Sources of Insight » Innovation

3 Key Questions to Challenge Yourself to Innovate

JD — Mon, 23 Apr 2012 14:48:41 +0000

“You are growing or shrinking, you’re either climbing or sliding … there is no in-between.” – Tony Robbins

Are you expanding your capabilities and growing where it counts? You can use innovation to survive and thrive in an ever-changing world.

Innovation simply means coming up with a new idea, method, or product. The trick is to focus your ingenuity in ways that translate into meaningful results for work and life. The key to innovation is to ask the right questions. Just asking the right questions, starts the process.

In the book, The Future Belongs to Those Who are Fast, Jim Carroll shares three questions you can use to innovate and drive change.

3 Questions to Drive Innovation

Jim shares the following three questions to help drive innovation:

What can we do to run the business better?
What can we do to grow the business?
What can we do to transform the business?

The beauty of the question is you can apply them to any industry and you can apply them to work or life. For example, what can you do to run your life better, grow your life, and transform your life?

Example of Applying the Questions

The questions are open-ended and easy to apply. To make it real and to see it in action, Jim shares an example of applying the questions to cattle ranchers. Jim writes:

“When it comes to running the business better, there is a massive opportunity for the continued deployment of technology to better manage the herd; deal with food safety and traceability issues; manage the health of the herd; the list is endless! Growth of the business? Consider the opportunities that come about with direct-to-to-consumer relationships as our world of connectivity continues to expand. Transform the business? Change the business model! One Australian group was faced with the challenge of getting fresh meat to Indonesia – and so they built the MC Becrux – basically a floating stockyard for thousands of head of cattle!”

The power of possibility is driven by our ability to ask better questions and challenge our assumptions.. What does the future hold for you and how can you work with it, not against it?

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Seth Godin Quotes

JD — Sun, 04 Dec 2011 17:19:19 +0000

This is my collection of Seth Godin quotes. They’ll make you think and ponder as you wonder around from one idea to the next.

Seth’s sweet spot is marketing but his quotes easily span business, change, greatness, innovation, leadership, mediocrity, and strategy. Seth’s quotes teach us that the individual is a powerful force, that multiplies when we dare to be different, take action, test our ideas, stay true to our authentic self, tell inspiring stories, make things meaningful, and lead tribes of like minds and shared values.

Perhaps the most important lesson we learn from Seth Godin is this: Think and do great things. And do the tough stuff, because it’s worth it.

Enjoy.

Top 10 Seth Godin Quotes

Here are my top 10 favorite quotes by Seth Godin:

“Are you a serial idea-starting person? The goal is to be an idea-shipping person.”
“Change is not a threat, it’s an opportunity. Survival is not the goal, transformative success is.”
“Don’t try to please everyone. There are countless people who don’t want one, haven’t heard of one or actively hate it. So what?”
“Expectations are the engines of our perceptions.”
“Go ahead, do something impossible. “
“Ideas in secret die. They need light and air or they starve to death.”
“If you could do tomorrow over again, would you?”
“Instead of wondering when your next vacation is, you ought to set up a life you don’t need to escape from.”
“Why waste a sentence saying nothing? “
“You can’t shrink your way to greatness! “

Business

“As an organization grows and succeeds, it sows the seeds of its own demise by getting boring.”
“Choose your customers, choose your future.”
“Choose your customers. Fire the ones that hurt your ability to deliver the right story to the others.”
“Developing expertise or assets that are not easily copied is essential; otherwise you’re just a middleman. “
“Don’t try to be the ‘next’. Instead, try to be the other, the changer, the new. “
“Everyone is not your customer. “
“Fire the committee. No great website in history has been conceived of by more than three people. Not one. This is a deal breaker.”
“Give up control and give it away … The more you give your idea away, the more your company is going to be worth. “
“If your organization requires success before commitment, it will never have either. “
“In a world of free, everyone can play.”
“It’s better to make a decision, even the wrong one, than to be in limbo.”
“Lack of resources (payroll), time and competing priorities are why so many nonprofits haven’t done well. It’s that simple.”
“Make a decision. It doesn’t have to be a wise decision or a perfect one. Just make one.”
“Once you have permission to talk to someone, finding new products or services for them is a smart way to grow.”
“One way to think about running a successful business is to figure out what the least you can do is, and do that. “
“Playing safe is very risky. “
“The application process changes the list of who applies. Your applicants reflect your methods.”
“The best time to do great customer service is when a customer is upset.”
“The market and the consumer and idea trump the system.”
“Your best customers are worth far more than your average customers.”

Change

“Change almost never fails because it’s too early. It almost always fails because it’s too late.”
“Change is not a threat, it’s an opportunity. Survival is not the goal, transformative success is.”
“If you want to dig a big hole, you need to stay in one place.”
“Knowing what to do is very, very different than actually doing it.”
“Little changes cost you. Big changes benefit you by changing the game, but only if you go first.”
“No, everything is not going to be okay. It never is. It isn’t okay now. Change, by definition, changes things”
“Sometimes we spend more time than we should defending the old thing, instead of working to take advantage of the new thing.”

Choice

“If religion comprises rules you follow, faith is demonstrated by the actions you take.”
“If there’s time for an emergency, why isn’t there time for brilliance, generosity or learning? “
“If you could do tomorrow over again, would you? “
“If you’re not proud of where you work, go work somewhere else. “
“Just saying yes because you can’t bear the short-term pain of saying no is not going to help you do the work.”
“Saying no to loud people gives you the resources to say yes to important opportunities. “
“We notice what we choose to notice.”
“Who gets to decide what you want?”

Greatness

“Art is what we’re doing when we do our best work.”
“Be personal. Be relevant. Be specific.”
“Becoming a superstar takes about 10,000 hours of hard work.”
“Doing justice to the work is your task, not setting a world record. “
“Go ahead, do something impossible.”
“If there isn’t a good reason, go home. If there is, then do something … loud, now, and memorable.”
“Positive thinking is hard. Worth it, though.”
“Tribes makes our lives better, and leading a tribe is the best life of all. “
“When kids grow up wanting to be you, you matter.”
“When the legacy you leave behind lasts for hours, days or a lifetime, you matter.”
“When the room brightens when you walk in, you matter.”
“When you see the world as it is, but insist on making it more like it could be, you matter.”
“You are not your resume, you are your work. “
“You can’t shrink your way to greatness! “

Ideas

“Are you a serial idea-starting person? The goal is to be an idea-shipping person. “
“Big ideas are little ideas that no-one killed too soon. “
“Ideas in secret die. They need light and air or they starve to death. “
“No organization ever created an innovation. People innovate, not companies.”
“There’s no correlation between how good your idea is and how likely your organization will be to embrace it. “
“You can’t have good ideas unless you’re willing to generate a lot of bad ones.”

