innovation playground Idris Mootee

Some Celebrate Failure. Some Even Romaniticize Failure. The Best Strategy Is To Avoid It!

The new M/I/S/C Bounce Back issue is out in newstand.This issue is packed with great articles about how companies should deal with adversity. It is one of the best issues ever.

For the last few years, magazines have made failure romantic, and start-ups love their failure stories. It’s true, there are some great stories out there: at the top of the list is Steve Jobs who was fired from the very company he founded. J.K. Rowling took Harry Potter to 12 publishers; all of them turned her down. Walt Disney filed for bankruptcy in his early twenties.

And there was Bernie Marcus who was the son of a poor Russian cabinetmaker from New Jersey who got fired from his job working at hardware store. With US $2 million in capital, Marcus and a partner went into business and opened a different format store with hangar-size, no-frills outlets, friendly service and a huge selection of products, they called it Home Depot. For Marcus failing was about character building and part of the journey to excellence.

These stories are both motivational and inspirational. Magazines from Fast Company to Harvard Business Review jumped on the bandwagon, selling the message it’s ok, even cool, to fail. Some people take this as a ticket to push bad ideas forward. Sometimes people carry failure as a badge of honor. There was a guy who wanted to join our company; his resume read ‘six times failure, a proud veteran.’ When I asked him whether he had any confidence that he will succeed the next time, he said no. It sounds like Vegas to me. The organizations we design and operate are not agile enough to support smaller experiments and the bigger the company is, the harder it is to bring innovation to the market.

Companies are using the stage-gate approach, taken from product development, to the innovation process, which is a big mistake. They’re also applying the wrong metrics to measure innovation projects. But the fact is failure is a bad thing – if you can avoid it, avoid it. Instead of putting too much focus on those who ‘made it’, and their struggles and resilience, we should be really be focusing on teaching people how to avoid failure in the first place.

The problem is we should not encourage people to fail, but should not penalize them either. We should be encouraging them to take calculated risks. The danger I am seeing is when young people embrace failure in the wrong way. It almost seems like they’re trying to race through more failures to earn a badge, rather than trying the best they can to give the idea the best chance. This ‘failure movement’ is mostly supported by mediocre people who have few ideas and cannot execute. They continue to romanticize failure, to the extent that they start to expect it. We need to prepare for failure, but never expect it. The failure movement is growing an irresponsible attitude toward risk-taking and Design Thinking.

Just because you fail many times, doesn’t mean that you have a better chance of emerging from challenges unscathed. It gives people an excuse to think harder and learn to apply Design Thinking principles to model scenarios to avoid or minimize failure. Most innovation can’t avoid failure. In fact failure is often by design, it is part of the process of iterative development and market learning. I don’t consider that failure.

Prototyping and learning from mistakes can ultimately lead to a higher chance of success, but it also de-risks project mistakes that usually come from the weaknesses of our human mind, such as hindsight bias. We should be teaching people how to deal with those biases.

The failure movement often falls prey to both of these biases. How many people can you name that went broke while attempting various business ventures, and are still broke? Can you write a list of these people more easily than a list of successful entrepreneurs who overcame immense obstacles to succeed? I think we are giving ‘failure’ too much credit.

I can see why those stories sell, they’re comforting to read and somehow people feels closer to success. This is not the case. If you’ve failed 50 times it doesn’t mean you’re closer to making it. Let’s stop over-glorifying failure and avoid the pain. We know what it means when you have your fingers burnt once. The smartest way is to teach people to learn from Other People’s Failure (OPF). There is so much we can and should learn from it.

When I teach my strategy courses in master level programs, 80% of my teachings are around how companies fail and how to avoid it in the first place. For me, it’s called ‘strategy.’ There are so many free lessons our there, you don’t need to pay the price to feel the pain. Someone did it already. There is no need to romanticize failures, instead, we should learn how to best avoid failure and, in the worst-case scenarios, be prepared to bounce back from it. That’s what Design Thinking can do.

