Stephen Shapiro: It does and it takes a powerful leader who is totally committed. You saw Proctor & Gamble do it when CEO A. G. Lafley decided they were going to go Open. It took a leader with the intestinal fortitude to make it happen.

When Charles Koch took over Koch Industries after studying Austrian economics and free markets he decided he wanted to apply these same concepts inside the business. He created a thriving ecosystem, and insisted that this would be the way the business would be run. People who do not think and act consistent with the values of the organization are not tolerated.

VB: No doubt they are careful to hire only people who can thrive in their free market environment.

Stephen Shapiro: Yes, and their employees need to be comfortable with ambiguity and with taking initiative. These are not the things most companies put value on. Koch Industries makes sure that each and every person feels a part of the business, thinks like an entrepreneur, and takes accountability and ownership for what they're doing.

VB: "Sometimes the best idea is to stop asking for ideas [from employees and customers]." How could this be the best idea?

Stephen Shapiro: The big issue I have with ideas in general is there are so many of them. Everybody has an opinion, suggestion, or idea. If we ask our employees, customers, or vendors and suppliers, 'What do you think we could do'? we're going to get so much noise. It doesn't mean there isn't any value to it; the problem is extracting the value is extremely complicated. If you have unlimited time, money or resources, I would say, "This is great. Go ask anybody and everybody for what they think, plough through it, and try to find the value in it."

The issue, especially in today's economic situation, is about efficient innovation. It isn't just about casting wide nets. It's about being laser-focused and going where we think the greatest value will be created. I'm a big believer in the quote that's attributed to Einstein, which is, "If I had an hour to save the world, I'd spend 59 minutes defining the problem and one minute finding solutions." From my personal perspective most people are running around spending a full hour working on things that don't matter.

The goal, the opportunity, is to figure out what would create the greatest value based on the need and then find solutions to it.

VB: And address the signal to noise ratio.

Stephen Shapiro: Absolutely. That's something which most companies don't think about. How much time are you spending on things that create value versus things that don't? If you look at what creates value, it's a solution to a need which ultimately gets implemented and creates the commercial value you wanted it to.

The noise is all the ideas people develop which are bad ideas, all the ideas people develop which are good but don't get implemented for some reason, and even the things that get implemented which don't create the value you want. If you could eliminate this noise, you would increase by a tenfold margin the amount of available time to spend on the things that matter.

VB: Are many corporate leaders hearing your message that using a challenge-driven approach to innovation is preferable to an idea-driven approach?

Stephen Shapiro: There are a number of companies that are starting to get the message. The reason is that after trying the idea approach a lot of companies have recognized the value has not been there.

For example, there's a major software company which tried the idea approach, and they got tens of thousands of ideas out of which I think they implemented two, and they subsequently killed the program. A bank I know did something similar. They got thousands of ideas, ultimately did not implement any of them, and fired the entire innovation team because they thought everything they were doing was a waste of time.

Even companies that have been successful with their idea platforms recognize success is limited and the results tend to focus on the quicker wins. Extracting those quicker wins is a great way of engaging people and getting them motivated, but when they start framing challenges they start to extract even more value out of their employees.

VB: How do you recommend companies go about defining relevant challenges that will define a "better box?"

Stephen Shapiro: A lot of this is recognizing you need to take the time to understand what the need is and how to articulate the need. Also, sometimes we ask our customers the wrong questions which give us the wrong challenge.

For example, a mouthwash manufacturer asked its customers, "What do you want?" What they heard from their customers was, "We want a mouthwash that doesn't have alcohol in it." In response the company tried to develop an alcohol-free mouthwash that was equally effective as their alcohol-based mouthwash, and they found it was extremely difficult. When they went back to their customers a second time they heard that alcohol wasn't the issue. The issue was the burning sensation of the alcohol. When they re-defined the challenge to develop a mouthwash with alcohol that didn't burn, it was much easier to solve.

We need to understand our markets more clearly than we tend to. We need to ask our customers better questions and, in a lot of cases, stop asking our customers questions because we lead the 'witness' down the path we think we want to hear. We need to use different techniques to understand what's going to create value.

VB: Most customers don't know what they want.

Stephen Shapiro: They don't. It's why we want to use research methods that have become more popular, like ethnography which is observing people in order to understand what they're doing. Or we can use other techniques to get an understanding of the sub-conscious beliefs and biases of our customers in order to obtain new perspectives. Then we are able to say, "Well great. I see there is a problem which they haven't articulated. What if we created a product or service to help solve that problem?