Leadership / Management

“Are you a serial idea-starting person? The goal is to be an idea-shipping person. “
“If you’re not uncomfortable in your work as a leader, it’s almost certain you’re not reaching your potential as a leader. “
“Leadership is scarce because few people are willing to go through the discomfort required to lead.”
“Leadership on the other hand, is about creating change you believe in.”
“’Teamwork’ is the word that bosses use when they actually mean ‘Do what I say’”
“The easiest thing is to react. The second easiest thing is to respond. But the hardest thing is to initiate. – When people ask you to tell them what to do, resist.”

Marketing

“Advertising is just a symptom, a tactic. Marketing is about far more than that.”
“Bullhorns are overrated: having ten times as many Twitter followers generates approximately zero times as much value. “
“But this is a remarkable egg, an egg worth talking about, an egg worth crossing the street for, an egg worth writing about. “
“Good marketers measure. “
“Good marketers tell stories. “
“If you can’t make money from attention, you should do something else for a living. “
“If you can’t sell to 1 in 1000, why market to a million? “
“If you’re a marketer who doesn’t know how to invent, design, influence, adapt, and ultimately discard products, then you’re no longer a marketer. You’re deadwood.“
“Low price is a great way to sell a commodity. That’s not marketing though, that’s efficiency.”
“Market-driven design builds the success of the product’s marketing into the product itself.”
“Marketing is the way your people answer the phone, the typesetting on your bills and your return policy.”
“Marketing management is now tribal leadership. “
“Most of the time, creative entrepreneurs lose interest long before their marketing message loses its power. “
“People don’t believe what you tell them. They rarely believe what you show them. They often believe what their friends tell them. They always believe what they tell themselves. “
“People rarely buy what they need. They buy what they want.”
“Perhaps marketing is about to transition to a new kind of profession, one that requires insight, dedication and smarts. “
“Relying too much on proof distracts you from the real mission–which is emotional connection.”
“Selling to people who actually want to hear from you is more effective than interrupting strangers who don’t. “
“The best marketing strategy is to destroy your industry before your competition does. “
“The reason it seems that price is all your customers care about is that you haven’t given them anything else to care about. “
“Why waste a sentence saying nothing? “
“You can win with consistent benefits, delivered over time. You win by incrementally earning share, attention and trust.”

Mediocrity / Status Quo

“’Good enough’ stopped being good enough a long time ago. so why not be great? “
“If you make a difference, people will gravitate to you. They want to engage, to interact and to get you more involved.”
“It’s uncomfortable to challenge the status quo.”
“It’s uncomfortable to resist the urge to settle.”
“In our desire to please everyone, it’s very easy to end up being invisible or mediocre.”
“Once you free yourself from the need for perfect acceptance, it’s a lot easier to launch work that matters.”
“Successful people are the ones who are breaking the rules. “
“The reason they want you to fit in… is that once you do, then they can ignore you.
“The status quo is leaving the building, and quickly.”
“You can raise the bar or you can wait for others to raise it, but it’s getting raised regardless. “
“You don’t have to settle. It’s a choice you get to make every day.”

Passion

“If there was ever a moment to follow your passion and do work that matters, this is it.”
“If you have no wish, how can it possibly come true? “

Relationships

“A long walk and calm conversation are an incredible combination if you want to build a bridge.”
“Be with the ones you love (and the ones that love you.) Ignore everyone else.”
“You can be right or you can have empathy. You can’t do both.”

Strategy

“Don’t have any meetings about your web strategy. Just do stuff. First you have to fail, then you can improve. “
“Put aside your need for a step-by-step manual and instead realize that analogies are your best friend.“
“The scalable, profitable strategy is to change the game, not to become the most average.”

Seth Godin Books
Here is a roundup of Seth Godin books you migh enjoy:

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Photo by jurvetson.

Do the Opposite

JD — Wed, 29 Jun 2011 14:00:00 +0000

Sometimes your best strategy is to do the opposite.

I was having lunch with a friend, when he made the comment that sometimes the best strategy is to do the opposite. Doing the opposite can be a great way to differentiate (aka a “differentiation strategy.”)

You might know some people that do the opposite well. Warren Buffet and his investment strategy come to mind. So does Muhammad Ali and his fighting strategy.

Here are some examples of doing the opposite:

Try simple Web pages over crazy busy ones.
Try focus over fanning out.
Try quality over quantity.
Try small instead of big.
Try specific instead of general.
Try Jack-of-All-Trades, instead of master of one (all hail the Renaissance Man.)

If all else fails, there’s one strategy you can always fall-back on …

You can always do the opposite of what doesn’t work.

Photo by Shandi-lee.

A Superior Product is Not Built from Its Features

JD — Tue, 28 Jun 2011 14:00:00 +0000

It’s built from it’s constraints.

I was flipping through one of my new favorite books, Killing Giants: 10 Strategies to Topple the Goliath in Your Industry , when the following line jumped out at me:

A Superior Product is Built from Its Constraints, Not Its Features.

So true, and I see that lesson at play, in multiple ways, every day.

Constraints are the forcing function of innovation. Constraints are the cornerstones of elegance and simplicity. Constraints are what flip the competition on its head … a strength becomes a weakness … or … a weakness becomes a strength.

Yes, constraints are the true romping ground of brilliance … by design.

The question then becomes, what constraints are holding you back, and how will you use them to leap frog your way forward?

Photo by Tony the Misfit.

Trends for 2011

JD — Wed, 15 Dec 2010 18:07:18 +0000

“The best way to predict the future is to create it.” – Peter Drucker

One of the best ways to deal with change is to anticipate it. At the beginning of each year, I take a step back to see the forest for the trees.

This is my summary of key trends to watch for 2011. Putting it together is a time-consuming exercise, but it’s one of the most important things I do for the coming year. It helps me see the bigger map. With the bigger map, I have a simpler way to understand what’s going on, anticipate what to expect, respond more effectively, and most importantly – make better bets on where to spend my time.

Don’t read this as a definitive list. Draw from it to help you create your own lens to make sense of the landscape and find your path forward. It’s long, I tried to keep it as scannable as possible. I didn’t want to cut it short for the sake of simplicity. Instead, I wanted to provide a solid map with sources you can draw from as you plan your road ahead.

What’s a Trend

Faith Popcorn’s BrainReserve describes trends in this way:

“Our Trends are not fads. Our Trends endure. Our Trends evolve. They represent underlying forces, first causes, basic human needs, attitudes, aspirations. They help us navigate the world, understand what’s happening and why, and prepare for what is yet to come.”

Key Questions I Ask to Find and Rationalize Trends

These are some of the basic questions I ask to find and rationalize key trends:

Where are the investments? (e.g. Where are the CxOs betting?)
Where’s the growth?
Where’s the pain?
Who are the pillars in the relevant niches and what are they saying? … more importantly, what are they doing?
What are the results?
What’s the data say?
What are consumers doing?
Is it a real trend or just a fad? … and does it matter?