For the full story, pls see the June issue of M/I/S/C which is available in 26 countries and digital subscription is available through Zinio.

Media Disruption Is Not Slowing Down. Mobile Is Now The Center Of A New Ecosystem.

The media business is not seeing the light at the end of the tunnel yet. When people asked me about my magazine and the economics of that, they were saying why am I in publishing business. Well that is not my core business, just a hobby. It has been almost three years since the first publication of MISC and readership is growing nicely. We're now in 28 countries and we have have the digital version. I am getting a lot of positive feedback from readers from all over the world. Perhaps I should make the next issue the thickest one. This is the first cover that was shot in Milan. And the next cover will be shot in Shanghai.

The media business is certainly not easy with the never-ending technological disruptions we are experiencing and new behaviors keep evolving, we are nowhere near the end of it. The word social media makes no sense anymore as it is already main stream doesn’t matter how you look at it. Many traditional media types continue to cling to an old way of doing things, based largely on making minor adaptation to existing approaches and some are relentlessly experimenting with finding new revenue stream, largely still through advertising or sponsorship.

There aren’t many new opportunities for business model innovation if you take a strategic view, people are still thinking about advertising or sponsorship. Yahoo and Google are the same. The hybrid model of readers’ empowerment and buttoned-down professional journalism is already fullyoptimized. Media executives are spending a lot of time thinking about the future of their industry and what it will look like in 2020. 

Five years ago everyone is thinking about the online model and suddenly the tablets came and changed everything. And what’s next? Multiple screens device, new interactivity through voice, gestures and more external data sources, and glasses and watches etc. No one knows how content discovery and consumption model will evolve given the abundance of choice consumers have today. Neutrality is probably not the best interest for the media industry.

Media business is still suffering from an identity crisis, at least for another decade. The business model will not change, we will still end up paying for content through transactional, subscription or advertising models although there will be more flexibility on how we purchase them. With every person with a smart phone also has a video camera that can turn them into amateur journalists, news will become real-time and shows us different views of any event. And contextual bits will be consistently updated and events unfold. The Twitters of the world are the instant updates and these short bursts will create more noises than news value and readers need someone to break them down into manageable pieces.

Audience now lives in a multi-screens world. They can choose between raw news and organized news. The three key drivers of mobile disruption are hyper-local (geolocation), integration with home appliances and digital payments. The three together can put mobile at the center of an entirely new ecosystem. It is not merely another form factor. It is the biggest leap forward since writing first arrived about 7,000 years ago, which only impacted a tiny percentage of our population. Word of mouth was the only “information system” for most of humanity and now that will be turbo-charged by mobile as it unlocks an incredibly deep desire and capacity among us (humans) to share personally relevant information and feelings such as “I am waking up happy to a sunny morning” etc. These personal information is competing for attention with other news. And for me, I'd rather be reading what my friends are saying than the news. CNN is depressing.

Idea Couture Is Ready To Take Innovation And Design Thinking To The Next Level.

This has been a very tough two months for me in terms of time and I have not been spending much time writing my blog as much as I used to. It is getting a bit difficult to find the time as we were going through a reorganization, adding new offices, putting new management system in place and at the same time trying to finish my two books on the weekends which will be published in May and Oct this year.

I am excited about my new Design Thinking and Strategic Innovation book that I hope to fill a gap in the market place. And management of the company is taking more and more of my time. So the time I can afford to touch projects is shrinking, I think I only spend 25-30% on projects these days instead of 40%. And people think I spend a lot of time on my MISC magazine, the reality is it is less than 2% of my time. I have a great team helping me with that. I only pick the theme, cover girl and the designs.

We have always designed Idea Couture to be a company that is agile, high style and deserve great love. But we recognize this is an ambitious goal because we want style, speed and substance. Not everyone can make it. I remember someone said something like "Out of difficulties and impossibilities grow miracles." Perhaps we’re naïve. Idea Couture is not a place for small thinkers or people with big egos. It is place for people who believe in being AWESOME and won’t spend time fighting for excuses.