Of course, we don't want to just talk with or observe our customers. We want to talk with former customers who are no longer with us and with people who never were with us, because those two groups of non-customers are going to give us useful insights.

VB: You describe 'Open Innovation' in terms of 'Crowdsourcing a Solution'. Why has corporate America been slow to adopt Open Innovation as a method of finding a solution to challenges which their internal staff either can't accomplish or it would be too expensive to do so with internal resources?

Stephen Shapiro: I think there are a few reasons and we touched on some of them already. One has to do with the belief we can solve all problems inside our organization, but we know this is not true.

Another reason, and this is usually the first concern people have, is intellectual property protection. There's something about going external that they feel is going to show their hand. Here's the reality. If sharing with the world the question you're working on is going to get everybody else working on the same problem, then what you're focusing on is probably not enough of a differentiator. People need to recognize that the intellectual property protection aspects are not as overwhelming as people make them out to be, but it tends to be one of the biggest issues.

VB: Is it that they don't clearly understand the problem?

Stephen Shapiro: I would say yes, they don't understand the problem. Also, there are so many examples of crowdsourcing gone bad that it raises the question in their minds if this is something they should do.

Crowdsourcing goes bad when the problem isn't clearly understood. If you actually understand the thing you want to work on, and you try to source solutions that solve very specific criteria, it can be highly successful.

The two well-known examples of successful crowdsourcing are the Ansari X prize and the Netflix prize. Each of them was a clearly articulated challenge with very specific evaluation criteria. They did not pay anyone anything until a solution was found which met those pre-established criteria.

Unfortunately, if we look at how most companies do crowdsourcing and Open Innovation, they do it like "American Idol." 'Hey just give us your best ideas and we will give the best idea a prize'. Well, guess what? The best idea of bad ideas is not a good idea.

The problem is, if you say, "I'm going to run this competition for 6 months and we want the best solution" what if it actually requires a 2-year process to find the best solution?

VB: You will get a substandard solution.

Stephen Shapiro: Absolutely, the reason people aren't doing crowdsourcing is there are so many examples of how it was done poorly that people don't realize it actually can work extremely well.

VB: How do companies' adoption of Open Innovation in other countries such as Europe compare with the U.S.?

Stephen Shapiro: It's interesting. When I go to conferences outside the U.S. there's a lot of enthusiasm for Open Innovation. For some reason, many U.S. organizations have been slow to adopt it. You see Open Innovation Managers in companies outside the U.S. but few inside the U.S. These are just my random data points.

VB: The 'wisdom of crowds' works best when "crowdsourcing focuses on 'how something should be done' (solutions) rather than 'what should be done (voting)…" Would you talk about this?

Stephen Shapiro: Sure. One of the bad examples we have was from when Arnold Schwarzenegger was Governor of California. He decided to use Open Innovation and crowdsourcing as a way of identifying a method for solving the financial woes of California. This is one example where people didn't just submit solutions. Everybody could see every solution, and people could vote up the ones they liked. When the State of California ran this challenge, by far the most popular solution offered was legalizing marijuana.

The problem is when we do crowdsourcing this way there's a thing called mobsourcing. People gather in crowds, and they gain momentum around something that is a personal agenda.

If I'm looking for someone to provide me with a solution, there's no agenda in a solution especially if there are very specific measurable criteria around whether or not it's a good solution. When it's a competitive, private submission, you avoid mobsourcing because you don't get people gathering together en-masse behind something which feels popular.

I like the concept of buying solutions and I like it even better than finding solution providers. The usual way of going externally is to issue an RFP and find a company or university which will develop a solution. They don't currently have the solution. The most interesting form of Open Innovation is when you say I'm not going to buy a solution provider; I will buy a solution and I will pay for the value associated with it. Somebody may have already developed a viable solution to my challenge.

VB: Is your use of the term 'mobsourcing' similar to Groupthink?

photo of Stephen ShapiroStephen Shapiro: Absolutely. It's Groupthink in the worst way. Groupthink is something that happens when people start to think the same way. Mobsourcing in some respects is Groupthink on steroids because people's personal agendas come through, and so it has even more momentum behind it.

VB: How do you respond to the observation that Crowdsourcing for solutions to challenges is expensive because often a large number of solutions are proposed which must be reviewed and analyzed?

Stephen Shapiro: The key here, and it's also the key to innovation in general, is to ask the right question the right way of the right people.

