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InnovationLabs and our partner firm FutureLab have two new books available for you, and we hope that you find them useful and interesting.

The first, The Innovation Formula, is available as a free download from our web site  (you may also see the link on the upper right side of this page); the second, Soulful Branding, is available at Amazon.

In this post we offer short excerpts from both books.

The Innovation Formula

In this new book, Langdon Morris adapts the principles and concepts that InnovationLabs has applied so successfully with large firms worldwide to the questions and concerns of small and medium sized businesses.  While larger firms usually have dedicated innovation and R&D departments, smaller companies must make do with a great deal more improvisation and quick thinking.  So while the necessity of innovation is as urgent for the small as for the large, and many of the same concepts are applicable, the context and implementation of innovation initiatives are quite different for the smaller firms.

Here is an excerpt (starting from page 17):

Yes, we do believe that there is a formula for success at innovation, and we have found over the years that it doesn’t matter whether you’re running a garage, a sandwich shop, or a multinational auto manufacturer, success in each case relies on your performance in the same five areas. Whether you’re the CEO of GM or the chief cook and bottle washer, you have think about the same problems, study, learn, research, experiment, engage in some risk, and manage it closely. How you do these, of course, is entirely different depending on the size of your business, but nevertheless the actual elements seem to be consistent across all businesses.

The formula consists of the six major topics: complexity and change, risk, speed, engagement, leadership, and tools. Here is a quick summary of the key ideas and the reasoning that you’ll find throughout the rest of the book:

Complexity and Change
The external environment is an unyielding and unceasing source of change, and your organization must adapt to it if it’s going to survive. Hence, complexity and change literally define the context in which innovation and its close cousin, strategy, are relevant. It is to external change that drives market needs and preferences, and hence it is a critical role of leadership to be attuned to the rhythm, character, and specifics of what is happening out there in the increasingly wild world. The other critical role is of course leading the process of responding to those changes.

Risk
When we understand what’s happening in the external environment we can organize the pursuit of innovation, correctly targeted, so that we produce the right innovations to meet current and future market needs. But if only it were so easy. In fact, it is intellectually and operationally challenging to figure out what’s the right thing to do, the right products and services to create.

Furthermore, having a clear vision of the future products and services is not at all the same as actually having them in hand.

Hence, there is a double risk. First, anticipating future needs correctly is by no means an easy task. What if, for example, you see clearly what the needs of the future will be, but in the end it turns out that you’re wrong? This, of course, is the story of countless failed companies, which aimed for a target in the future market that the actual market itself never selected?

Second, even if you do get it right, there’s still the many problems associated with developing the right products and services to meet the anticipated needs. Can your designs and plans actually work? Can you complete the development work in a timely way? Does your organization have the internal talent and the right external partners to master the many challenges?

Risk, then, is inherent in the innovation problem, and it is inescapable. So the right amount of risk is essentially the least possible risk.

“Least possible,” however, is trickier than it may at first sound. Least, after all, is really none, but of course the point of competition and change and all that is that taking no risk means making no innovations at all, which is actually a very risky approach, because it leaves you entirely vulnerable to those very changes. Consequently, “least possible” really means the least you can take on while still remaining viable, but even knowing exactly how much risk that is, is actually unknowable.

And so the problem now becomes one of information, because you probably don’t know what innovations your competitors are working on, nor everything about the new and innovative technologies that may be coming, etc., etc., which means that while you cannot afford to do nothing, to just wait for the future to bury your business, you are obliged to act, compelled to act, to act proactively yet with incomplete information.
This is the character of the risks you must take. Taking them well, thoughtfully, strategically is what’s necessary. Achieving this, navigating through this difficult but fascinating landscape will take some thought and a lot of effort.

Speed
So despite the many risks you plunge ahead, thoughtfully, to create your organization’s future. You are now engaged in the depths of the innovation process itself.

That process is not such an easy one, as it must be thorough and thoughtful, of course, but above all it must be fast. Again, the premise here is that your information is incomplete, and you just don’t know how fast your competitors will move, nor do you know exactly how the market will respond to their new ideas, nor to yours. So the best way to deal with the compounding of uncertainty is to go fast, to learn fast, to learn what works and what doesn’t work through techniques such as agile sprints, rapid prototyping, minimum viable products, a-b testing, and related techniques (which we will discuss in chapter 5). We express this in the innovation formula as speed, and of course there is a lot of value in getting solid results fast, faster than your competitors.