I take pride of seeing people that I mentor growing everyday. We’ve come a long way since launching what we called an innovation firm – whatever that means. It is not a design firm with MBAs; or management consulting firms with some designers or digital agencies calling themselves innovation agencies. We are built from the ground up to do what we’re supposed to do – we work with organizations to uncover innovative ideas that sustainably grow market share or create new markets through powerful customer experiences innovation. We are close to the completion of our reorganization and I am very excited to wait for more new people joining us every week.

Our technology team is amazing and we’re now adapting new methodologies so we can deliver better and faster cross-platform solutions. Our strategy team is growing and growing and have so much untapped potential (unsolicited resumes are flying in dozens everyday).

Our design team is world class and I personally make sure they will remain the best all the time. They not only produce great work, but also open minded and egoless, and fun. At Idea Couture, design is at our very core, not the surface. Design here is under transformation and it is not done within a studio, it is done in the real world in future tense. Design is where technology and art breakeven and where love and logic intersects.

Our insight team is AWESOME with all capital and it is our intellectual powerhouse. When the company advanced forward to a new stage, our foresight capability was not meeting the standard that I required both in terms of strategic knowledge and professionalism. So we needed a full upgrade. Now we have a new global team and a plan to fully integrate that into our innovation process.

We have no time for amateurism. People are committed to giving their best. We just launched our idea couture culture page, which is my personal most favorite part of our site that best represents us. It shows us who we are as individuals which really what this company is all about. People are here for a reason, not for a job. They find their best and it is our job to bring out their bests. It is not always easy. It is how they find meanings. There is a strong correlation between job satisfaction and meaning.

We refuse to act like a "grown-up" company; however at times the company and will always want to think we’re small even though we have 6 offices around the world.

We refuse to act like a “think tank" as we don’t just think, we do.We don't just produce report, we ation on them. We use visual output for sensemaking and mobilizing change that increases organization adaptability and agility.

We refuse to act like we "know it all" but we believe we are equipped to find the best available solutions.

We refuse to accept any "best practices" as we are the one who invent “next practices”.

We refuse to accept that “amateur foresights” is better than no foresights. Actually it is better to have no foresights than wasting time on amateur futurists.

We refuse to accept that "ideas are everything", in fact ideas don’t worth much. They are cheap. There are no shortage of people with ideas and can never execute anything. The art of jump starting innovation is strategic commitment and it is more valuable because nothing happens until someone do something.

We refuse to accept people with "big egos", it is simply not part of our culture. But there is one nice thing about egotists is that they don’t talk and think about other people at all.

Idea Couture is a working prototype and will remain a working prototype in time to come.

Apple's Magic Is Not Repeatable. Innovation Means Reinvention. Not Taking A Page From Someone's Playbook. Here's The Proof.

Apple magic is not repeatable. And even if you think by poaching senior talents from them. The same can be applied to many great companies large and small. It is too simplistic to think that stealing talent from great companies larger or small can help a company to repeat the magic.

Here is a good example when Ron Johnson, former head of Apple retail joined JC Penny as CEO, his plan was to reinvent the company. From when Johnson took the reins Nov 1, 2011, the stock price dropped in half. He received $53.3 million in compensation for 2011 and his pay package for 2012 was $1.9 million, no bonus after the company booked a $1 billion loss for the year. Yes a $1 billion loss!

Johnson's strategy to bring some Apple Store magic to JCPenney was not innovative or strategic. His strategy was to move away from price and he started by taking off any discounts and introduce a store-within-a-store design that emphasized experience over value. According to him,"Inherently, department stores have significant advantages compared to all other retailers." I don't agree with that statement with the exception in some markets such as China, Korea and Latin America.

When he took over the job of the CEO, he said that successful retailers will be "the ones that start from scratch and figure out how to create fundamentally new types of value for customers" by asking "how do we reinvent the store to enrich our customers' lives?" Good questions to start with but did they end up with the right stategy? JCPenney’s business model needs reinvention, not just the retail format or taking a page from Apple’s playbook.