For example, when BP had the oil spill in the Gulf Coast and couldn't figure out a solution, they asked the right question: How do we stop the flow of oil? The problem was they didn't ask it the right way. The question was so broad and abstract that they received 123,000 submissions, of which 99.99% were useless.

If you deconstruct a problem and frame it in a more specific way, it becomes a self-vetting process. That is, people will only provide solutions when they actually have the ability to provide something which meets the criteria. The number of submissions drops significantly when you ask the right question the right way.

In many cases you want to ask the right question the right way of the right people. So you sometimes want to be selective of the crowd you ask. Don't always go to an open market.

VB: "The key is to tap into the subconscious minds of your customers, because it is the subconscious mind that really drives behavior." How can we use this for competitive advantage when innovating products and services?

Stephen Shapiro: We touched on this a bit when we talked about the use of ethnography – actually observing what people are doing.

There are also other techniques that are interesting. The problem is most focus groups ask questions that lead the witness. If you want to do a focus group, and usually it is best done through one-on-one interviews, you ask people to tell you stories. Use of metaphors and storytelling without leading people down a particular path helps them articulate their unconscious beliefs. If you're very good at being able to extract these types of things, you'll be able to get meaning and identify needs that people haven't been able to see.

You can observe someone using a product but you can also have them talk about their experiences with the product – what's working and what's not working. It is best done not at a conscious level but at the story or metaphorical level.

VB: Working with focus groups is much more than just being a good listener.

Stephen Shapiro: It is much more than being a good listener, but listening with an unbiased perspective is important. Unfortunately, a lot of people who do this have agendas even when they're doing the listening. They think they're listening when, in fact, they're actually leading the witness by subtle cues. The best at this are the people who can truly observe without biasing their observations with their own personal beliefs and thoughts.

VB: "Eliminate a pain and they will come." Should this be the key focus for most innovation initiatives?

Stephen Shapiro: I'm a big believer that if you're the aspirin for your customers' pains, they will be much more interested.

One of the examples I talk about, which is a fascinating one, is the ATM machine. In the mid-70's Citibank wanted to roll out ATM machines throughout New York City, and it actually hurt their business. Customers started to leave when they thought their tellers were going to be replaced by machines. Also, people didn't understand how to use the machines. Citibank thought they were creating something great by giving people 24-hour banking access but it didn't work.

I'm from Boston and I remember this very well. In February of 1978 there was a massive blizzard – my hometown got 4 feet of snow in 24 hours. New York City was blanketed by 2 feet of snow and everything shut down. The only way to get money was through the ATM machines. Citibank employees were going through the streets on ski's filling up the ATM machines. After the blizzard, the use of ATM machines went up drastically and Citibank's shares grew in value. It was the pain of the blizzard which created the need, not the other way around.

VB: This pain was through experience.

Stephen Shapiro: It was. If you understand the pain your customer has and you solve it, they're always going to be more likely to want to buy your product or service.

I love this example. A magazine was looking to answer the question which was what would guys be more interested in: articles on losing your gut fast or articles on getting 6-pack abs? Although most people intuitively think 6-pack abs are what we all want, it was the "Lose Your Gut Fast" article that was much more popular. This was because if you have a gut getting 6-pack abs seems impractical. Once you have lost your gut 6-pack abs are now desirable. So you need to solve the pain before you can give them the gain. If it's too complicated in the beginning they're not going to want your great whiz-bang solution. It's a two-step process.

VB: When you describe the Innovation Targeting Matrix to your clients do they usually rethink their business strategies? [Vern's note: Stephen Shapiro's matrix divides a business's capabilities into three levels of strategic importance. Costs should be contained in support capabilities, such as HR, IT and finance, and this work should be minimized and preferably outsourced. Efficiency is the target for core capabilities such as order fulfillment and product support, and this work should be simplified and automated. Innovation is the strategy for differentiating capabilities that continually set a company apart from its competitors.]

Stephen Shapiro: The Innovation Targeting Matrix is designed to help you understand what sets of questions are most valuable to work on. The matrix says that innovation is not something that should happen everywhere inside of a company. It should only happen for the things that differentiate you. Until you can articulate the things that differentiate you from the competition you won't even know where to focus your innovation efforts. This is not about innovation for innovation sake, which is a casting of wide nets and trying to solve every problem. It's about being focused.

The Innovation Targeting Matrix helps you understand what types of problems you want to innovate, and which ones you want to replicate. Replication and best practices are useful for certain types of things.

