We do our very best to communicate in a clear, easy to understand manner – - the simpler the better. We don’t keep people in the dark; neither do we hide behind silence (“I am important and hard to reach”) or email or some other automated avoidance behaviour. We try to give context and reasons why we say what we say. We have a limited amount of time but we do make great effort to be on the phone with everyone who wants to talk to us – - even if we do have to be brief. In that way we focus on what’s important and what is a waste of time so we can all channel our energy to the right places.

Simplicity is sometimes found in complexity. Put things as simply as possible but no simpler we are told. Looking for simple cause and effect in human beings and their organizations just doesn’t work and we often don’t know why. To effect change there are often a number of factors at play and they all have to be dealt with at once. The dynamics of a situation like vector forces are interactive and mutually self-reinforcing (positively or destructively). Sorting out what influences what is often an exercise in futility but knowing what factors are in play is important. To effect human change all of the key factors have to be dealt at once, not sequentially or one at a time. Taking partial or incremental steps is often insufficient and therefore only leads to discouragement.

The simplicity in complexity comes from the actions we take. We need to be very explicit in the action steps that are necessary to solve a problem or challenge. Everybody needs to be extremely clear on the overall plan, what their role is in the plan and why. The vision and the solution steps need to be over communicated until clarity is reached. Clarity starts with “why” and finishes with what “obviously” needs to be done. It needs to be said over and over and over again until everyone understands. Leadership is about straightforward purpose and finding everyone “a place in the choir”.

Simplicity takes a great deal of effort but there is little that is more worthwhile.

In the first step we evaluate the worthiness of our opportunities. How great will our gain be as we choose one project or another? Collaborating for the sake of collaboration is a rabbit chase defocusing and frustrating everybody. We need to pick areas that will solve our customers’ (external and internal) deepest frustrations. Value needs to be created both qualitatively (improve functionality or usability) and quantitatively (increase cash flow).

Secondly we need to spot barriers to our collaboration. People don’t collaborate well for a number of reasons; there may be a lack of motivation or willingness and a large number of people simply lack the innate ability to collaborate easily. Four of the most common barriers are (1) an unwillingness to reach out to other people, often from a cultural not-invented-here syndrome; (2) staff are unwilling to provide help – they hoard their resources; (3) workers are not able to find what they are looking for, they don’t know how to search; (4) people are not able to work with others they don’t know well either because of social skills or attitudes. Rather than jumping too quickly into an assumption about what is interfering with collaboration, the barriers simply need to be identified and listed.

Then in the third step we tailor our solutions to turn down those barriers. Different barriers require different solutions. Often the solution is found in lifting workers into a state of unity by articulating the dream or vision, setting out common goals and preaching the strong value of cross organizational teamwork. That means moving our staff from their narrow interests towards our common mission. In most cases the high achievers have to be moved towards shared achievement, while the social butterflies have to be moved towards achieving measurable results. If employees cannot or will not learn to both make cross organizational contributions as well as focus on their own individual performance, then they probably need to be replaced. There are some who are naturally both collaborators and individual achievers but most require at least some skill acquisition. They might need to learn how to build nimble interpersonal networks across the company while others need to learn what the thrill of achievement is all about.

Good collaboration emphasizes both performance from decentralized work and performance from collaborative work. Everyone can grow to be more collaborative leaders from the example they set and the attitudes they transmit. Just a little guidance is needed in most cases. We need to cultivate collaboration around us by transforming ourselves, our organization and the people working with us. Collaboration or mutuality leads to everybody’s better performance. Our job is to unite together towards our common mission. We need to think about what Peter Drucker said:

“Management is about human beings. Its task is to make people capable of joint performance, to make their strengths effective and their weaknesses irrelevant. …. Every enterprise requires commitment to common goals and shared values. Without such commitment there is no enterprise; there is only a mob. The enterprise must have simple, clear, and unifying objectives. The mission of the organization has to be clear enough and big enough to provide common vision. The goals that embody it have to be clear, public, and constantly reaffirmed. Management’s first job is to think through, set, and exemplify those objectives, values, and goals.”