The Short List – 5 Keys to the Future

Before the longer list, I want to shine the light on 5 key things:

Clouds and Clients. This is a key growth spot. How else do you keep up in a rapidly changing world, deliver services. disrupt the game, and bring new game changers to market faster than ever before? It’s the cloud. It marks the commodization of IT and computing. Companies can now innovate and disrupt at speeds and cycles we’ve never seen before. One simple metric is how quickly you can reach a million users now with a new service or product, compared to five years ago. If you want to stay relevant, you have to be thinking about your cloud and virtualization story. The opportunities here are amazing from the one-man band code slinger who spins up a Web farm for their app that changes the world to businesses that expose new capabilities to the World and help build the programmable Web. It’s also a way to simplify computing and move up the stack.
It’s a gamer’s world. I don’t just mean Farmville. It’s like Second Life meets the real world. With virtual goods on the rise, and more people connecting and having fun through games online, it’s a sweet spot for innovation. To fully appreciate why it’s a gamer’s world, check out Jane McGonigal’s TED Talk on how gaming can make a better world. (Here’s the gist — Games like World of Warcraft give players the means to save worlds and the incentive to learn the habits of heroes. What if we could harness this gamer power to solve real-world problems?) BTW – way to go Activision Blizzard. World of Warcraft: Cataclysm shattered previous sales records, by selling more than 3.3 million copies in its first 24 hours, making it the fastest-selling PC game of all time. I expect more lines to blur with work and fun and edutainment, as companies find ways to use gaming approaches to motivate today’s Web worker world. It’s gamer + education + business + life.
NUI experiences. NUI (Natural User Interface) is in. Great user experiences are the differentiator that drive adoption and make things stick. This is a great area for innovation, patterns, and practices. Speaking of innovation, how cool is the Kinect for XBox 360? It’s a hands-free controller. Talk about a game changer (and talk about getting closer to interacting with computers Minority Report style.) When you think about the possibilities of rich media, touch, speech, location-aware services, and “you-as-the-remote control” (think Wii and Kinect), the possibilities for amazing and immersive experiences are endless. More importantly, we can finally start showing how software improves productivity, effectiveness, efficiency, and fun. Have you also noticed the explosion of 3D into the cinema and living room? What’s next … 3D gaming?
The Mobile Internet. Take the Web wherever you go. It’s a powerful platform and ecosystems that bring the power of software to everyday scenarios, anywhere and everywhere. With Apple iPhone and iPad, Google Android, Windows Phone 7, the Web is truly in the palm of your hand, and the app story is just going to keep getting better,
The Year of the eBook. This is THE year. Earlier this year, Seth Godin said, “I’ve decided not to publish any more books in the traditional way.” With the Apple iPad, Sony Reader, Barnes & Noble Nook, and of course the Amazon Kindle, the game is on. Oh, yeah, and Google has a shiny new Google eBookstore. (You can read about the new Google eBookstore in Discover more than 3 million Google eBooks from your choice of booksellers and devices.)

One way to be thinking about changes is to put them into context. You can think in terms of home, on the road, and at work.

Key Trends for 2011

Here is my summary of key trends for 2011:

Analytics / BI (Business intelligence). Data-driven decisions win over guesswork. It’s tough, especially when statistics lie and we want to trust our instincts over our indicators. Start by asking, how do the great businesses drive their great decisions? Between information markets and crowd sourced intelligence and social networking, the real issue is how you leverage the data and turn it into intelligent decisions and smart feedback loops, and how you learn and respond.
"Consumerization" of IT. A while back, Gartner said Consumerization Will Be Most Significant Trend Affecting IT During Next 10 Years … I think we see that accelerating.
Cycles of change speed up even more. Life cycles shift to warp speed and lines blur between versions, creating living, breathing products. This creates pressure to master change management, adopt more Agile methods, figure out compliance and governance for the new landscape.
Digital Health. This is where cloud, BI/analytics and diagnostics can seriously change the game. There is also a shift to more user empowerment. If you take a stroll through Best Buy, you might notice the expanding Digital Health shelf. This is an area where more people may start to outsource their health to smart applications that can see patterns, provide monitoring, and alerts.
Education 2.0. Have you met Bill Gate’s favorite teacher, Sal Khan? Khan created Khan Academy. The Khan Academy is the free classroom for the world with hundreds of free videos and exercises and it’s mission is to provide a world-class education to anyone, anywhere.
Global distributed development. Competing in a global market means finding and using the best resources at the best price, anywhere in the world.
Location based services. Talk about relevancy in action and just-in-time ads. It’s all about specialization + location. Location, location, location takes on new meaning and relevancy. Jim Carroll says, “Consider the concept of a ‘location-intelligence professional.’ Today, this involves someone working within the insurance industry, learning how to link the extensive data-sets of geographic oriented information – think Google Maps – with existing insurance underwriting information, and with other statistical databases.”
Micropayments and virtual currencies. Second Life really set the trend here a while back, but it’s becoming more important in today’s world. This paves the way for real money for micro-transactions. It also creates a model for reputation based systems, which is important in a reputation-based economy.
Private cloud. The time is ripe for Enterprises to move to the cloud, and private clouds and integration will be key stepping stones.
Reputation based. It’s reputations that cut through the clutter and rise to the top, helped by word-of-mouth marketing and raving fans.
Standards / open systems. One of the way so win in today’s world is to build great experiences on top of open standards. Optimize for open over closed.
Talent Economy / Skills-for-Hire Economy. Specialization, market maturity and rapid cycles of change drive a demand for key skills. The key is to balance “generalist” skills in business and technology, along with specialized skills that the market values.
The rise of Social media / social networking. Between world-of-mouth marketing, raving fans, and real time information markets for customer feedback that can make you or break you, embrace and leverage the power of the people.
Tribes. Tribes are who you’re making your products for. Tribes are your network. You’ll find your next job through your tribe, or you’ll help members in your tribe find their next job.
User empowerment. It’s the rise of the spider and the fall of the starfish in a federated world.
User experiences. This is where reputations are built and raving fans are won. Think speed, simplicity, immersive experience, visualization, how you feel … etc. Design working backward from the end experience in mind. If the resulting experience suck will suck, don’t even start to build it.
Virtual goods. Whether it’s eBooks or information products or rewards in game worlds, virtual goods have real-world potential.
Web TV. Web TV is truly here. Improvements in broadband have certainly helped. Whether your box is Roku, Playstation, X-Box, Wii, Apple TV, an internet-ready blue-ray, or an Internet-ready TV, and whether you stream from Amazon video-on-demand, NetFlix, or Hulu, video-on-demand has become a reality. With Google TV on the scene, things really get interesting.