VB: You advise employers to stop recognizing people for doing their jobs, and instead give recognition and reward to people when they go beyond their jobs and do things that are unexpected. Will this approach invariably contribute to a highly innovative culture in an organization?

Stephen Shapiro: Our natural tendency is to praise people for what they were hired to do. If engineers solve an engineering problem and are given a pat on the head or other forms of congratulations it's great, but it reinforces the status quo.

There will be a positive effect if we praise and give public recognition to people for doing things that are consistent with the values that we want to instill in the culture of the organization. For example, if we want to create a collaborative culture which is willing to consider Open Innovation, we should praise staff when they go "open" and achieve results at a tenth of the cost and a tenth of the time. Going external doesn't have to necessarily be outside the company; it may be a matter of partnering with other departments or business units. The more we focus on the behaviors we want to promote the more we will reinforce the desired values and culture for the organization.

VB: Would you talk about the 'build it, try it, fix it' as the preferred model for innovation as compared to 'analysis paralysis'?

Stephen Shapiro: Challenges typically fall into one of two categories: technical and marketing.

An example of a technical challenge is I want to develop a new type of light bulb or a new type of compound. A marketing challenge might be I want to get women to drink beer because that's an untapped market, or I want to get teenage boys to shave because right now teenagers are proud to have fuzz above their lip so we can't sell them razor blades.

Technical challenges require experimentation and failure. Open Innovation can help solve these types of challenges by creating a parallel process of successes and failures where numerous people are working on your problem at the same time.

With marketing challenges we don't know what's going to work until we actually try them in the market. All the analyses in the world will not give us any insights into the market until we actually test it. So what we want to do is build a small experiment, try it out, learn from the experiment, and then fix and scale the experiment. In many respects this is the scientific method in play when it comes to market types of challenges.

VB: It reduces your financial risk.

Stephen Shapiro: It reduces financial risk. It reduces public risk. It reduces costs and, at the end of the day, it increases the relevance to the market which is the name of the game.

VB: One of your tips is "Hire people you don't like." How does this help us be more innovative?

Stephen Shapiro: Innovation, unlike creativity, is an end-to-end process that starts with a problem, issue, challenge, or opportunity, and ends with value creation.

Each step of the innovation process requires people with different skills so the first step of defining the challenge requires people who understand markets and the available data, and who are extremely analytical. We start with their analysis to understand what matters and then we go to more creative people who will focus on finding solutions. Then we will get people involved who are much more organized and goal-oriented, and will focus on how to plan and execute on these plans. We also need people who are good at engaging the hearts and minds of the group or team working on the innovation initiative.

Unlike conventional wisdom which says that opposites attract, in fact, opposites repel inside organizations. As a result we hire people who fit the mold. We hire people who are like us because we tend to like them more. It's a 'birds of a feather flock together' type of thing. People we don't like tend to annoy us, but that annoyance is probably because they see the world differently and have different values.

If you're a creative organization, such as being involved in advertising and branding, make sure you hire people who are highly organized and methodical. They may annoy you but they'll help you grow your business. If you're a research firm or a pharmaceutical company and have a lot of PhD's, make sure you hire people who are more empathetic because understanding the people aspects of the business will be key to getting things implemented.

VB: Hire your opposite.

Stephen Shapiro: Exactly.

VB: You talk about 'non-value-add' work for knowledge workers. Is there any relationship between this and the goal of many companies to follow 'Best Practices'?

Stephen Shapiro: I think there is. The objective is to make sure your most valuable resources are doing what's most valuable. There are things we can do to make it happen, but they're not necessarily best practices. A lot of times we use technology as a way of getting our knowledge workers to do knowledge work.

Although this tip for many will seem somewhat obvious – getting our people doing what it is we hired them to do. In practice we don't do it. This tip is a reminder of the things we know we should do but don't.

When I look at a sales organization;, for example, salespeople spend about 30% of their time selling. The other 70% is spent on travel and meetings and in bureaucracies, rather than with their customers. If you can get your salespeople to spend 60% of their time with customers it effectively doubles your sales force without hiring another person. They need to be encouraged to off-load the work they're doing which isn't of value in terms of sales.

VB: Is there a relationship between size of organization and non-value-add-work?

Stephen Shapiro: There often is a relationship because bigger companies add layers of bureaucracies to protect themselves. The crazy thing is a bigger company should have the ability to create infrastructure, support groups, and other things that would achieve exactly the opposite. You would think a larger company would have the capacity to let people hyper-focus on what they do best, but unfortunately organizations tend not to operate that way.