It takes more than that to transform a very out-dated business model. It was a bad idea in the first place to abandon the discounting that customers had come to expect, it’s a behavior they are not going to change. Instead they should embrace the idea of “discounting” and innovate around it. JCPenny wants their customers to feel "special" about discovering these discounts. And not getting rid of it. Reinvent it! Make it fun! Make it social! I can give you 10 ideas of how to innovate around the “discounting”. The backlash against this tactic was so strong that Johnson was forced to bring back sales and discounts last quarter. That was a big mistake. Innovation needs to be strategic. Design without strategy is useless.

JCPenny needs to rethink the needs of these middle-class shoppers that are shrinking in both total size and wallet. It should move down to aim at the expanding highest of the lower income group.This is where the opportunities are.

Retail is a tough business overall and there weren't a lot of innovation happening. Those giant interactive screens, talking mannequins and RFID tags are bringing the virtual into ‘real’ retail spaces and tablet computers are turning up at pos’ from independent boutiques to multi-national chains. There are also companies working on virtual ‘touch’ for users to ‘feel’ the texture of products they want to buy. While still in development stage, the innovation would address one of the main problems of shopping online. Shopping is as much a tactile experience as a visual one.

In a creepy addition to the tech enabled retail experience, mannequins may now be watching you as you browse. Via built in cameras and facial recognition software mannequins are now able to collect data on your race, age, gender and shopping habits to assist retailers in their marketing strategies. While it’s not quite new, retailers have been using in store cameras to collect data for years, the addition of facial recognition is making it a simpler process. Big brother/sister is watching you shop!

Introducing The 4P’s of Management: Peanut, Peter, Penis, and Perfection.


I used to interview between 200 to 350 fresh MBA grads a year, and many barely understand the basic principles of management let alone strategy and organization design. Most people developed some functional skills attending B-schools but most fail to develop a senior management perspectives despite those case studies method of teaching. Here’s the 4Ps that they need to teach in B-schools.

Here’s the Management 4Ps which I invented to train young managers: The Peanut Effect, The Peter Principles, The Penis Theory, and The Perfectionist Syndrome. If you have not heard all or any one of them, don't worry.


The Peanut Effect can be best described when referring to the lottery. The main reason why so many people play the lottery is because they place disproportionate weight on small probabilities. People don’t realize the true cost of a lottery ticket is a “peanut” and they don’t realize how the cost adds up over time. The same can be applied to buying snacks, coffee, magazines and other “cheap” items. If you are marketing your product or services, what you can learn from this is that you need find a way to emphasize the big benefits even if the probability to reap them is low. This can apply to bringing a vision to the company. Think big. Think possibilities and not only probabilities.

The Peter Principle is a belief that, in an organization where promotion is based on achievement, success, and merit, that organization's members will eventually be promoted beyond their level of ability. The principle is commonly phrased, "employees tend to rise to their level of incompetence." In more formal parlance, the effect could be stated as: employees tend to be given more authority until they cannot continue to work competently. It was formulated by Dr. Laurence J. Peter and Raymond Hull in their book The Peter Principle, a humorous treatise. Make sure you promote people to a job that is beyond their level of ability no matter how they try to justify the case. It doesn’t matter how long people have been on a job, sometimes younger manager can rise to the challenge in a shorter time. Experience helps .. but not always.

The Penis Theory is about finding your core. Penis envy in Freudian psychoanalysis refers to the theorized reaction of a girl, during her psychosexual development, to the realization that she does not have a penis. Freud considers this realization a defining moment in the development of gender and sexual identity for women. In contemporary culture, the term is sometimes used metaphorically to refer to women who wish they had a penis – lucky you don't need one to succeed in business. What you can learn from this is that too many marketers are spending too much time trying to be someone else. Often companies try and emulate the “big-wigs” and try to be like Apple, Amazon, or even Google. These companies however are spending too much time and too many resources trying to be something they are not.  It is more productive to understand who you really are – and what’s your core?

