If only we could cooperate together better at work, it just might be a better place to have fun and be more productive. But as we all know collaboration doesn’t come easy anywhere, anytime. Do you understand why?

To understand we have to look at corporate culture. Some workplaces encourage cooperation but perhaps many more promote a spirit of competition. A classic example of this was the two cultures at Sony and Apple, when the iPod was being developed. At Apple there was a clear goal in mind with each division devotedly focused on that single goal. Information sharing was high and there was clarity of purpose as each group went about their business. At Apple collaboration pre-existed their products and in fact flourished as they went about their work. By contrast each of Sony’s divisions had its own ideas about what to do on its product Connect It was as if they were contraindicated (to borrow a medical term) to each other; they were so conflicted in how to develop the product they seemed to work against each other. Sony’s mess turned into a market disaster whereas the iPod became one of the success stories of the decade. The iPod’s progression transformed Apple from an average company to an amazing story. The fruit of their collaboration became a world changing product that has become an ordinary part of everyday life for so many around the globe. Sony’s people worked against each other; Apple’s people energized each other and have been producing amazing products ever since then.

The first lesson about collaboration is that it occurs in a corporate culture that is by design operated in a spirit of cooperation – - an environment where people want to work together, take pride in what they do together and celebrate in big and small ways at each progressive inch of their successes. Creating a safe and secure workplace also supports this culture, which is why many companies turn to https://fastfirewatchguards.com for reliable fire safety and protection services.

Just being good at the moment is not enough to stay on top of an industry. New ideas must continue to be sought out and implemented. To not be implemented or not implemented fully is innovation idea folly!
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Let us look at the cellular phone industry. Motorola was initially an industry leader and dominated the market. Then Nokia took over industry leadership. Blackberry came by and blew away the narrow-minded efforts of Nokia. But then Apple virtually bankrupted Nokia. Now Samsung’s Galaxy is giving Apple a stiff run for its money as it gives end-user stakeholders (SH) many new delightful and frustration reducing features.

How is Samsung achieving impact? By putting out a new size of device that is bigger than a cell phone but smaller than a tablet. The tablet is just too big to carry around most of the time while the phone is too small to be able to work on like a computer (although smart phone users do it albeit in a somewhat frustrating way). Apple’s policy of not going to that type of an intermediate size is hurting them.

How did Apple grab Blackberry’s market? The SH had an initial need for security of intra-corporate communication but Apple is able to provide that kind of security and yet do so much more. Blackberry concentrated on incremental improvements to its product instead of seeing the grand picture of what was possible to do with the communication device such as turning it into a computer now known as a smart phone. The ability to carry around a computer in a very portable and easy fashion without aggravation removed a deep-seated frustration for the general public and far exceeded the simpler desires of a very narrow business market.

Similarly, Nokia took advantage of Motorola’s very narrow focus on its current economic/performance engine while it’s inability to make radical or disruptive change was ignored. Nokia moved out into a new S-curve, a new performance engine: a small and sleek highly comfortable device replacing a big and bulky monstrosity-to-use cell phone even though those same cell phones were becoming incrementally smaller.

When stakeholders’ deep-seated frustrations are ignored somebody will fill the gap with a frustration-reduction solution. When the SH requirement or need is critically important to what they commonly do, then the rate of acceptance of a frustration-reduction device will be exceedingly rapid and produce huge new markets. Detecting both critically important SH activity that is being met with a matching deep frustration is the basis for radical or disruptive innovation. When such detection techniques are repeatedly used then a world-class innovation company will come on the scene and become exceedingly difficult to displace or compete against – – they become a stakeholder’s dream company.

So who seeks to intimately know the critical frustrations of a company’s many stakeholders?

Charismatic Dominance

Destructive leaders are consummate spokespersons, obsessed with the company image. They regularly display their remarkable charisma before the media. Their public persona inspires confidence amongst all employees and stakeholders. The problem is amongst the addictive accolades, their management efforts become shallow and ineffective disguised by the appearance of accomplishing things. The line between talking good performance and demonstrating same becomes blurred. Devotion to public relations leaves little time to attend to the critical details of the business. Further, as the company’s image becomes their top priority these leaders encourage financial reporting practices that promote that image. Financial accounting becomes a control tool. The culture becomes one of the entire company supporting public relations.

