Beyond Incremental Innovation, Part 2
IdeaConnection Interview with Langdon Morris, author of Permanent Innovation, and Managing the Evolving Corporation; and co-author of Fourth Generation R&D
"An innovation capability is therefore not just a change neutralizer – it's a change maker." (Langdon Morris, Permanent Innovation
, page 213)
Which of the business model innovator companies described in your book, Permanent Innovation
, is your favorite success story?
Southwest Airlines is a great example because it was driven by a combination of vision on the one hand, and intuition on the other. The founders said, "We're not getting good air service in our market." Their market was in Texas, particularly San Antonio, Dallas, and Houston. So they said "We're going to create a company that serves this market." This was in the early 1970s, during the first major energy cost crisis in the U.S., when rising costs were a significant challenge for the major airlines.
The Texas market was the scope of their ambition. They didn't set out to be the huge national airline they are today. Southwest Airlines' value proposition was a completely different business model than its competitors, and the founders discovered that their business model was attractive. In response they quickly scaled the business model up to a national basis.
They created an innovation culture, which has people throughout the organization contributing. It exemplifies a lot of the important principles and concepts about innovation leadership. The leadership did a fabulous job of doing what we talked about with Toyota – getting everybody in the organization thinking about how to improve the company and create value. Southwest Airlines is a fabulous story. It typifies what any business model innovator should be trying to do.
There are a number of good examples where employees are a big factor. They are turned on, excited, and enthusiastic. They joke with customers. They create a culture of service, which is a differentiator as well.
Getting people involved in representing a company's value proposition in the market is very important, absolutely.
Are you saying the secret is getting all employees to understand the company's value proposition so that they can further it.
It is definitely important, and I mentioned Southwest Airlines because they are so clear about the culture they have created. They rely on humility, humor, and frugality. Employees have a sense of humor. They are humble people, and like to serve. They like to be part of an airline.
They have a completely consistent brand identity, and it clearly comes from the top. Look at the way you are treated when you make a reservation, in the airport, and on the plane. The way they advertise and market the company reinforces their brand. Absolutely everything they do reflects the values of the founders of the company – going back 35 years ago.
"So the goal of facilitation is to enable 100% of the people to be idea generators and promoters, and to leverage the critical insights of idea killers as healthy skepticism and constructive criticism, rather than sucking all the energy out of the creative process." Is it possible to neutralize idea killers' negative energy when you're facilitating groups? Have you managed to do so?
We find that it is not a problem. The issue is to create a context where coming up with new ideas is natural, normal, and expected. There is a point in the process when you have to think critically about those ideas, and figure out which are good and which are bad.
Most ideas are bad ideas. Most ideas should not be implemented, but if you kill them the second they are born you'll never find out if they are or are not good ideas.
Part of the solution is separate the people who may have a naturally negative approach to ideas from the idea creators. You only bring them into the process when their critical thinking can make a contribution.
It has also been our experience that the people who are critical thinkers and come across as negative idea killers aren't that way in their lives. It is somewhat an adopted persona in corporations. If we create a different set of ground rules for how we work together it turns out these people can modify their behavior and be as prolific as idea creators as anyone else. This is true as long as they feel safe and feel their inputs are going to be respected.
It may also depend on how the question is asked when they are participating.
It is a gradual process. People need to know they should take their time when creating ideas, that the process is not trying to filter or reject their ideas. There's plenty of time for filtering and making decisions down the road. It is not like we're going to adopt every idea that comes up. We are going to take as many ideas as possible and then figure out which are right for us right now.
"…collaboration is in a fundamental way the very foundation of business success. It is also a key foundation of innovation, because success at innovation requires massive amounts of effective collaboration." Is the social nature of the innovation process often forgotten when organizations try to increase their innovation results?
I think people are now aware of the social nature of innovation. They may not be sure what to do about it from a management perspective but I think they are quite aware.
That is where having a process helps.
Absolutely. A process, a framework, or a structure. Any of those words can describe what you're looking for, which is a way to bring coherence and order to an inherently messy process. We're talking about new ideas, the need to build on ideas, and to change, adapt, and be flexible.
You don't know at the beginning of the process what the output is going to be. You don't know what the best idea is going to be. You haven't generated the ideas yet. If nothing else, the challenge is to live with the messiness, the ambiguities long enough to understand that the best concepts and ideas are still to be processed.
It's a matter of balancing two things. You can't live in ambiguity forever. There is a time for ambiguity, and a time for making decisions and moving on.
You talk about the plight of General Motors in several places in your book, such as their scaling back of support for Saturn despite its business model of transforming the car buying experience, poor collaboration between management and labor, its obsolete market segmentation model which has different subsidiaries producing different models of cars, and in the 70s and 80s standardizing the look of its cars to achieve manufacturing efficiencies. Is GM still destined for oblivion despite the U.S. government's bailout, or have its' leaders learned from their past failures and created a better vision of what should be?