The Perfectionist Syndrome is common among high performance workplace. I have come across many high performers who are perfectionists – but not perfectionists in the true sense because when you look at their work, it is evident that they are too afraid to make calculated mistakes. And as a result, they often reach a performance ceiling. Perfectionism muffles our ability to hear, listen and learn and what you can lean from this is that perfectionism is impossible.

Let me tell you the dirty secret of management – forget about in search of excellence. There’s not a business anywhere in the world that is without problems or a business model that is perfect. Business is complex and imperfect. You can make a spreadsheet perfect but not the financials. Every business is managed by imperfect human beings and exists by providing a product or service to other imperfect consumers. Empathy makes up for the imperfection. Business is not a machine.

Can We Stop Talking About The Knowledge Management Nonsense Please? Knowledge Is Not Power. The Ability To Act On Knowledge Is Real Power.

The concept of knowledge management is purely an academic topic and has very little relevancy to the real world. When consultants start promoting it as if it is the central piece of strategy or oganizaion, I have a problem with it. When companies are thinking to hire a Chief Knowledge Officer to do the job of managing knowledge, we should first consider Chief Culture Officer or Chief Common Sense Officer, Chief Foresight Officer, Chief Politics Bashing Officer or Chief Human Factor Officer. These are more practical.

If the job of a CKO is to be the chief librarian or chief facilitator, then a company will have 100 chiefs. Some are suggesting CKOs can take a more strategic perspective, scanning across the enterprise to discover how they might improve processes and customer relationship management as well as promote employee learning. That’s called organizational design.

Some even suggest that in complex organizations where cross-business and cross-functional interventions aren’t likely to happen unless someone from the top team takes express responsibility for them, appointing a CKO would seem to be a good idea. That’s unrealistic. No P&L ownership means no influence. We need a better reason to justify another chief.

Forget a knowledge-management strategy, this is what the snake-oil salesmen/consultants invented to make them look good. Why we keep calling many things something they are not. Everything we are talking about is called “management”. If we take strategy, organization, knowledge, innovation away from management, what’s left in management? Perhaps for some management means the art of doing nothing. 

Management is a systematic way of ensuring carrying out of all activities is smooth and well aligned. It is different from leadership. Yes, now should I propose companies should add another chief – Chief Leadership Officer? Unless someone tells me knowledge is more important than leadership.

It is time for us to re-emphasize different aspects of 'management.' 
 Its task is to make managers and staffs capable of having shared vision, joint performance, to make their weaknesses irrelevant, says the Management Guru Peter Drucker. It creates harmony in working together – equilibrium in thoughts and actions, goals and achievements, plans and performance, products and markets

Lack of ‘good’ management causes inefficiency, disorder, confusion, low morale, delay, and negatively impacts company performance. Managing knowledge, money, people, processes and materials in the best possible way is the most important and essential factor for good management.

Knowledge is not the power. Power is power. The ability to act on knowledge is real power. Knowledge is useless when people can make sense of them. The ability comes from leadership.  Many managers in marge organizations do not have the ability and courage to act on the knowledge they possess even though by not doing so will cause the company to suffer or fail. It is not about knowledge. It is about leadership. End of story and please stop selling useless nonsense. Let's get back to work to improve 'management'.

Tim Cook Has A Far More Difficult Job Than Steve Jobs. He Has Been Making All The Right Moves So Far.

Congrats to Tim Cook who is over one year into his tenure as CEO of Apple. Big shoes to be filled and now Apple is moving into a new competitive arena because it is now the industry leader (defender) - the primary target for attackers. Tim has two jobs: 1/develop a competitive business strategy to defend its market share from the low end and block entrants  2/an innovation strategy to find an industry/category to disrupt leveraging Apple’s core capabilities. There were a few bumps like the Siri or Googlemap etc., but those were unavoidable.