All Ahead Full

Destructive leaders underestimate obstacles. Typically they become so enamored with their vision of what they want to achieve, they completely underestimate the difficulty of actually getting there. When the real obstacles surface, they recklessly plunge full steam ahead into the abyss. Awesome expansion is rammed forward amidst a sea of bright red ink. They fail to hold back or reevaluate their course of action often because of an enormous need to be right in every important decision they make. Admitting to fallibility is not an option but believing in their own magic is. Recognizing that escalating commitment is getting out of hand becomes impossible. Courage in the face of adversity can be most devastating, and in fact, foolhardy.

The key point to understand is that when it comes to innovation, it is more about the strategist than the strategy. Strategy fails, generally, in its execution. Contrary and hidden agendas top the main reasons strategy is not put into action. When there is organizational-wide alignment growth is inevitable. However, where consensus is lacking and conflicting beliefs prevail, strategy is almost useless. People will continue to work at cross purposes draining energy from the company’s vitality and purpose.

The strategist leads the dream. The strategist is the peacemaker and the balancer. The strategist is the evangelist. The strategist is the one who builds hope and offers a brighter future. The strategist is the one who builds harmony and embeds respect. The strategist is the one who gives a sense of identity and purpose. The strategist is the one who makes the dream come alive for everyone.

However, the power of repeatability and predictability also establishes great limitations for new organic growth. Innovation becomes the last thing a manager is trained to do. Their view of their marketplace becomes narrower, not wider. Metrics drive everything except the most important metrics for innovation; what innovation must measure is too often excluded. In fact, organizational design relentlessly keeps resources and investment trained on the current performance engine at the cost of any emerging S-Curve possibilities.

Still, staying the course must live side-by-side with reinventing at least part of the company. Front and center must be the understanding that while the current Performance Engine is the mainstay of the company, the inevitable reality is that its existence is only temporary. The company’s survival and prosperity is going to depend on the development of new performance engines and new S-Curves. Within the organizational culture it is critical that a mutual respect develops between those that drive the present and those that develop the future.

Building new engines, new S-Curves is critical to our growth, for without organic growth, we first atrophy and then later die. It’s all about direction. However, putting together a new performance engine is anything but easy. Chris Trimble says “Organizations are not designed for innovation. Quite the contrary, they are designed for ongoing operations”.

Lifecycles and S-Curves

An S-Curve can be thought of as a lifecycle of any particular product, service or business model. We can use an S-Curve to explain innovative business performance over time. Our businesses thrive by successfully delivering some form of innovation to customers or users. Our performance starts slowly as we launch a particular business (or new product/service line) on a somewhat tentative basis as we experiment to find the right business formula. We are in the red for a while but eventually we learn enough to make the formula work. As our grasp of our market increases, our business performance (now heralded – - not as a formula – - but as a business model) moves from red ink to solidly black. We breathe a sigh of relief as all our sweat and blood start to bear fruit.
Then as the attractiveness of our offering spreads our performance accelerates; often our growth looks like an exponential upward curve. Our numbers and graphs feel like “straight up forever” … and we gasp to keep up to a newfound pace. Exciting new plans (that later look ridiculous in hindsight) are made with wild goals. Our very success attracts envy and imitation. It’s not long before competition brings “me too” products to market; saturation with the accompanying erosion of margins and profits is the inevitable result. The best and brightest in our industry react with innovation and new technology. Our business model (and just about everyone else’s in our marketplace) hits obsolescence.

As growth moves from acceleration, to de-acceleration, to flat, to down what does not change is the cost of the infrastructure that was built to support that amazing growth. That overhead is rarely jettisoned easily in a decline and it may turn into a deadly millstone around our neck that kills our life’s work. Not all of us can do turnaround management.

