PROBLEMS CREATE OPPORTUNITIES: INNOVATION X

By Marc Kramer

 

Innovation is the key to developing new revenue streams, staying competitive and creating jobs.  Adam Richardson, creative director at global innovation firm frog design, inc., where he has worked with companies such as HP, Intel, Motorola, Logitech, and Yahoo!, has come out with a new book entitled “Innovation X” published by  Jossey Boss.

 

Richardson writes regularly on design and business, and speaks at conferences worldwide. In addition to teaching design and user research, he is a guest lecturer at the Ecole Nationale Supérieure de Création Industrielle in Paris, and at the IESE University of Navarra in Barcelona. Richardson earned his BFA in Industrial Design from the California College of the Arts, and a multi-disciplinary MA from the University of Chicago.

 

 

Why did you write this book?

 

Richardson:  “I began to see a pattern with companies who sat down at the conference table at frog design. They knew they had a problem, but they couldn’t figure out what it was. But there were some common symptoms that came up over and over, regardless of the company size or their industry: they’d lost touch with who their customers were, they were getting disrupted by unexpected competitors, and they were needing to create ecosystems of offerings for customers rather than stand-alone products.

 

‘So I wanted to see how these ambiguous, vague problems, which I started calling X-problems, could be better understood and tackled.’

 

Who should be reading it?

 

Richardson:  “Senior executives, division leaders, and product managers – people who are struggling with these tough X-problems and must answer the fundamental question, “What should we make?”.

 

“It is a business book about innovation, not a design book. It’s a from-the-trenches, hands-on book with concrete tools and methods for dealing with X-problems and making innovation work.”

What companies are good at innovating and why?

 

Richardson:  “Beyond the usual suspects of Apple and Google, many companies are succeeding at innovation and tackling X-problems. I profile a variety of them in the book: Autodesk (architecture and design software), Clif Bar (energy snacks for athletes), Progressive Insurance, MINI, Logitech, Twitter, and others. Some of these are startups, some are large companies, so innovation is not exclusive to either. However, breakthrough innovations tend to come more consistently from small companies taking bet-the-farm risks.

 

“These companies share a few attributes. Leadership at the top that sets the expectations around innovation and the “panic threshold” for how long radical ideas are entertained before being dropped. A combination of restless experimentation and relentless attention to detail on execution. A focus on deep customer needs, and innovating on behalf of customers rather than just doing what customers ask.’

 

Can you tell walking into a company that their culture is either receptive or not receptive to innovation?

Richardson:  “I often feel like a corporate tourist – I land in a new client culture and new landscape, and all I can see is the people, behaviors and beliefs that are right in front of me. It’s not always clear from this first exposure how the larger culture is set up for innovation.

 

“But it quickly becomes clear if the people have passion and drive, and if there is the support from top-level management. All of these have to be present, or innovation is not going to take root broadly.”

 

There are less than a handful of companies that were on the Fortune 500 a half-century ago that are still on the list.  How important is innovation to maintaining success?

 

Richardson:  “That is a great question. It is true that innovation can seem to be a flash-in-the-pan phenomenon. Too often innovation is treated as an end in itself, rather than a means to an end. Not that many companies last fifty years, whether they are considered innovative or not, but fundamentally for a company to continue to thrive it needs to differentiate itself by providing unique value (which can be defined in many ways) for customers. If done well, this is what innovation can help deliver. And today’s competitive environment is far more turbulent and fast-paced than fifty years ago, making innovation even more important.”

 

What is the profile of the leaders that embrace innovation?

Richardson:  “They must be curious. For example Jeff Bezos of Amazon spent a week on the floor of one of his warehouses, seeing what he could learn about the “boring” part of the business. I firmly believe that joie de vivre and lifelong inquisitiveness are essential to innovation, which at its core is about optimistically trying out things that have never been done before.

 

“They must have a passion for the details of the end product. Too often business strategy is divorced from product development, as though one doesn’t affect the other. They exist symbiotically.

 

“Innovation leaders must be patient and persistent. Google’s 1200 quarter (300 year) vision of making all the world’s information available is an exaggerated case in point, but let’s at least get a perspective further out than 1-2 quarters. Big innovations take time.

 

“And leaders must be willing to take risks based on informed instinct, even if it goes against what market research is saying. For example, Gary Erickson, founder of energy snack maker Clif Bar, took a “damn-the-torpedoes” approach to launch a radical new product for runners, after a long period of investigation that yielded ambiguous results. Fortunately his instincts were right, and the product rapidly outsold its predecessor.”

 

What is the profile of the type of employees innovative companies should be looking for?

 

Richardson:  “Pretty much the same qualities as I just described for leaders, actually, with the added ingredient that they must play well with others from different disciplines and organizational groups. And there’s no escaping the fact that when you’re dealing with tough problems, talent matters.

 

“Ed Catmull of Pixar says, “If you want to be original, you have to accept risk and have the capability to recover when it fails. What’s the key to being able to recover? Talented people!” At frog we are very picky about who we hire – we hire less than 1% of the people that apply for a position.”

 

In the book you mention about capitalizing on your own and your client’s problems, how do you identify problems and find out if clients are really willing to pay for a solution?

Richardson:  “I like the quote from David St. Hubbins, lead singer of the fake rock group Spinal Tap, “It’s such a fine line between stupid and clever.” It can be hard to sort out the good solutions from the bad ones. You cannot rely purely on market data when assessing an innovation – that data is about the past. Motorola’s market research said that the Razr would be a low-volume, money-losing phone. It went on to become one of the biggest selling phones of all time.

 

“So you have to triangulate on new opportunity spaces and innovations from many different angles, what I call multi-vector analysis – customers, technologies, trends, competitors, sales channels, brand, and other vectors. From this you build a holistic business case about the value of the solution and what it will take to build it.

 

Is there one process and methodology that you follow for identifying problems and then creating a revenue producing solution?

 

Richardson:  “In part this book is an attempt to demystify  many of the processes and frameworks that my colleagues and I use at frog use on a daily basis. But you cannot take a cookie-cutter approach. At frog we have a broad set of tools and a loosely defined process for putting them together. We are pragmatic rather than dogmatic about choosing which tools to use, and when to use them.

 

“But the common denominator is that we combine qualitative and quantitative approaches – ethnography with market research for example – and creative and analytical methods. It’s the combination of these that produces the magic, which can then be backed up with rigorous logic and data.

 

Is there one company that truly understands innovation that you consider the model for other companies?

 

Richardson:  “There is no one-size fits-all model, though many look to Apple these days. Apple is an odd-ball in many respects, and it’s hard to replicate. But there are lots of other archetypes. One of my favorites is Zappos, the online shoe retailer, who took a fresh look at their organizational toolbox. In it they realized that they had two core assets - their reputation for great customer service and their quirky, fun organizational culture–which they could actually sell. They set up a little experiment, called Zappos Insights, which is a consulting service for small business owners who want to get better at customer service and improving their company cultures. This is a great example of a company being innovative by rethinking what it does without throwing out its old business, and taking risks in a sensible but effective way.”