Sabotta, a former director of Apple's federal sales group, criticitzes Apple’s CEO Tim Cook in his Kindle book that he is afraid of being wrong, lacks leadership skills, and is a "lightweight" when it comes to understanding technology. According to Sobotta, “Tim will react to the numbers or his fear of being wrong quickly. Fear of being wrong is a managerial trait that runs strong and deep in Apple because of the way Steve ran the company. Even the appearance of being wrong when in the end you might be right is dreaded at Apple. Technology-wise, I think Tim Cook is a lightweight. I never felt passion for technology from Tim like I did from Steve and some of the great engineers.”

I must say I won’t judge Cook’s performance or management style based on these criticisms (Sobotta acknowledges early in his Kindle book about his experience at Apple and that he was asked to leave Apple in 2004.) Being a CEO or Apple’s CEO is not exactly an easy job.

The way I take his comment is actually positive. A technology “lightweight” is more effective and desirable in the case of Apple to avoid the most common mistake in this industry when the technology voice overpowers business and customers. Technology heavyweight is actually less desirable for the CEO job, it is not Apple business strategy for technology big bet.

In his blog, Sobotta is critical of Apple and its Jobs' style of management in many ways. Some titles of his posts include"Do Apple Employees Need A Witness Protection Program?" "Has Apple lost its soul?"  He is basically saying Apple used some of the worst management practices to build the world’s most valuable company.

Apple is what Apple is today because of Steve Jobs’ strategic and aesthetic arrogance, charisma and capacity for work. If there’s one thing worse than a leader who micromanages to the point of stunting the creativity of his team, it’s a leader who knows and feels that there is a better way to work but fails to act on his gut. That wasn’t Jobs. As the master of anti-subopimization, understanding how he and Apple achieved such greatness isn’t about compartmentalizing each facet of Steve Jobs – it’s about recognizing how his various CEO personas were symbiotically entwined so that, when they intersected at crucial points, magic happened.

Maybe Steve Jobs was a perfectionist, not a control freak. Being in control is different from being a control freak. Those accused of being the former are often the victims of those who just don’t have the skin to stay in – and change – the game. Either way, new and extreme times call for new and extreme measures. Sometimes control is exactly what an organization needs. We see grand strategies that look good on paper and in the boardroom, but without an emotionally committed leader with vision, belief and conviction, the successful execution of idea into results won’t happen.

Armchair management critics will continuous to critique Jobs’ management style as ‘control’, even while every CEO from luxury goods to fast-fashion retail seeks to replicate his success. Ultimately, his example begs one simple question: Why aren’t more of us control freaks? Rather than decrying control, maybe it’s time to take the reins of our own ideas, innovations and organizations by studying the attitude, approach and micro-details that were responsible for transforming what those same critics once called a niche computer company into the $700 a share behemoth that everyone – including all those former PC fans – loves today.

As for Cooke, he has a far more difficult job that Jobs, Apple was an attacker and have nothing to lose to change the game. Now Apple is the defender and Cooke has to play both attacker and defender. It is a high risk game and he has every reason to react to the numbers or have ear of being wrong. That’s his job.

Design Thinking Can Make Strategic Management Simpler. But Never Simple. People Are Naive To Think That Management Can Be Explained In A Few Circles.

"Strateic Management" sounds academic. Should management be always scientific?  Since the publication of Frederick Taylor’s 1911 treatise, “The Principles of Scientific Management,” the field of industrial engineering has attempted to improve efficiency through ‘scientific management.’ At almost 100 years old, this form of industrial management is primarily based on a mechanical view of our universe as it relates to finding the ‘best’ ways to work.

Spurring powerful business models like the Ford assembly line, this discipline of speeding up productivity, controlling quality and minimizing cost remains the primary management modus operandi. Ever since then, scientists haven’t made much headway in scientific management.

In the mid-1980s, scientists used advanced computer modeling to seek order in chaos, creating mathematical diagrams at warp speed with the new technology. Though they found some fascinating data visualizations, they couldn't explain or understand the patterns. Like forecasting the weather, one could make educated predictions but never guarantee sunny skies. A decade later, some scientists stopped focusing on chaos and took a new interest in complexity.