Our Lifeblood: Performance Engines

The S-Curve by its directional shape takes us from down-sloping during the investment startup stage, to flat as we go from red to black, to rising as we make a fortune in the acceleration stage, to flat as we lose our differentiation and position, to down again as the world goes flying past us. That’s why it’s the job of the strategist to be continuously building new S-Curves or Performance Engines. That’s why we must both stay the course and reinvent ourselves.

It’s the job of every top officer to drive the current Performance Engine. The performance engine is the lifeblood of the company – – the way by which everything operates, breathes and grows in our world. High-Performance is often defined as “consistently and enduringly surpassing industry rivals in market and revenue growth, margins and profitability, total returns and cash in the bank”. When we are at our highest performance we often don’t even notice jealous competitors.

Where to Jump In

Adams tells us markets can be analyzed from the perspective of four significant types of buyers: early adopters, early majority, late majority, and laggards. In the early adopter stage of market development, costs are high, volumes are low and the manufacturing learning curve is huge; it is very hard to make money because of the high initial costs of (1) manufacturing the innovation, (2) marketing from scratch, and (3) selling it through new channels and people. The learning curve is filled with expenses from experimentation.

Fast-Followers often jump in when a product hits a 5% share of the market. At this point, end-user demand is just starting to move towards mainstream. A significant problem is being solved so the user is willing to pay a premium price. Investment costs for sales and marketing are typically lower than the early adopter stage, but still substantial. The early majority stage is the most lucrative because high-margin products step onto a rocket ship of demand. The profitability eventually attracts aggressive competitors usually from companies in adjacent markets. In these hot markets, a land grab for market share is the norm; the strategy is to grow share at all costs.

Where Not To

The late majority stage occurs because the market approaches saturation and user demand begins to slow. Competition forces prices to drop and market share increases seem to come, not from new customers, but from grabbing them from competitors. Brand recognition and differentiation with features is the motif for survival. Niche innovation and disruptive services become the only islands of profitability that have the potential to create entirely new markets.

In the laggard stage, the market is completely saturated. Oversupply is everywhere. Only the consolidators survive. The only effective strategy is to become a consolidator or to sell out to one. Customers are acquired, not created.
The lesson to be learned about this four-stage market lifecycle, in terms of innovation, is that it is much easier to sell a product or service to a new customer than to go after competitor’s customers. So we can see where the greatest return for the least investment can be found. Also notable is that the early adopter stage is too expensive for most companies in terms of time, money and risk. It is better for us to look for opportunities in the early majority stage where markets are expanding and where, in particular, certain sub-sectors are growing at an amazing clip. While at first glance this may seem obvious, the vast majority of businesses neither understand nor heed this lesson. And, therein is the difference between a low and a high probability of success with new products and service innovation.

Proven Winners Quickly

Being a fast follower means knowing how to imitate products and services already “out there” that are starting to win; in other words, they are proven or near proven. With that proof, our innovation risk falls even further.
Oded Shenkar in Copycats tells us the principles of imitation are not only consistent with innovation, their practice enables even more innovation. Further, copycatting means being able to move at an even faster pace than doing pure innovation. In a world where our markets change so fast, our survival may depend on learning how to imitate effectively.

The Art of Imitation

The first thing to know about the art of imitation is that it must speak to the pain and deep needs of our customers and marketplace. We uncovered such frustration in our jobs-to-be-done discovery analysis. Secondly, we must choose according to our strategic plan and vision. Reverse engineering an exact replica usually leads to failure because we are trying to duplicate another firm’s skill set and capabilities. Our imitation must be developed based on our own know-how and best practices. We need to stay within what we are very good at instead of twisting ourselves into a pretzel to be something we are not. Imitation is a complex, intelligent and creative pursuit.
Copycatting can vary from simple replication and extension of existing models to the intricacies of importing ideas and recombining them. Whether working with a simple form or a whole system, the goal of imitation means achieving differentiation. That differentiation reflects what is best about our company and our ability to deliver something quite special. Copycatting fails when the form of imitation is just too rudimentary, or oppositely, it tries to combine contradictory business models; knowledge applications from other companies may not fit our processes and methodologies. We have to take what is out there and make it fit to who and what we are, to what makes us different and unique. We have to develop our own imitation models.