Engagement
The next element of the formula relates to the culture of your organization, for you and your partner are the ones who are going to develop ideas, figure out which ones are great, and turn them into something useful, test them, and bring the very best to the market.
Theoretically, you could find the smartest person in your organization, set them to the innovation task, and achieve good or even great results. Practically, though, the issues that have to be dealt with are probably deeper and broader than a single individual can master, because today’s innovation projects integrate knowledge across multiple domains, each of which itself runs quite deep.

Hence, we know that innovation is not an individual activity, but a team sport. The optimal innovation process is one in which your organization is engaged, one in which all of the strengths, thoughts, and talents of everyone, and also those of the broader ecosystem in which your organization participates, are fully engaged.

Leadership
It’s also true of organizations that deep and thorough engagement comes about only when there is superbly focused leadership. We know that innovation can happen in organizations where the risks are understood, and where the ambiguities and uncertainties that are inherent in the process are known and acknowledged, and where there is willingness to engage in the necessary levels of risk taking.

We also know that in organizations where people are punished for making intelligent mistakes, for thoughtfully trying new things that fail, for thinking about how to do things better, and differently, the spirit of innovation is swiftly and decisively stifled.
Hence, leaders must embrace and promote the critical elements which enable an innovation culture to emerge, or it will not emerge.

Tools
The last clause of the formula concerns the tools and methods that we use to manage the entire innovation effort. All other things being equal, better tools and methods are likely to support better results, and while this does not necessarily mean that you have to invest a lot of money in new technology, you do need to think through carefully and invest appropriately in methods, processes, and organizational structures that enable and promote innovation efforts, and which set the tone and context in which innovation can thrive.

So these are the six elements in the innovation formula; here they are expressed in pseudo math:

(Complexity and Change) > Innovation
Innovation = f (Risk) (Speed) (Engagement) (Leadership) + (Tools)

Or in English, Complexity and change means that Innovation is essential for survival.
Achieving innovation a function of Risk, times Speed, times Engagement, times Leadership, plus Tools.

As you might expect, the remaining chapters of the book explore each of these topics in turn.

Soulful Branding

Based primarily on the amazing experiences of lead author Jerome Conlon, Soulful Branding is a detailed examination of the qualities and characteristics of the world’s most compelling brands. Jerome played key leadership roles in the development of two of the world’s most iconic brands, Nike and Starbucks, and throughout the book he tells fascinating stories of the journeys these companies have taken to the positions as global brand leaders, and he details the broader insights that his experiences with these two companies have inspired.

Here’s an excerpt from the first chapter:

Everyone is experiencing the transition to a new, technology driven society, one that places ever-greater reliance on our connected and collective consciousness. As information and intelligence becomes more fully the domain of smartphones and machine learning, people in business are coming to realize that they must also place more value on the human qualities that cannot be automated, especially if they want to differentiate their brands.

The unique qualities of our inner lives still hold the essential keys to a better way of living, qualities such as connection, magnetic attraction, love, imagination, and inspired ideal forms and expressions, for these produce the greatest meaning and feeling. This inner human language is common to us all, and the leaders of successful brands are discovering that their importance only increases in this new, digitized world, for these are really the experiences that have the most influence on how we choose to live, how we engage with others, what we choose to do and not do, and also what we buy.

Because products and services are largely defined as “brands,” it emerges that branding becomes central to the new world, and to its economy. Success in business absolutely requires a profound, focused, and skillful effort at brand creation, brand development and brand management.

In fact, a strong brand is vital to the success of every business. On average, 58% of the value of a Fortune 500 company is held in its intangibles, including intellectual property, goodwill, and of course the focus of our interest here, the strength and meaning of the brand.

The very best brands, those that are created, developed and managed with the most skill, are precisely the ones that evoke the most positive inner responses. The roles and magic moments that great brands can play in human life carry us beyond a simple physical identity and into the deeper world of brand character, persona, and meaning.

These great brands thrive on the basis of the stories and myths they express, and upon the feelings, connections, and emotions that they inspire. They carry shared and iconic meanings that carry identity value.