The Meta-Pattern for Trends

These are some of the patterns I’m noticing about the patterns of the trends:

“Built to Change” Over “Built to Last.” Again, this goes back to shifting from a static world, to a dynamic world and embracing change over fighting it. Run with it.
Consumer patterns drive Enterprise patterns. At the end of the day, people are consumers and the patterns show up in the Enterprise.
Decentralize and federate. Think starfish and spider.
Differentiate. Differentiate by giving your best where you have your best to give. Compete by dividing the niche and small is the new big (so you win with a portfolio that’s flexible and responsive to market demand.)
Execution is king. Operational efficiency and innovating in your product cycle is how you survive and thrive.
Prosumer. Think Consumer + Producer. Get your customers into your production cycle earlier so they help you create and innovate in your product line.
Pull vs. Push. Know the mental model from push to pull. In Push Me, Pull You–Dueling Business Models, Steve Bosserman says, “Through the three hundred-year reign of the Industrial Age, businesses “pushed” their products and services onto consumers. Limited choice accompanied by considerable marketing hype was enough to make the consumer buy. It was a sellers’ market. Now, thanks largely to the Information Age, consumers are evolving into customers who can select what they want from a variety of providers. It is becoming a buyers’ market.”
Relevancy is king. Google taught us this.
Reputation and brand are king. In a social networked world, it’s the network that says who the authority is and what works and what doesn’t.
Simplicity. Simplicity always win in the long run when it comes to adoption. Find ways to reduce friction and make things simple out of the box. Design for simplicity and keep things simple where you can.
Social Value / Community Good. Green is not optional. In a green world, if you’re business doesn’t play well with green values, it’s not a sustainable path.
Results are king. Talk is cheap. Results speak for themselves.

There are a lot of kings here. In checkers, it’s easier to win when you have a lot of kings.

The Way Forword

What’s past is past and the future

Absorb what is useful. Do it Bruce Lee style — take what you need, adapt it, and throw out the rest.
Agility. Stay adaptable. Flexibility is your friend. See The better adapted you are, the less adaptable you tend to be.
Anticipate change. Look ahead. Build your anticipation skills. Know the system. Things don’t just happen. The more you know the system and the ecosystem, the more you can anticipate what’s coming down the line. Pay attention to market leaders, trend setters, patterns, and cycles. Everything happens in cycles whether it’s growth or decline. best.
Be the Best on the Web. there’s no room for #2. Be the best at what you’re the best at. This is Good to Great in action.
Build a firm foundation. Know Maslow’s hierarchy and prioritize taking care of your basic needs. Know your “monthly burn” and be mindful of your decisions to support your firm foundation. The stronger your foundation is, the more you can help yourself and others when they need it most.
Compete where it makes the most sense. Compete on price, or quality or customer and don’t mix them up. This depends on which stage of the maturity cycle you are in, what the state of the market is, and what you can be the best at. For example, in a commodity market, don’t be the most expensive. Turn competition into collaboration and find the win wins to really change your game and rock the world.
If it doesn’t help you be your best, cut it out. This means living your values, and playing to your strengths. It also means giving your best where you have your best to give, as a person, and as a company. It’s how your survive, and it’s how you go from surviving to thriving. Any other way drains you in the long run and you get priced or pushed or competed out of the market. It’s the sustainable path.
Follow the Cycles. Knowing the path from cradle to grave, gives you an edge. It helps you anticipate what to expect and it helps you apply levers where they count. At a meta-level, there is a pattern for market maturity cycles. According to Alonso Martinez and Ronald Haddock, the 4 stages of market maturity are: 1) survival, 2) quality, 3) convenience, 4) customization.
Follow the Data. With all the usage data and analytics power of a Web world, you don’t need to guess at success. It’s very easy to use surveys to figure out what your customers want. It’s easy to provide options for customers to provide actionable feedback. Drive your decisions with data and make informed decisions. Do A/B testing and experiment your way forward.
Follow the growth. Follow your own growth, and follow the growth in the market. For example, in the tech industry some growth areas are mobile and cloud. Along these lines, create the growth.
Follow the money. Where there’s money, there’s growth. You can look to where CxOs are investing, or even where you company is investing and making its bets.
Follow the people. Great people have track records for a reason. Find the people who are connected and always seem to be ahead of the curve. Great ideas flow from great people and this is an idea economy.
Get back to the basics. Practice the fundamentals. They work. Among the chaos, there are always core principles, patterns, and practices that you can bank on.
Hone your personal brand. Make the most of what you’ve got and make sure your differentiation is obvious. For example, one of my differentiators is “getting results.”
Invest in yourself. Inner-engineering always pays off.
It’s your network and what you know. People sort and sift through people they know. In a skills-for-hire economy, your network is how you find the opportunities.
Know the cycles of things. For example, know the Four Stages of Market Maturity, the Technology Adoption Life Cycle, and the Diffusion of Innovations.
Lead yourself from the inside out. Follow your values, play to your strengths, and follow your purpose. It’s the sustainable path.
Learn and respond. Your ability to learn and respond will drive your best results. Innovate in your process and your product.
Model the best. You can speed up your learning curves and avoid costly mistakes by modeling from best practices and working examples. Whenever you think you’re faced with a new problem, first ask, who else might share this problem, and see if you can find three good examples of how this problem was solved.

Key Sources

I primarily draw from my own experience working with customers, and paying attention to what they’re paying attention to, as well as paying attention to my mentors and smarties across Microsoft, and whoever they tell me to pay attention to. One of the easiest ways to see where the action is and where the growth will be is to watch where companies put their best people and where they invest (I call it a “charter and bets check”). I also draw from the following:

Jim Carroll – Jim helps me see the trends across industries and look to patterns. He’s also great at identifying where the growth and opportunities are, and more importantly how to frame the landscape in a way that makes it actionable instead of analysis paralysis.
Trend Hunter – It’s effectively “crowd-sources insight” and it’s a great source for consumer trends. I’m a big believer that consumer trends pave the path for Enterprise trends. By watching consumer trends, I learn what to expect. I then watch how it shows up as I work with my customers. This pattern serves me well.
Internet Trends by Morgan Stanley – This is a data-driven view of the emerging trends. What I like about this report is how the data is used to help identify and illustrate the patterns.
C:Insights Trends – They focus on consumer trends and they specialize in research and advisory services. I look to them for patterns and key words in consumer trends.
Craig Mundie, Chief Research and Strategy Officer, Microsoft – Mundie has been in the business for more than 35 years, and he’s a forward thinker. I pay attention to Mundie because he is in the center of a lot of action. He’s also good at being able to see the forest from the trees.
Faith Popcorn – I first heard about Faith from Tony Robbins and I can see why he looks to her for patterns and trends. Her super skill is finding the more pervasive trends that shape the culture, consumers, and the community. She specializes in turning the insight from trends into actions for business and weaving them into strategies and tactics for business.
IBM Executive Exchange – The beauty of the IBM Executive Exchange is that it’s real insight from actual CIO, CFO, and CEOs. If you want to know what kinds of things will be getting attention in the coming year, simply look to the CxOs. The CxOs have an important vantage point in their company. They know their company’s strategy, top pain points, and key investments. You can expect ripple effects from their decision.
IDC (International Data Corporation) — IDC is an analyst that specializes in analyzing the future. I look to them to see what insights and trends they see across various sectors include energy, financial, government, health, manufacturaing, and retail.
JWT Intelligence – JWT is all about finding trends and turning cultural shifts into opportunities. I find their synthesis and the way they name their trends, insightful and compelling. I cross-check them against the other consumer trends I see.