Using advanced computer models to uncover the structure of life forms, a new approach was applied to business management. Comparing everything from beehives to genetic DNA to traffic jams to the hyperactive, complex properties of our technological and economical environment, they created many a compelling metaphor for strategic management. Still, these studies fell short of revealing any fail-proof practical applications. Today, Fortune 500s and other companies around the world still manage companies like machines – valuing profits before all else, maintaining authority with command-and-control management and relying on Six Sigma to improve quality, overreliance on the metrics on utilization, output and efficiency of mass production.

Thanks to Mr. Taylor,these practices suddenly serve to create a bureaucratic structure, distance executives from laborers and encourage them to manage rigidly and systematically. They do nothing to benefit companies that are looking to innovate in today's creative economy. If anything, it’s getting harder to weed out the chaos now that we’re bombarded with massive data and enterprise software, which forces managers to think in confining formulas. They get caught in a tangle of technology, complex processes, product portfolios and business units, and the straightjacket only tightens its grips. They watch in paralysis as these systems drain their financial and labor resources overnight.

Design Thinking is what Scientic Management needs to maintain its relevance. The only way to simplify management is to apply the voice we’ve lost touch of amidst all this white noise: our intuition. Intuition is anything but simple, yet it has the remarkable ability to bring clarity to strategic decision-making to light because it reveals a subtle qualitative and quantitative balance that is oftentimes needed for all the parts to click.

Sometimes we need to tune out the algorithms, the data and the consciousness. Sometimes it takes a white board, some weird field trips and a few crazt people to show us the world has changed and our business models have expired. We need to use our sense to get into the rhythm of disuptive competition. We need to free ourselves from the rational-logical-linear model that keeps us frozen or stagnant in a fast-moving and uncertain environment. We need a touch of finesse and the courage to wipe the slate clean.

Apple Vs Samsung - The Verdict Is A Wake-Up Call And Shaping The Very Nature Of What Competitive Strategy Means.

Here I am the first day in our new office - the building is officially named Idea Couture Place and I took the opporunity to talk about who we are and what are really good at to our people. There are still a lot of people that don't quite understand what a strategic innovation firm does and why it is not just another industrial design, strategy firm or creative house.

Now the move is over but it will take abother 2 months before we are really settled as many furnitures and equipment are still shipping from Italty, Belgium and China. I can't wait to see the fully finished office. For now, everyone is really happy. The roof top patio will look like a boutique hotel.

What exactly does Apple’s victory means for many other companies? The overwhelming patent infringement victory over Samsung is shaping the strategies of many and everyone is getting a wake-up call and now they need to revisit how they approach strategic innovation.

Apple’s CEO Tim Cook told his employees about how Apple values originality and innovation and pour their lives into making the best products on earth. They do this to delight their customers, not for competitors to flagrantly copy.

The result of this court case actually shapes the playing field of competition and the very nature of competitive strategy. Samsung, Motorola (Google), HTC, RIM, HP, Nokia, RIM, Microsoft, Xerox, Sony, Amazon and IBM . All have quivers full of patents and armies of retained patent lawyers ready to go to court to protect their interests and raise the barriers of entry for new players.

If you look at any new or old product categories, product and user experiences will become more andmore similar over time. Look around you and you realize a lot of cars looks the same and drive the same way. And over time, most phones, laptops or tablets will have similar designs and behaviors, just like TVs, cameras and typewriters. Switches and buttons whether they have rounded or rectangular corners or whatever shaped icons and the overall look and feel aren't likely the key points of differentiation. It has always been part of the commoditization process and companies will continue try to innovate with new ideas.

Every great innovation attracts copycats and it is hard to say whether we are promoting innovation by offering protection or deterring innovation by raising the barriers. There is no easy answer to this one. What’s next? If you’re a small start-up you will have a hard time to make it big as once you gain some attention and market success, you will then discover that you may be infringing on patents even though you think you’re not.