VB: You pose the question, "What if, instead of looking for realistic solutions to challenges, you started with solutions that seemed impractical?" Would you answer this question?

Stephen Shapiro: Most people try to solve a problem by thinking in a linear fashion. I'm currently at point A and I want to get to point B. Unfortunately, this limits our thinking because point B becomes the high water mark. If you ask people to think of something that goes way beyond how they normally think, it's just like what magicians do. They cut people in half without killing them. You almost always get greater breakthroughs if you ask people to go way beyond than if you ask them what is possible, practical and legal.

The practical example of this is Formula One racecar driving. They're not asking, 'How do I create a better road car? They're asking the question, "How do I create a car that goes really fast and has particular attributes'? Well guess what? Formula One technology makes its way into road cars.

Another example is space travel and explorations. There are new technologies based on the Hubble telescope technology which will allow us to do mammograms in more effective ways. We most likely wouldn't have found this by trying to find a more effective way to do mammograms. We created this technology which was much bigger, and then applied it to a smaller problem.

We can also do this as an intellectual exercise. How do I create something much bigger and then apply it to a smaller problem?

VB: When you saw the recent tragic Indy accident did you wonder what impact it would have on car racing teams?

Stephen Shapiro: I didn't see the accident, but certainly I heard about it. Sometimes these horrible things can be catalysts for new technologies and new ways of doing things that might ultimately become of value to a broader market.

I worked in Formula One, which is similar to Indy racecar driving, and there was a significant impact when Ayrton Senna da Silva was killed while racing in 1994. New regulations were instituted, and they also developed some cool new technologies to protect the driver. I don't think there has been a death or a major injury in Formula One since that accident.

VB: Are there a few of the 40 ways to out-innovate the competition which you describe in Best Practices Are Stupid that are your favorites when advising companies how to be more innovative?

cover of Best Practices are StupidStephen Shapiro: I have several favorites. The one I really like is to make the assumption that someone else has already solved your problem, but they've solved it in a fundamentally different domain.

One example that I love is a toothpaste manufacturer which wanted to create whitening toothpaste. Instead of focusing on creating whitening toothpaste they asked themselves, 'Who makes whites whiter?' They recognized that laundry detergent, which was a different division inside this big company, makes whites whiter. They do this by putting a blue dye inside laundry detergent which creates an optical illusion preventing the reflection of yellow. So they created toothpaste which has a blue dye in it.

Gas pipelines is another example. They were trying to find a way of sealing fine cracks in gas pipelines which had plagued the industry. They found a correlation between capillaries in a finger and gas pipelines, and created an inert, coagulant ingredient that goes inside gas pipelines.

When you assume someone else has solved your problem you need to frame the question in a way which makes the assumption that somebody else has solved a problem like yours. Then you need to think about what is this problem like, and this leads you down particular paths.

VB: Is there anything else you would like to tell us about how 'best practices' may be stupid?

Stephen Shapiro: We've covered a lot of things. The most important thing is a lot of companies in the name of innovation are doing things that are having the opposite effect. This applies even to the way they measure things.

A lot of companies are interested in measuring employee engagement. The problem in measuring engagement is that engagement can equal noise and, if we come back to the Signal-to-Noise Ratio, maybe it's the wrong question.

We need to look beyond solutions for coming up with new or improvements to existing products and services. The key is to ask different questions even about the way we innovate. If we want to innovate how we innovate we should be asking different questions about ways to improve the way we innovate. Giving employees 15% or 20% of their time to work on things that interest them sounds like a great idea, and it might work for Google and 3M. Most companies are not like Google or 3M. We need to recognize that our companies' cultures are different. We also need to ask what did Google and 3M really get out of this free time approach.

VB: When we last spoke we discussed Personality Poker. Are you still using this card game in your consulting practice?

Stephen Shapiro: I love Personality Poker. I still use it all the time.

I use it first of all to get across the point that divergent points of view are needed. Organizations have personalities. We talk about the personality of people but we don't often talk about the personality of the organization.

If we want to create breakthrough innovations we need to recognize that the personality of the organization will ultimately limit its ability to innovate. So I still use Personality Poker, which introduces the four steps of the innovation process. It also helps articulate the value of diversity of style.

VB: It helps people understand the need for diverse personalities to be involved in solving challenges.

Stephen Shapiro: Absolutely. The most useful thing that comes out of it is not for people to understand who they are, but to understand who they are not. If they're playing Personality Poker and they have five cards in their hand, the odds are there are a couple of styles that are not in their hand. Those are the people they want to seek out when they're working on a problem.