Hence, the linkage between human emotions, brands, and our inner selves is indelible, and it is the subject of this book. We are deeply interested in the power that you can deploy when you design brands that continually explore, embed, and describe new patterns of connection and meaning in higher-level harmonies with the thoughts, needs, beliefs, and aspirations of your customers.

By working intimately with great brands for more than three decades, we have learned that soulful qualities in leadership, branding and marketing can dramatically improve the strength and power of any brand, which of course brings with it a host of additional benefits including market share and sales growth, premium pricing and margins, customer and employee loyalty, and brand extensions. It also makes brands more resilient in times of adversity.

These highly desirable but largely intangible factors are the soul qualities of focus here, and our goal is to show you how to embody them in your brand to achieve something much higher, more enduring, and of far greater value, thereby forging stronger inter-personal relationships between your brand and the customers you are serving.

This is what we mean by “soulful branding.”

We hope you enjoy these books, and as always we welcome your feedback

Photo: Taichung, Taiwan

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Here’s an innovation story that follows a very familiar plot line, but the plot is so important that it provides an important reminder.

In an interview with a company’s new CEO, a reporter tells us, the company has … “combined breathtaking engineering to create a whole bunch of amazing prototypes.  But they rarely make it to market.  That’s because, over the last two decades, its culture has grown so competitive and insular, more consumed with getting and protecting an edge than pushing into riskier new businesses.”

Does this sound familiar?  It’s the story of almost every successful business, where the balance between protecting the established core markets, and pioneering new ones, becomes a high stakes poker game played inside the company, with various camps competing for innovation, development, and marketing resources, and the established units almost always win.

The article goes on to say … “People were motivated to produce things they knew their managers would like, rather than take risks on new ideas that might fail.  The company’s money-minting core offerings sucked up talent and attention while newer ideas got overlooked.”

But what we all know is that the established units win for a while, until major shifts in the market leave them flat-footed.  In fact, this situation is so common, the reporter goes on to note that “It has become accepted wisdom in Silicon Valley that large, successful tech companies can’t reinvent themselves.  Many have attempted to engineer comebacks, and the industry is teeming with failed empires that have evolved into middling businesses on the decline.”

Is this a story about HP?  Or Blackberry?  Or Yahoo?  It could be any of those.

Actually, though, this article is about Microsoft.  It’s a great piece in the latest Wired, a profile on the new CEO Satya Nadella.  The article is quite sympathetic to Nadella’s task, and frames him as a smart and sensitive executive who could well succeed in the monumental task that he is confronted with.

Nadella himself describes three layers of critical organizational performance, Concepts, Capabilities, and Culture, and notes that while Microsoft is awash in great concepts, “You need a culture that is fundamentally not opposed to new concepts and new capabilities.”

While “Not fundamentally opposed” puts the bar pretty low, he has a good point, and it certainly frames the work that he wil need to be doing in the coming weeks and months.

The next article that I’d like to read is about the how.  That is, How does Nardella expect to achieve this in the Redmond behemoth?  The Wired article unfortunately doesn’t say much about that.  But we do.  This is squarely in the InnovationLabs competence area, and we’ve written about it extensively, including in the two books mentioned to the right, Agile Innovation and The Innovation Master Plan.

Among the case studies we cover in Agile are Wells Fargo, Nike, and NASA’s Apollo Program, each tackling a different variation on the same situation, and each providing new insights.

At Wells Fargo, it’s about how to take risks in a highly regulated and controlled banking environment that is nevertheless subject to monumental forces of change; Steve Ellis gives us the metaphor of snowboarding to explain how he makes the organziation move faster.

At Nike, it’s about pushing a massive volume of new products out into the market, and then listening carefully to find out where there is resonance, and shifting even the brand identity when the company and the market become out of sync.

And for Apollo, it’s about how thousands of engineers and scientists created something of monumental scale, something that had absolutely never been done before – the moon landings – while balancing innovativeness and control.

Nadella is facing a task that has elements of all of these stories, and we will be fascinated to witness the new chapters as time, history, and the market write them.

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PHOTO:  Buzz Aldrin on the moon.  Photo by Neil Armstrong.  Courtesy of NASA.

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