With that in mind, here is a quick roundup of key trends to watch for from these sources …

C:Insights on Trends

20 Mobile Trends for 2011 — http://www.slideshare.net/CinsightsTrends/20-key-mobile-trends-201011

Trend 1 – Augmented Reality (AR)
Trend 2 – Social Search
Trend 3 – Social Gaining
Trend 4 – Mobile social Networks
Trend 5 – Mobile Discount Coupons
Trend 6 – QR Codes
Trend 7 – Micro Blogging
Trend 8 – Video Sharing
Trend 9 – Instant Networking
Trend 10 – Niche Networks
Trend 11 – Multitasking
Trend 12 – Virtual Personas
Trend 13 – Mobile IM
Trend 14 – Social Music
Trend 15 – Organic Technology
Trend 16 – Conversational Content
Trend 17 – Open Source Applications
Trend 18 – Peer Advertising
Trend 19 – Social Media Aggregators
Trend 20 – Mobile Apps

CIO Insight on Trends

Lundquist’s Top Tech Trends for 2011 – http://www.cioinsight.com/c/a/IT-Management/Lundquists-Top-Tech-Trends-for-2011-656290/

The CIO as Services Maestro
IT Services
Reverse Consumerization
The Mobile Enterprise
Virtualization, Cloud Computing
Big Blue vs. Big Red
Remember PCs?
Tablets
Video
Apple Stores

Computer Economics on Trends

Technology Trends – 2010/2011 –- http://www.computereconomics.com/images/default/ISS2010/TechTrends2010sample.pdf

Computer Economics identifies 19 hot spots for focus and where the action is:

Application Consolidation
Customer Relationship Management (CRM) Systems
Data Center Consolidation
Desktop Virtualization
Enterprise Social Networking
Enterprise Resource Planning Software
Governance, Risk Management, and Compliance (GRC) Systems
Help Desk Self-Support Systems
Infrastructure Cloud Computing
Legacy System Renewal
Microsoft Windows 7 Migration
Mobile Applications
Open Source Business Applications
Predictive Analytics
Radio Frequency Identification (RFID) Systems
Software as a Service
10G Ethernet
Unified Communications
Video Conferencing Systems

Craig Mundie on Trends

Reimagining Microsoft’s Future, Financial Analyst Meeting, July 29, 2010 -

http://www.microsoft.com/investor/Downloads/Events/Mundie_FAM_2010.docx

Mundie identifies three trends that are coming out of the labs and showing up in products:

Clients and Clouds – “The combination of the client and the cloud to create the new computing platform that will redefine both how people develop applications and ultimately how people consume them and what kind of things are possible to solve.”
Natural User Interface – “As the computer has become more and more powerful, and yet it’s more and more pervasive in our lives, we need ultimately to change the way in which we deal with the computer. There have been many technological trends that we’ve been studying in research for 10 or even 20 years, and they’re all starting to come together, enabled by this revolution in the microprocessor capability and networking, to some extent.”
Working on your behalf – “For time immemorial, computers have been a great tool, but increasingly, the world has so much stuff available to us that if we have to navigate it all by hand, it just becomes tedious. So, we’re now starting to turn a lot of the power of the computer to helping us get things done.”

IBM Executive Exchange on Trends

2010 IBM Global IT Risk Study – The Evolving Role of IT Managers and CIOs

The Evolving Role of IT Managers and CIOs

http://www-931.ibm.com/docs/vrmhost/GBE03365-USEN-00.pdf

Top 5 Emerging Technologies in terms of risk:

Social networking tools
Mobile platforms
Cloud computing
Virtualization
Service-oriented architecture

Additional insights …

“IT risk management and compliance has remained largely immune from budget cuts or cost reductions.”
Risk management helps defensively with business continuity, protecting reputation and proactively with a company’s agility, creating growth, and reducing costs.
Business continuity is about building a “risk-aware culture” and baking into the tools, processes and methodologies.
“IT security (vulnerability to hackers and unauthorized access/use of company systems) is the number-one concern among 78 percent of the IT professionals surveyed.”

Analytics: The new path to value

http://www-935.ibm.com/services/us/gbs/thoughtleadership/ibv-embedding-analytics.html

How the smartest organizations are embedding analytics to transform insights into action. The success pattern is to use analytics over best guesses – “The tendency for top-performing organizations to apply analytics to particular activities across the organization, as compared to lower performers.”

Smarter Cities – Cities are getting smarter. Watch the trailer on Smarter Cities

http://www-03.ibm.com/innovation/us/thesmartercity/index_flash.html#/home/trailer/

According to the video, cities around the world are tackling: “How to keep traffic flowing, cure a health care system, protect citizens while protecting their privacy, and how to demonstrate how one decision affects millions of people and involve them in making their city a better place to live.” Check out http://IBM.com/TheSmarterCity

IDC on Trends

Worldwide System Infrastructure Software 2011 Top 10 Predictions – http://www.idc.com/research/viewtoc.jsp?containerId=225895

Private Cloud Plans Will Mature, Dominate the Enterprise Infrastructure Software Agenda in 2011
Battle for Next-Generation Cloud Platforms Will Shift Focus from IaaS to PaaS
Microsoft Windows Azure Will Get the Respect It Deserves
New Enterprise Mainframe Will Create Integrated/Hybrid Solution Opportunities for Management Software Vendors, But MIPS Wars Will Continue
Server Virtualization Will Continue to Subsume High-Availability and Replication Functionality
Client Virtualization Will Become a Strategic, Mainstream Desktop Choice in 2011
Big 4 Will Become the Big 5 — Microsoft Will Displace HP as the Number 1 Global Distributed Systems Management Software Provider
Social Collaboration Will Force Shift in IT Service Management Support Best Practices
Enterprises Will Push for Broad ELA Subscription Pricing as ISVs Struggle to Accommodate Elastic Infrastructure and Cloud-Scale Operations
Novell Acquisition Will Be Catalyst for Linux Market Upheaval During 2011

IDC Predictions 2011: Welcome to the New Mainstream – http://www.idc.com/research/viewtoc.jsp?containerId=225878

Worldwide IT Spending Growth Will Be Solid, with Hardware Moderating and Rebounds in Software and Services
Emerging Markets Will Continue to Lead Global Growth in IT
Public and Private Cloud Adoption Will Surge, Two Cloud "Power Position" Battles Will Enter High Gear, and a Buzzword Will Get Ready to Fade
Cloud-Driven Datacenter Transformations Will Pick Up Speed
The Mobility Explosion Will Continue — with Huge Device Volumes, New Form Factors, and Billions of Mobile Apps
Broadband Networks Will Struggle — and Innovate — to Keep Up
Social Business Momentum Will Drive Consolidation, SMB Adoption
The Expanding Digital Universe Will Drive Cloud-Friendly Information Infrastructure and Real-Time Analytics for "Big Data"
"Intelligent Industries" Will Put Mobility, Social Networking to Work
Industry Positions for Customers Demanding "I Want My Web TV!"