I wish I knew the answer to that question. Likely if I knew them personally I would have a clearer idea, but I don't.
We only know what they are saying and doing by what is reported in the press. We'll only know for sure if things start to change.
You say, "…90% of all the scientists who ever lived are still alive, and still working." Does this help to explain why competition in the business world is increasing at an ever-escalating pace?
Absolutely, yes. Science is clearly driving change. Science and technology drive social change, which in turn drive change in the marketplace.
My comment, by the way, comes from a book that Gerard Piel wrote in 1972 called The Acceleration of History
. At the time he was the head of the Scientific American Magazine, if I'm not mistaken. This article had a big impact on me – 38 years ago this guy recognized the fundamental pattern of modern society. Science and technology drive change.
One of his points was that we didn't have the methods, tools, and processes for making good decisions in a rapidly changing environment. Unfortunately we still don't. Businesses are grappling with this issue and starting to do a better job of it, but clearly, in government and society, we're struggling. If you look at the debates that go on in the U.S. Congress, for example, it's clear we still don't know how to manage society in the midst of rapid change.
We also know that change is always accelerating, so let's look at today's world situation. We're seeing a lot of scary headlines in the newspapers. In America we graduate an x number of professional engineers every year, but in China about 5 to 10 times that number graduate as engineers. We are accustomed to how American and European technology drives change, but we're about to be surprised by the fact that technology from India and China is going to drive change even faster. And it is going to be a struggle for people and companies all over the world to adapt to this.
There is so much to know and do to establish permanent innovation. In fact, you identify 38 great ideas for getting started. Does it surprise you when you encounter those who don't feel a sense of urgency to start their innovation journey "now"?
If they haven't started they're hurting themselves. It means they are living in a bubble, and clearly their bubble is going to be burst. It's inevitable.
Have you received feedback from any company leaders saying they have worked through your 38 ideas for getting started with implementing permanent innovation?
Nobody has ever come to me and said they did all 38, but a lot have said they pushed to do many of them. I would love it if somebody did do all 38!
To do all 38 would be an incredible challenge.
I don't know that it would be the right thing to do. The message of the book is "you need to think strategically, and make very specific choices." That's the message of "Ready, Aim and Fire."
I wouldn't necessarily advocate that anybody try all 38 of these ideas. I would invite them to find the 5 ideas that will make the biggest difference in their organization and start there, and then maybe try 5 more. It's not a question of quantity. It is a question of doing the things that create a culture and process that enable the right kinds of innovations to emerge at a fast enough pace.
So the strategic approach would be to look at those 38, see which fit your particular business culture, and start working with them, rather than being overwhelmed by all 38.
Exactly. It's my hope that out of those 38 ideas people will pick the ones that are right for their organizations, will catalyze their thinking process, and will help people discover what they need to do. Maybe numbers 39 and 40 are the most important for your organization!
The purpose of a book like this is to give a framework, share stories, help model the way things should operate, and, perhaps most importantly, to catalyze the thinking process. Success would be if the book helps people think more clearly about what they need to do to make innovation a fundamental part of their organization. And hopefully help them to become leaders in their organizations.
"Even today with all the talk about the need for innovation, the actual delivery of innovation remains the exception, and companies do indeed have a high mortality rate." Have you figured out why managers in every company don't aggressively strive to create a "true innovation culture" rather than a "status quo culture," especially in light of the many excellent examples such as Apple, Cisco, and Toyota?
There are probably a variety of explanations.
What keeps some individuals from embracing innovation? It is fear, right? They are afraid of change, or failure. Fear of failure is a huge barrier to innovation. In order to succeed at innovation you have to love to fail, because you understand that you have to fail a lot to get good at innovation.
Ignorance can be another barrier. If people don't understand there is a need for change they won't embrace the innovation process. Once they recognize how change affects the market they will realize that innovation is one of the few creative responses to dealing with change.
Also if people are trained poorly they may have the wrong models in mind and make bad assumptions about the way things are.
If the social environment of their organization's culture doesn't support innovation then this becomes a barrier.
The tendency of company leaders to want to preserve the status quo is not a new problem. Joseph Schumpeter, the great Austrian economist writing in the 1930's and 1940's, had a fabulous quote about this in a book published in about 1942. He said that business leaders, and I'm paraphrasing, are typically focused on the structures and processes associated with stability, when, in reality, they should be focusing on adapting to change, because change is the reality of business. Stability is an illusion.
Have you had any additional insights about permanent innovation since your book was published?
We are always working with companies and this constantly leads us to think about new approaches to the concepts and processes of innovation.