The imitation process should be systematic. It will include searching, spotting, sorting and contextualizing. It will also mean deep diving, referencing within our marketplace knowledge, and critically being in a constant state of readiness. Then there is the need for unique application and implementation.

Further, copycatting capabilities must be developed in a way that emphasizes rapid deployment. The speed of imitation can be thought of as a choice between three broad categories: Pioneer Importer, Fast-Second-to-Market, and Come-from-behind-Strategist. Picking appropriately between these three will depend on how well we know ourselves.

First in Everything?

Renowned business scholar Theodore Levitt famously said “not a single company can afford even to try to be the first in everything in its field”. So in addition to emphasizing timing, choices must be made in harmony with our own peculiar strategic answers to the fundamental questions of where, what, who, and how. We have to decide where we match and where we will play.

Rob Adams says finding our target audience, and understanding them in fine detail, is perhaps the most important choice we make sure on our path to success. That means developing the differentiation, features, and details of our product offering before we have even start building a prototype. Success means knowing in advance how viable our new product will be in getting to the pain in our marketplace; it means knowing that people will eagerly pay up to satisfy their frustration, itch or desire. How well does our innovation choice morph into a tangible product that we can confidently launch?

Getting Launched Fast

Once we are past the stage-gating (the process of narrowing our choices while progressively increasing funding to investigate the best ideas), we have to focus in on the development and launch of our choice. This means committing to a full-fledged initial and ongoing budget for both (1) setting up production, and (2) marketing it. The sales and marketing budget needs to be at least as big, if not bigger, than the production budget. Underfunding marketing is perhaps the biggest cause for failure; it is certainly the most common mistake innovators make. Not only should the marketing budget be over half of the project cost, it must continue after launch in a robust ongoing way. What happens in production and marketing after launch, in terms of making adjustments to what is being learned, is critical to whether good products make it, or not. We do not want to stop a few feet short of pay dirt. The after launch budget is the difference maker. We have to continue to invest in our choice.

The product development team should not only be cross-disciplinary but should also be populated heavily with an equal proportion of people from both production R&D and marketing. Multiple perspectives are helpful; but production needs to understand the marketing work, and marketing the production work; there is a critically needed balance.

On this team the details need to be worked out. Written product specs and schedules need to be laid out in clear and precise documentation. There will be a master Marketing Requirements document, and a master Product Requirements document. All the learning, and the interpretation of the marketplace data, needs to be turned into a rank ordered “required features list”. This will be based on a certainty of what the “minimum features” are required to satisfy the market’s itch. A “nice to have” features list will also be added (which will add some slack and flexibility to the decision-making process later on). Then a production schedule is worked out.

From this point forward a trade-off decision-making process will become front and center until the first product launch is made. Getting the product into the marketplace very, very quickly is vital. Being slow can mean losing the market opportunity. The more product features selected, the more difficult, slower and complex it will be to produce the product choice with any degree of quality. Going with fewer features means going to more specific, niched targets. That means going after a small target first, and then continuously adding more and more targets as learning and success is achieved. Gaining bigger market share comes about by adding niche after niche. The trade-off decisions change as adaptation is made to the learning. The after launch budget becomes the lifeblood of ensuing market share growth.

Hot Markets

Being fast to market means getting a market-demanded product out quickly. Moving fast is all about developing minimally acceptable feature sets for our target audience. In other words, we go after sub targets to whom we can sell and market to very cost-effectively… and in so doing generate life-sustaining revenue quickly. More effort and capital will flow to the sub-market sectors with the highest return potential. Multiple trial iterations (testing and retesting in real time in real markets) – – launching over and over again – – leads us to the high market pain opportunities. Those opportunities do not seem to last for long; they can disappear in a flash. That is why reducing our feature set and pulling in our shipping dates becomes the heart and core of our launch process. That is why we make multiple launches. Our market validation is our growing degree of success.