2010 UtiliQ Rankings: Top 25 Intelligent Utilities

http://www.idc-ei.com/research/UtiliQ.jsp

In their “Looking Ahead” section, IDC provides a set of guidelines for strategies and investments for companies that want to improve their position:

Partner with the customer. “Recent customer backlash in some areas is in large part due to insufficient communication with the customer. Develop a b communications plan to make the customer aware of the long-run advantages of intelligent investments and use pilot programs as a testing ground for customer partnership.”
Drive company cultural change.” Becoming a more intelligent utility has a lot to do with people. Your employees need to understand your company’s vision, your strategy for getting there, why it’s important to all major stakeholders – including customers and regulators – and what this all means to your employees on a day-to-day basis.”
Improve processes for both "lean" and "green." “Efficient processes drive down the cost of maintaining the current environment and free up resources for innovation and growth.”
Make intelligent technology investments.” Find ways to get the best return from your technology investments by ensuring that your spending on information, communications, and energy technologies is in line with the business.”

Jim Carroll on Trends

Trending in 2011: 10 Major Trends to Start Thinking About Now!

http://www.jimcarroll.com/2010/10/trending-in-2011-10-major-trends-to-start-thinking-about-now/

The expectations gap. "Western society is defined by an increasing divergence between what people expect, and what they will get."
Industries blur. "The world of fashion and healthcare are going to merge. We are going to see an increasing number of bio-connectivity health care devices that will be used for the remote monitoring of health care conditions."
Energy gets smart. ".. Continued high-speed innovation with renewable energy sources, and velocity with grid-parity: the point in time at which the cost of producing renewable energy equals that of carbon based sources."
The collapse of attention spans. "If you don’t know how to think, market and promote at nano-speeds, you’re not ready for the future!"
Faster market evolution. "New products flood the market at ever increasing speeds, and fast-consumers snap them up in a moment and evolve their lifestyles quicker."
Innovation partnerships. Companies can’t keep up and just innnovate on their own … "enjoy greater success through open innovation and other external innovation partnerships."
The fight against workplace boredom. "Organizations are fighting back against boredom by trying to keep staff engaged."
American-Idolotry. People love heroes. "The future of workplace and partner renumeration is all about the red-carpet, the spotlight, and the celebration of success!"
The big impact of small incrementalism. "Everyone is learning that one way to win the future is by having a lot of small wins that add up to big gains."
Communities redefined. Community ergonomics will be a high growth industry. We have a growing senior population, which means communities need to be "rethought, re-designed, and reconstructed."

JWT Intelligence on Trends

http://www.youtube.com/watch?v=xtTk2J935Bg&feature=player_embedded

All the world’s a game
The urgency economy
Non-commitment culture
Eat, pray, tech
De-teching
Retail as the third space
Creative urban renewal
Worlds colliding
Hyper-personalization
Outsourcing self-control

Morgan Stanley on Trends

CM Summit, June 7, 2010

http://www.slideshare.net/CMSummit/ms-internet-trends060710final

Mobile Internet – Unprecedented Early Stage Growth
Innovation — Unprecedented Intensity?
Online Advertising — May Be Entering Golden Age, Finally
Online Commerce – Mobile Should Be Share Gain Accelerator
Communications — Share Shift to Sharing
Cloud Computing — Consumer First, Enterprise Next
Technology — What’s Next …
Beyond Technology — It’s Complicated …

Internet Trends, April 12, 2010

http://www.morganstanley.com/institutional/techresearch/pdfs/Internet_Trends_041210.pdf

Morgan Stanley on the “Mobile Internet” …

Wealth Creation / Destruction is Material in New computing Cycles — Now in Early Innings of Mobile Internet Cycle, the 5th Cycle of Last Half Century.
Mobile Ramping Faster than Desktop Internet Dic and Will Be Bigger Than Most Think — 5 Trends Converging (3G + Social Networking + Video + VoIP + Impressive Mobile Devices).
Apple Leading in Mobile Innovation + Impact, for Now — Depth of App Ecosystems + User Experience + Pricing Will Determing Long-Term Winners.
Game-Changing Communications / Commerce Platforms (Social Networking + Mobile) Emerging Very Rapidly.
Massive Data Growth Driving Carrier / Equipment Transitions.
Growth / Monetization Roadmaps Provided by Japan Mobile + Desktop Internet.

Rudolf Melik on Trends

Ten Major Trends for 2011 and How They Impact Professional Services and Project Delivery

http://www.psvillage.com/pulse/ten-major-trends-2011-and-how-they-impact-professional

Rudolf, CEO of Tenrox, does a great job overlaying his experience and perspective against Jim Carroll’s map of 10 majory Trends for 2011. Check out his article, but here is a quick blurb from his take on how the workforce will shift to more project-based execution.

Rudolf on Hollywood movie style execution — “More companies are also adopting a Hollywood movie style execution strategy by bringing people together to shoot the film (execute the project) and then disband the crew (the team) just as quickly as it came together once the film is completed (project is closed).”
Rudolf on project history over employment history — “Project workers are increasingly giving more importance to the next project they will work on instead of the company they will work at. More and more personal profiles take the form of an individual’s project history rather than their employment history.”

Trend Hunter on Trends

2011 Trend Repor Samples

http://www.trendreports.com/2011-Trend-Report

Interactive Retail – “Stores focus on customer engagement as primary business strategy.”
Social Shopping – “Shopaholics are using social media for networking and retail therapy.”
Perpetual Adaptation – “Obsessed with aesthetics, society embarks on the eternal makeover.”
Democratic Selling – “Online retailers rely on customer votes to push production.”
Radical Rebranding – “Pushing boundaries of reinvention to gain consumer attention.”
Hyperrealism – “Real life is simulated in photorealistic artworks that defy deception.”
Geriatric Couture – “Seniors become the anti-fashion inspiration for young people.”
Augmented Reality – “Augmented reality combines reality and virtuality, offering a new way to imagine.”
Half Formal – “Classed up business casual is a reflection of the new corporate attitude.”

What else is important that I should know about or have on my radar and heat map?

3 Thinking Techniques to Improve Your Intellectual Horsepower

JD — Wed, 19 Aug 2009 14:54:09 +0000

Here are 3 simple thinking techniques I tend to use each day. There are some more advanced thinking techniques, but here I’m boiling down to a set of 3 you can use today. In fact, you can even use them while you read this post. I’ll go through the thinking techniques in order from simpler to more complex, so you can use them right away.

For the sake of this exercise, let’s think of "thinking" as simply asking and answering questions. If you want to improve your thinking, ask better questions. Using these techniques will improve your thinking, by improving your questions.