We have published four additional white papers about innovation since the book was published. They cover innovation portfolios, innovation metrics, innovation culture, and the new business model. They are available for free download on our web site.
In Permanent Innovation
, published in 2006, you recommend a number of books as excellent resources on the topic of innovation. Have you any recommendations for more recently published books?
I'm looking at one on my bookshelf called The Black Swan
– a lot of your readers are probably familiar with it. It's a study of the financial markets. It was published in 2007, and predicted the financial collapse of 2008. It's pretty amazing. The book challenges your thinking about strategy, makes you think about the relationship between innovation and strategy.
I have recommended The Black Swan
to a lot of people. Some were a bit offended by the author's tone because he is very proud of his insights. But they were really good insights, and, if you look past his tone of voice, there is a tremendous amount in the book that will provoke your thinking.
Another fabulous book is Inside Steve's Brain
by Leander Kahney. "Steve" is Steve Jobs, of course. Published in 2008, it is a discussion of the innovation process at Apple Computer. I loved it because it describes some of the important things about the innovation process.
What I also found very interesting is that the author doesn't realize that there is an innovation process. The book describes an almost complete system for innovation, from both a thinking and management perspective, but the author doesn't put it all together into a system.
We reverse-engineered the Apple innovation process using that book and a number of other sources. Inside Steve's Brain
gave us a tremendous number of insights. We have very detailed case studies of Apple in our next book, which we're working on right now.
You're working on your next book?
Yes, it will be called, The Innovation Master Plan
. It targets the question of how managers can create a sound overview of the innovation process in the most systematic way possible.
It also focuses on business model innovation, because we think business model innovation is the least understood, and perhaps the most important, of the four innovation types.
This week we are publishing a white paper, in the International Journal of Innovation Science
, on business model innovation. We're in the process of expanding that white paper into the book, which we hope to publish in the fourth quarter of this year.
It would be great to talk to you about your new book when it's published.
I'd love to. Thank you very much.
Is Fourth Generation R&D,
published in 1999, still a timely book to read?
People tell me it is all the time. I still get emails from people talking about Fourth Generation R&D
. A fellow who was reading it recently emailed me to say he found it a useful read about 'permanent innovation'.
At the risk of not being humble, Fourth Generation R&D
is now considered a classic in R&D management literature. It's used as a textbook in universities all around the world. When I go to India people there talk to me about the book.
It has been translated into Chinese and Korean, and is used in universities in China and Korea. So it still appears to be pretty fresh.
The Knowledge Channel
was published in 1999. Has anything about the Internet surprised you subsequent to writing this book more than a decade ago?
I think the book is pretty accurate in the way it identified the directions in which the Internet would evolve. It doesn't anticipate the success of companies like Google, Yahoo, and eBay, but it explores a lot of the principles of the Internet as of 1998 and 1999.
The explosion of the Internet has been a phenomenal thing, which the book doesn't predict to an accurate degree, but the fundamental analyses and frameworks covered in the book are still valid. We still use a lot of them. In fact, some of them have been revised for our new book on the Master Plan.
VB: Permanent Innovation
has been translated into two Chinese languages and Japanese.
Yes, Chinese and Japanese.
What has been the reaction of readers in Asia to Permanent Innovation
They've been enthused about it. We've done a lot of in-house workshops in some of their major companies, multi-nationals, as well as public workshops. The Chinese are very interested in innovation.
China built its economy based on mass production. Now the Chinese know that in order to continue to build their economy they have to make a shift, and become an innovator in order to find their market niche in the world. The Premier of China has established innovation as a systemic national priority.
We are happy to share our ideas with the Chinese people and, in fact, are partnering with a major Chinese University – the Shanghai Jiao Tong University's Antai College of Management – to create the China Institute for Innovation. Together we're making our work, and the work of a number of other leading thinkers, the curriculum for this Institute, which will be training corporate managers as well as university students.
Should business people in North America and Europe be afraid?
I don't think fear is a particularly good idea, but they need to be aware of what is going on for sure.
They need to wake up to what's going on in Asia?
I think they are awake. I don't think anyone has any illusions about the European or American model still being superior. Clearly the Chinese have done some things remarkably well. They have some major issues in their society with which, given our value-system, we are not comfortable, but from an economic standpoint, there is no doubt that China is going to be a dominant force for the rest of this century. We have to pay attention to this fact.
We had to make a choice at InnovationLabs
. We are an innovation-consulting firm, with not a lot of people. We're very focused on product and service offerings, and we realized that, for the success of our business, we had to understand what was happening in China. Our ways of addressing this was to go to China and begin to build relationships with companies and executives there. It has been tremendously important for us. It hasn't been a huge part of our business from a revenue point of view, but it has been incredibly beneficial in helping us understand the trends and patterns of global business.
Doing business in China is simply part of being a responsive, self-responsible entity.