One subset of collaboration is Great Collaboration, or as Warren Bennis calls it, Great Groups. Recruiting the right genius for the job is the first step in building great collaboration. Great groups are put together by leaders who are unafraid of hiring people better than themselves. In such recruiting they look for two things in particular: (1) industry excellence and (2) the ability to work with others.

A connoisseur of talent looks both for intellectual gifts and the ability to work collaboratively that it is people who “play well in the sandbox with others”. Such recruits may not be of high stature but they consider themselves to be some kind of “an enviable elite” however overworked and underpaid these greatly gifted people might happen to be. There are definitely the best person for the job at hand. Further they are usually young in their 20s or early 30s. Their enthusiasm, optimism and ignorance (or lack of experience) means they do what everyone thought couldn’t be done. Such unseasoned recruits “do not usually know what’s supposed to be impossible”.

Virtually every great group also has a strong visionary head along with a champion or two who can clear the obstacles of stifling bureaucracy and corporate politics. The “dream” is the engine that drives the group. The visionary details the task and its meaning; the champions keeps the recruits free to do their best most imaginative work. The focus is not on money or other tangible rewards but rather “the project is all” that matters. They fall in love with it. The thrilling process of discovery to bring new insights is everything. For the participants that process is its own ultimate reward. They live for the excitement of pushing back the boundaries, of doing something superbly well that no one has ever done before. Such genius is rare and the chance to exercise it in a dance with others is rarer still. These collaborating knowledge workers cannot be managed but can only be facilitated, guided and inspired. The leader finds greatness in the group and in turn helps members find it in themselves. Together they are able to achieve something that no one could achieve alone. “None of us is as smart as all of us.” These great groups reshape our world in very different and enduring ways.

Genius-to-folly syndrome is incredibly difficult to avoid. Although there is no universal set of early warning signs foreshadowing recklessness, here are six symptoms:

(1) Much of our time is spent plugging holes and papering over cracks even as we work to put the best spin we can on nagging substantial problems;

(2) Our disposition changes and we begin to punish the bearers of bad news;

(3) Our loyal aides and advisers (our subordinates, our friends, and colleagues) feel unable to bounce ideas off us, or more importantly, cannot collaborate with us on much-needed reality checks – - we have become the emperor with no clothes;

(4) Our self-importance brings on illusions of grandeur and infallibility – - we are defensive and so is everyone around us;

(5) We begin to feel entitled, to what we have and what we have achieved, as we seek yet more power and status – - we dismiss any notions of our own greediness;

(6) When we feel secure and in full control of our own destiny, we stubbornly refuse to take a timeout to take a look around and inventory our actual position.

What is most difficult to cope with is success. Risk-taking leaders in particular often begin to consider themselves to be exempt from the rules that govern other people’s behavior. Leaders who have demonstrated intelligence, resourcefulness, and the drive to succeed often become susceptible to uncharacteristic lapses in professional judgment and/or personal conduct. Further, success with risk-taking and rule-breaking frequently leads to a propensity to cast off self-restraint, prudence, and a sense of proportion. Often successful leaders become confused with the difference between nerve and talent.

Hmmmh….

We wish it would… and we live our lives like it will. We project an improved status quo on to the future. The truth is we just don’t see the forces that are shaping our soon to be new reality.

We need to detect what’s going on in the periphery of our world – what’s happening at the edges. It is at the outskirts of our day to day routine that we might notice change. We need to do more than notice though. We need to analyze whether those emerging forces are going to impact us now or later. Mega-forces and trend changes look insignificant and innocent as they start to surface. But their dynamics can turn our world upside down if we act like an ostrich and keep acting like tomorrow will look just like today.

We need to dig into the new social and economic trends and the psychological yearnings of those around us. Then we have a chance of anticipating and adapting. Extrapolating from the past is an exercise in self deception. Explore what’s new and why. Otherwise a tidal wave of surprise will be upon us.

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.

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