3 Thinking Techniques
Here are 3 thinking techniques I use fairly regularly:

How Might That Be True?
PMI
Six Thinking Hats

How Might That Be True
When you hear something new, or information that conflicts with what you think you already know, ask yourself, "how might that be true?" This simple question will open your curiosity. It can also help you build rapport. This second point is especially important. If you’re quick to prove people wrong, people won’t share information with you. Rather than fight somebody on a point, right from the start, you can help them explore the point.

You don’t have to agree. Instead, you’re exploring possibility. Sometimes people have good information or knowledge, but it’s generalized so it appears to be wrong, but there’s kernels of truth or insight.

PMI
I think of PMI as Edward de Bono’s simplified version of Six Thinking Hats. PMI is simply Plus Points, Minus Points, and Interesting Points. Basically, all you do is ask yourself:

What are the plus points?
What are the minus points?
What are the interesting points?

This helps you expand your thinking. Notice how the plus points are first. This helps find the good first, before shutting it down with minus points. By looking for interesting points, you find yet another class of insights. This is where you might find some unexpected "ah-has."

Six Thinking Hats
Six Thinking Hats is Edward de Bono’s hard-core thinking technique, and it’s highly effective. You can use it for yourself or even in a room full of people. The beauty of the Six Thinking Hats is that you explore multiple perspectives for more complete thinking. The Six Hats are:

White Hat – the facts and figures
Red Hat – the emotional view
Black Hat – the “devil’s advocate”
Yellow Hat – the positive side
Green Hat – the creative side
Blue Hat – the organizing view

The most effective way I’ve found to turn these into action is to turn the hats into simple questions:

What are the facts and figures? (White Hat)
What’s your gut reaction? How do you feel about this? (Red Hat)
Why can’t we do this? What prevents us? What’s the downside? (Black Hat)
How can we do this? (Yellow Hat)
What are additional opportunities? (Green Hat)
How should we think about this? (what are the metaphors or mental models) (Blue Hat)

If you’re in a room full of people, rather than fight on topics, you can team up. Go to the whiteboard, write the list of questions above, and cycle through them as a group. Instead of tug-of-war, you’re now teaming up on “what are the facts and figures?” … … “why can’t we do this?” … “how can we do this?” … etc. This technique helps “black hat critics” step out of character and your reduce the overall energy drain of fighting point by point. Instead, you improve your overall thinking as a group.

What are your favorite thinking techniques?

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Innovation Life Cycle

JD — Mon, 13 Apr 2009 06:56:32 +0000

Photo by ralphbijker

What are the key stages in an innovation life cycle? What is the end-to-end value chain for bringing innovation to market? In “Smart Spenders, the Global Innovation 1000,” an article in strategy+business magazine, Barry Jaruzelski, Kevin Dehoff, and Rakesh Bordia write about the four key stages of innovation that the 94 high-leverage innovators have in common.

Key Take Aways
Here’s my key take aways:

Use the frame to analyze improvement opportunities. I found this frame helpful for thinking about the end-to-end cycle for innovation. After all, what good are ideas if you can’t bring them to market. A lot of ideas get stuck in the ideation stage.
Walk your innovation cycle. By walking your end-to-end system for bringing your ideas to end-users, you can find ways to reduce friction or find places to build synergies.
Optimize your system over a stage. Debottlenecking your end-to-end system is more effective than optimizing just a single stage.

Four Stages of Innovation
According to Jaruzelski, Dehoff, and Bordia, the four key stages of innovation are:

Stage 1. Ideation – Basic research and conception.
Stage 2. Project Selection – The decision to invest.
Stage 3. Product Development – Building the product or service.
Stage 4. Commercialization – Bringing the product or service to market and adapting it to customer demands.

High-Leverage Innovators
Jaruzelski, Dehoff, and Borida write:

Based on press coverage and interviews with executives, we conclude that each of the 94 high-leverage innovators has built sufficiently strong capabilities in all four links of the value chain, and has seamlessly integrated them, to provide a high level of performance over time.

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What Our Business Is, Will Be, and Should Be

JD — Mon, 09 Jun 2008 13:44:00 +0000

What is your business? What will it be? What should it be? These are powerful questions to ask.

In The Essential Drucker: The Best of Sixty Years of Peter Drucker’s Essential Writings on Management, Peter F. Drucker writes about asking what your business is, will be, and should be to avoid spending your energy defending yesterday and instead, spend your energy exploiting today and the future.

Key Take Aways
Here are my key take aways:

Ask what your business should be.
Systematically abandon what no longer adds value.
Don’t waste energy defending yesterday.
Exploit today and tomorrow through systematic analysis.
Systematically analyze existing products, services, processes, markets, end users and distribution channels.
Defining your business’s purpose and mission enable you to set objectives, develop strategies, and concentrate resources.

What Should Your Business Be
You should aim to figure out how to modify, extend and develop your business.

Drucker writes :

“What will our business be? Aims at adaption to anticipated changes. It aims at modifying, extending, and developing the existing, ongoing business. But there is need also to ask, What should our business be? What opportunities are opening up or can be created to fulfill the purpose and mission of the business by making it into a different business? Businesses that fail to ask this question are likely to miss their major opportunity.”

Systematically Abandon the Old
You should adjust for changes in society, economy, and market as well as respond to innovation

Drucker writes:

“Next to changes in society, economy, and market as factors demanding consideration in answering the question What should our business be? comes, of course, innovation, one’s own and that of others. Just as important as the decision on what new and different things to do is planned, systematic abandonment of the old that no longer fits the purpose and mission of the business, no longer conveys satisfaction to the customer or customers, no longer makes a superior contribution.”

Exploit Today and Work on Making Tomorrow
You should systematically analyze what your business is and what it should be to survive and thrive.

Drucker writes:

“An essential step in deciding what our business is, what it will be, and what it should be is, therefore, systematic analysis of all existing products, services, processes, markets, end users, and distribution channels. Are they still viable? And are they likely to remain viable? Do they still give value to the customer? And they are likely to do so tomorrow? Do they still fit the realities of population and markets, of technology and economy? And if not, how can we best abandon them – or at least stop pouring in further resources and efforts? Unless these questions are being asked seriously and systematically, and unless managements are willing to act on the answers to them, the best definition of “what our business is, will be, and should be,” will remain a pious platitude. Energy will be used up in defending yesterday. No one will have the time, resources or will to work on exploiting today, let alone to work on making tomorrow.”

Purpose and Mission Enable Objectives, Strategies, and Focus
Defining the purpose of your business is the key to managing a business.

Drucker writes:

“Defining the purpose and the mission of the business is difficult, painful and risky. But it alone enables a business to set objectives, to develop strategies, to concentrate its resources, and to go to work. It alone enables a business to be managed for performance.”

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5 Bad Entrepreneurial Habits

JD — Sat, 07 Jun 2008 11:58:00 +0000

What leads to the downfall of established companies? In The Essential Drucker: The Best of Sixty Years of Peter Drucker’s Essential Writings on Management, Peter F. Drucker writes about five bad Entrepreneurial habits that let small companies leapfrog over the big companies.