Copycatting gets us to markets fast and while they are still hot. It is more cost-effective than innovating from scratch. (There are times, though, that a market is so robust and virgin, with the opportunity so high, that waiting to be an imitator is silly.) However, most companies when they start to imitate are sloppy, undisciplined and overconfident. The good news is that we can learn to become highly skilled and disciplined in the art of imitation. After regularly and systematically uncovering the crying needs of our marketplace, we can set up our own fast to market machinery. Done right, we will cash flow early and abundantly, and then we can use that cash to grow market share.

Simple? Yes. Easy? No. Achievable with discipline? Yes. Fun? The most we will ever have!

How can we get started?

Just start noting what is new in your marketplace. Write it down in a journal. When you see customers excited ask them why. Ask them what is changing. Asking what would make them even more happy. Then put together a team of your best people, a team that represents a cross-section of your company. Ask them if they will commit to doing something new, unusual and exciting. Ask them to imitate your example of noticing and journaling. It will not be long before you have a copycat team eager to get into action.

According to Rob Adams, author of If You Build It, Will They Come, more than 65% of new products introduced by established companies, with already entrenched products, will fail; for start-up companies the failure rate is over 90%.

The probabilities for success, with a new innovation, increase dramatically when a Jobs-to-Be-Done analysis is done. Ulwick & Bettencourt claim an 80% innovation success rate when that analysis uncovers what customers really want (see Step 4: Generate Game Changing Ideas). That analysis focuses on individual customer needs. We can drive that 80% success rate even higher by looking at market analysis and segment examination.

Where to Jump In

Adams tells us markets can be analyzed from the perspective of four significant types of buyers: early adopters, early majority, late majority, and laggards. In the early adopter stage of market development, costs are high, volumes are low and the manufacturing learning curve is huge; it is very hard to make money because of the high initial costs of (1) manufacturing the innovation, (2) marketing from scratch, and (3) selling it through new channels and people. The learning curve is filled with expenses from experimentation.

Fast-Followers often jump in when a product hits a 5% share of the market. At this point, end-user demand is just starting to move towards mainstream. A significant problem is being solved so the user is willing to pay a premium price. Investment costs for sales and marketing are typically lower than the early adopter stage, but still substantial. The early majority stage is the most lucrative because high-margin products step onto a rocket ship of demand. The profitability eventually attracts aggressive competitors usually from companies in adjacent markets. In these hot markets, a land grab for market share is the norm; the strategy is to grow share at all costs.

Where Not To

The late majority stage occurs because the market approaches saturation and user demand begins to slow. Competition forces prices to drop and market share increases seem to come, not from new customers, but from grabbing them from competitors. Brand recognition and differentiation with features is the motif for survival. Niche innovation and disruptive services become the only islands of profitability that have the potential to create entirely new markets.

In the laggard stage, the market is completely saturated. Oversupply is everywhere. Only the consolidators survive. The only effective strategy is to become a consolidator or to sell out to one. Customers are acquired, not created.

The lesson to be learned about this four-stage market lifecycle, in terms of innovation, is that it is much easier to sell a product or service to a new customer than to go after competitor’s customers. So we can see where the greatest return for the least investment can be found. Also notable is that the early adopter stage is too expensive for most companies in terms of time, money and risk. It is better for us to look for opportunities in the early majority stage where markets are expanding and where, in particular, certain sub-sectors are growing at an amazing clip. While at first glance this may seem obvious, the vast majority of businesses neither understand nor heed this lesson. And, therein is the difference between a low and a high probability of success with new products and service innovation.

Proven Winners Quickly

Being a fast follower means knowing how to imitate products and services already “out there” that are starting to win; in other words, they are proven or near proven. With that proof, our innovation risk falls even further.

Oded Shenkar in Copycats tells us the principles of imitation are not only consistent with innovation, their practice enables even more innovation. Further, copycatting means being able to move at an even faster pace than doing pure innovation. In a world where our markets change so fast, our survival may depend on learning how to imitate effectively.

Part 2 next month