: You were one of the four co-founders of InnovationLabs
in 2001. Would you tell us about the services you provide?
We work with companies all around the world in three different areas of their businesses. We offer a lot of help with innovation methodology; with helping to improve the way they practice innovation internally.
We also work with companies on their innovation process. Companies ask us to help with a particular issue or an innovation project they're working on.
This leads us into a lot of strategy work because innovation and strategy are closely linked. In the process of planning innovation, we have to integrate a company's corporate strategy. As a result, we get involved in facilitating or helping them improve their strategy.
Innovation requires effective collaboration of people across different business units, or between organizations. Therefore, the third element of our business is facilitating large groups, anywhere from 20 people to 100's of people in very time-compressed workshops. These workshops follow an innovation methodology as well. They enable people to solve complex business and innovation problems in a very short amount of time.
Is time compression a useful part of the creative process?
It is very important because people in organizations often try to do innovation through a committee process. They get a multi-functional team together, and meet for a couple of hours a week over a long period of time. The problem with this approach is it doesn't allow for enough of the kind of thinking required to do serious innovation.
Getting people together for two or three days in a workshop can accomplish what otherwise would take months, because everyone is together and able to concentrate on one issue. They can look at the nuances, complexities, and main issues of a complex innovation project. This is much easier than working a couple of hours a week over a longer period of time.
You say it is easier. Is the result also often better?
Oh yes, much better. Less time and higher quality are the two main points of value with this approach.
I assume InnovationLabs is an example of an organization characterized by permanent innovation?
Absolutely. We do our best to embody our principles in how we operate as a company. We always encourage new ideas from our clients, partners, associates, and each other.
We've evolved our business practices tremendously over the last 5 to 10 years. We do our best to embody those practices. We think they work and make it fun.
What excites you about innovation?
I love innovation. Innovation is always a thrill and a challenge.
I'm an ideas person and I love new ideas. My favorite book of all time, written by Peter Watson, is Ideas: A History of Thought and Invention, from Fire to Freud
. It's over 800 pages long and a brilliant piece of scholarship.
To me, innovation is the way humans can adapt reality to fit what we think ought to be. I just love it – it's a blast.
What sparked your interest in innovation and led to it becoming your lifetime focus?
My mother was an artist and my father an architect. At the dinner table our conversation was always about design, ideas, and creation. That was almost all we talked about; it was the environment I grew up in. As a result, innovation is what made sense to me for a career.
Your brain started to associate creative and innovative thinking with who you are as a person.
Apparently. There was also a pre-natal influence, because my parents were talking about these things before I came along. I grew up in a family culture where creativity and expression were encouraged and ever present.
I've always found that the most satisfying things I do, personally or professionally, involve creativity. I like to write because I find it a satisfying, creative activity. I'm always happiest if I'm creating something – a piece of art, writing, gardening, design, or whatever.
Are you an artist as well?
I used to paint. Now I build furniture. We're always trying to figure out how to make our house look a little better.
Do you ever find time to sleep?
It's a real struggle. It may be a multi-generational thing; my kids never want to go to bed. They'd rather stay up and do things, but they have to go to bed so they can get up and go to school the next day.
It's always a challenge to decide to retire for the night. I do a lot of my writing in the evening – I write until I fall asleep.
Any final advice for our readers?
We've talked about so much I don't think I could add anything.
Thank you. It's been a delight to talk to you.
I appreciate your interest and including us in IdeaConnection. We're happy to be a part of it.
Langdon Morris identifies ten principles of permanent innovation – "a repeating process of value creation and organizational adaptation." A few examples of these principles are:
- Innovation is essential to survival [of organizations], and all innovation is strategic.
- The longer you wait to begin innovating, the worse things will get.
- Innovation without methodology is just luck.
- Great innovations begin with great ideas; to find them, identify unknown and unmet needs.
Langdon Morris also offers 40 suggestions to assist in thinking creatively and productively to ensure permanent innovation exists in our organizations. All are definitely worth considering. During our interview he mentioned suggestions 39 and 40, so I will tantalize you with them:
39. First, take some quiet time to think.
40. And lastly, start your innovation journey now.
Langdon Morris' bio:
Langdon Morris is a co-founder and partner of InnovationLabs
. He is a frequent speaker at workshops and conferences worldwide.
Morris is the author of Managing the Evolving Corporation – Industrial Engineering
(1994), The Knowledge Channel: Corporate Strategies for the Internet
(1999), Permanent Innovation: The Definitive Guide to the Principles, Strategies, and Methods of Successful Innovation
(2006), and co-author with William L. Miller of 4th Generation R&D: Managing Knowledge, Technology, and Innovation
In the fourth quarter of 2010 Langdon Morris' new book will be published: The Innovation Master Plan: How to Create a Winning Business Model
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