The Five Bad Entrepreneurial Habits
According to Drucker, the five bad habits are:

NIH (Not Invented Here)
“Cream” a market.
The belief in “quality.”
The illusion of the “premium” price.
Maximize rather than optimize.

The Downfall of Established Companies
Drucker writes how the bad habits let small companies use Entrepreneurial judo:

There are in particular five fairly common bad habits that enable newcomers to use entrepreneurial judo and to catapult themselves into a leadership position in an industry against the entrenched, established companies.

Not Invented Here (NIH)
Drucker writes about the Not Invented Here syndrome:

The first is what American slang calls NIH (“not invented here”), the arrogance that leads a company or an industry to believe that something new cannot be any good unless they themselves thought of it. And so the new invention is spurned, as was the transistor by the American electronics manufacturers.

“Cream” a Market
Drucker writes about the pitfall of only chasing the big customers:

The second is the tendency to “cream” a market, that is to get the high-profit part of it.

This is basically what Xerox did and what made it an easy target for the Japanese imitators of its copying machines. Xerox focused its strategy on the big users, the buyers of large numbers of machines or of expensive, high-performance machines. It did not reject the others; but it did not go after them. In particular, it did not see fit to give them service. In the end it was dissatisfaction with the service – or rather, with the lack of service – Xerox provided for its smaller customers that made them receptive to competitor’s machines.

“Creaming” is a violation of the elementary managerial and economic precepts. It is always punished by loss of market.

The Belief in “Quality”
Customers only pay for what they value — they don’t care how hard it was for you to produce it. Drucker writes:

Even more debilitating is the third bad habit: the belief in “quality.” “Quality” in a product or service is not what the supplier puts in. It is what the customer gets out and is willing to pay for. A product is not “quality” because it is hard to make and costs a lot of money, as manufacturers typically believe. That is incompetence. Customers pay only for what is of use to them and gives them value. Nothing else constitutes “quality.”

The Illusion of the “Premium” Price
Drucker warns to watch out for “premium” prices:

Closely related to both “creaming” and “quality” is the fourth bad habit, the illusion of the “premium” price. A “premium” price is always an invitation to the competitor.

What looks like higher profit for the established leader is in effect a subsidy to the newcomer who, in a very few years, will unseat the leader and claim the throne for himself. “Premium” prices, instead of being an occasion for joy – and a reason for a higher stock price or a higher price/earnings multiple – should always be considered a threat and dangerous vulnerability.

Yet the illusion of higher profits to be achieved through “premium” prices is almost universal, even though it always opens the door to entrepreneurial judo.

Maximize Rather Than Optimize
The fifth bad habit is maximizing when you should be optimizing. Drucker writes that you need to optimize and move on, rather than maximize:

Finally, there is a fifth bad habit that is typical of established business and leads to their downfall. They maximize rather than optimize. As the market grows deep and develops, they try to satisfy every single user through the same product or service. Xerox is a good example of a company with this habit.

Examples of Optimizing Over Maximizing
Drucker provides a couple of examples how smaller competitors beat the larger company through optimizing rather than maximizing:

Similarly, when the Japanese came onto the market with their copiers in competition with Xerox, they designed machines that fitted specific groups of users – for example, the small office, whether that of the dentist, the doctor, or the school principal. They did not try to match the features of which the Xerox people were the proudest, such as the speed of the machine or the clarity of the copy. They gave the small office what the small office needed most, a simple machine at a low cost. And once they had established themselves in that market, they then moved in on the other markets, each with a product designed to serve optimally a specific market segment.

Sony similarly first moved into the low end of the radio market, the market for cheap portables with limited range. Once it had established itself there, it moved in on the other market segments.

Key Take Aways
Here’s my key take aways:

Just because you aren’t the first, doesn’t mean it’s not a good idea.
Go after the low-profit part of the market too, not just the “cream.”
Customer’s don’t care how hard it is for you; they only pay for what they value.
Beware of “premium” prices.
Optimize over maximize.

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Innovation, Quantification, and Orchestration

JD — Tue, 27 May 2008 03:25:00 +0000

According to Michael E. Gerber, Innovation, Quantification, and Orchestration are the backbone of every extraordinary business. They are the essence of your Business Development process. In The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It, Gerber explains how Innovation, Quantification, and Orchestration are key to your business development process.

Key Take Aways
Here’s my key take aways:

Innovation, Quantification and Orchestration are the keys to your business. Innovation, Quantification and Orchestration are the backbone of business development.
Innovate in how you do things. Innovate in how your business does business.
Quantify it. Know the impact of your innovation. Quantify the impact of your innovations.
Bake your innovations into your business processes. Turn your innovation into results.

I have to admit, I really do like the distinctions and the precision that Gerber puts to the business development process. What he’s really emphasizing is that your business is a living, breathing system with people and processes and that to survive, your business needs to continue to grow and learn through innovation. But innovation doesn’t help if you don’t know the impact or if you don’t actually make it a part of your business. Beautiful.

Reflecting back, I know that innovation was a key part of our patterns & practices team. We pushed innovation and changing the game. It wasn’t necessarily about innovating in the product, though we did that too, it was about innovating in how we built what we built.

The Three Part of a Business Development Process
According to Gerber, the three parts of the business development process are Innovation, Quantification, and Orchestration.

Building the Prototype of your business is a continuous process, a Business Development Process. It’s foundation is three distinct yet thoroughly integrated activities through which your business can pursue its natural evolution. They are Innovation, Quantification and Orchestration.

Innovation
Gerber says you should innovate the way in which your business does business:

The Franchise Revolution has brought with it an application of Innovation that has been almost universally ignored by American business. By recognizing that it is not the commodity that demands Innovation but the process by which it is sold, the franchiser aims his innovative energies at the way in which his business does business. To the franchiser, the entire process by which the business does business is a marketing tool, a mechanisms for finding and keeping customers. Each and every component of the business system is a means through which the franchiser can differentiate his business from all other businesses in the mind of his consumer.

Quantification
Gerber writes that you should quantify your innovation so you know the impact and where to spend your energy:

But on its own, Innovation leads nowhere. To be at all effective, all Innovations need to be quantified. Without Quantification, how would you know whether the Innovation worked? By Quantification, I’m talking about the numbers related to the impact an Innovation makes.

Orchestration
Gerber writes that you should integrate your most effective innovations into your processes and routines:

Once you innovate a process and quantify its impact on your business, once you find something that works better than what preceded it, once you discovered how to increase the “yeses” from your customers, your employees, your suppliers, and your lenders — at that point, it’s time to orchestrate the whole thing. Orchestration is the elimination of discretion, or choice, at the operating level of your business. Without Orchestration, nothing could be planned, and nothing anticipated — by you or your customer. If you’re doing everything differently each time you do it, if everyone in your company is doing it by their own discretion, their own choice, rather than creating order, you’re creating chaos.

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