One of the things people get out of Personality Poker is that when you're faced with a problem don't go to the people you normally go to. Go to the people who create a full deck in your hand – make sure that you have all the styles on your team. If I'm missing clubs, which is the planning-oriented people, they're the first people I'd go to when I have a problem because they will help me see the problem from a different perspective. If I were missing spades I'd go to them as they prefer to focus on facts and principles and will be strong in defining the opportunity. Similarly, diamonds for ideas and experiences to find solutions. And hearts to engage the hearts and minds of people.

VB: What projects are you currently working on?

Stephen Shapiro: Interesting question and interesting timing, because next week I'm actually taking an entire week off to think about what is next. I've spent the past two years working on Personality Poker and Best Practices Are Stupid, and being busy on the road practically non-stop. I have come to recognize it's hard to innovate when you're going 100% flat out.

One of the tips in Best Practices Are Stupid relates to the performance paradox. The more we focus on the goal, the less likely we are to achieve it. The more we try to be innovative, the less innovative we are. The more stress there is and the more work there is, the less likely we are to achieve what we want.

Next week is my time to not be so focused on what I want to create but rather to de-stress, relax, and hopefully from there some new emergent ideas will come forth.

VB: You are going to do what so many talk but few actually do – take time to think.

Stephen Shapiro: Absolutely. I'm a big believer that if you make a small investment in time to think it creates dividends in the long run.

As a very simple example, a fellow I know, who works for a business which creates smells and scents, used to create 40 new smells every day. It was a daunting task for his team. He found that if, at the beginning of the workday, his team spent 30 minutes meditating it significantly increased their throughput. This 30-minute investment had a massive payoff. The same thing is true with down time. We need to make sure we're investing in down time in order to increase the level of creative thinking and productivity.

VB: This down time is both corporately and personally.

Stephen Shapiro: Absolutely. We need to make sure, even if it's in the middle of the day, that we take the time to reflect. Instead of being on the go all the time, block some time in the calendar to not focus on anything. Relax, get a massage, or think about something unrelated or tangentially related to the things being working on, and a lot of the time breakthroughs will come.

VB: We look forward to hearing what you decide next week. No doubt your subconscious is already working on this challenge. Thank you, and again congratulations on the recent publication of Best Practices Are Stupid: 40 Ways to Out-innovate the Competition.

Stephen Shapiro: I've got some things that have been bubbling up over the past few days and I will share them with you when I figure out what they actually are.

Author Stephen Shapiro advises that an efficient innovation process starts with a challenge and ends with value creation.

The catchy title for his book reminds us that 'best practices' are based on historical practice, and they may not be suitable if we wish to differentiate ourselves from the competition. However, he did say they are not always stupid.

Stephen Shapiro identifies 40 ways to out-innovate the competition. These are certainly worth considering as they contain much wisdom.

Stephen Shapiro's Bio:
Author Stephen (Steve) Shapiro earned a Bachelor of Science degree from the School of Operations Research and Information Engineering at Cornell University.

During his 15-year tenure as Associate Partner with the international consulting firm Accenture he established and led their Global Process Excellence Practice, delivering innovation training about process excellence principles to 20,000 consultants. In 2001 he left the management-consulting world to promote his first book, 24/7 Innovation, and to be an advisor, speaker, and author on innovation.

During the past twenty years, Steve Shapiro's message to hundreds of thousands of people in forty countries around the world has focused on how organizations bring together divergent points of view in an efficient manner.

Steve Shapiro is the author of Best Practices Are Stupid: 40 Ways to Out-Innovate the Competition (Penguin Portfolio, 2011), Personality Poker®: The Playing Card Tool for Driving High-Performance Teamwork and Innovation (Penguin Portfolio, 2010), The Little Book of BIG Innovation Ideas: 75 Tips for Turning Creativity into Profitability (2007), Goal-Free Living: How to Have the Life You Want Now (Wiley, 2006), and 24/7 Innovation: A Blueprint for Surviving and Thriving in an Age of Change (McGraw-Hill, 2001).

His work has been featured in Newsweek, Investors Business Daily, The Wall Street Journal, Entrepreneur Magazine, and the New York Times. He has also been interviewed on CNBC and ABC News.

Personality Poker® was on Inc Magazine's bestseller list for November 2010, and selected as one of the best business books for 2010 by 800CEOREAD.

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