Can anyone realistically come up with an idea that can past the patent test of Apple/Google(Motorola)/Cisco/Xeorx/RIM/Sony/Microsoft and Intellectual Ventures (the world's biggest patent troll) when everone is waiting to collect royalties for what you were pretty sure was an original idea or invention.

I can’t wait for a day when Apple is suing Google and Google is suing Nokia and HP is suing Apple and Samsung is suing HP and everyone is suing everyone – one hell of a party. In the end, it's more likely that these crazy entanglements will result in more cross-licensing agreements than to massive payouts – one big happy family and everyone is getting a check.

As for now, my phone hasn’t stop ringing as every company needs to “out-innovate” and wants Idea Couture to bring Design Thinking to them. Now no one is safe. Welcome to the crazy world.

Success For Organizations Comes From The Ability To Drive The Strategic Transformation At The Most Critical Points. “Business As Usual” Is A Very Dangerous Expression These Days.

What is "Strategic Transformation?" For some, it is the framework and process of altering the way in which an organisation does business using new technologies and processes. For others, it is the effort to develop a measured, goal-orientated response to marketplace events, or to improve performance by becoming more customer-centricity. But the most stratgic reason is the design and execution of an integrated, future-oriented, enterprise-wide program aimed at moving to an improved future and achieve stretch goals.

In the multitude of voices and noises, strategic and organizational paradoxes, CEOs and their executive team need to learn to navigate, transition and lead their organizations into a new future. Companies that failed to transform their organizations because they put too much emphasis on tools and technology and not enough on foresights, mental mindsets and leadership behaviors. Their leaders failed to develop the shared visions, values and beliefs that serve as foundation for dynamic culture and to engage all employees to co-create the new culture and to provide opportunities for them to initiate and participate in a shared destiny.

They need to start by identifying the specific beliefs and practices that need to be changed, challenge them to create new “experiences” that form those new belief. Convincing someone to change is hard and trying to convince and mobilize a large organization to change is an almost impossible task. But it is still possible. You just need to know where to start and where to push and pull.

There are many reasons why transformation efforts failed, because they over emphasis on the business processes redesign and not enough attention on the underlying human behavior. Strategic transformation is not just about helping people to rethink and reflect on the past and the present; it is also a way to prepare people for future unknowns.

The heart of any transformation lies in finding and embedding the “purpose” of the business and what they individually must do to accomplish that purpose, how to build trust, create networks and innovate. In the course of Idea Couture six years journey of helping large companies to transform, we determined that to create a new level of performance or jump back into a growth mode, a few things matter most. Most transformation will include building a culture of purposeful innovation and high performance. They consist of the following core components: mental mindsets, purpose and meanings, innovation practices, co-creation and measureable results.

When mental mindsets are anchored on a perspective of the future and the executives, board of directors, managers and employees are all aligned, they generate managerial actions that, in turn, lead to superior business performance. An exciting future state and here executives can leverage this to create the cultural momentum that is critical to ongoing innovation success. This cultural capital can help companies to deal with the ambiguities of technological disruptions and external market uncertainties and to direct their energy to adapt to fast changing competitive conditions. Facing increasing complexity applying a single-dimensional focus is absolutely fatal. And any attempt to emulate a successful strategy of your largest competitor is also fatal.

Transformation leaders understand the importance of using “strategic foresights” to help their companies maintain relevancy to the future and it is an ongoing attempt rather than a one-off exercise. Transformation leaders also understand the need to invest a disproportionate amount of time in bringing the organization together and function as one, not as departments or business units that ended-up sub-optimizing the business performance.

Executives in lower-performing organizations complain that they don't have time for the "soft stuff" and needed all the attention for a real business strategy. Yes we need a strategy on where and how we compete and what part of the value chain we can leverage and how to leverage from the economics of scale and scope. Executives are sometimes confused about managing conflicting strategies and they think they have to make difficult trade-offs. It is 100% possible to manage two conflicting strategies without keeping them apart. But to do so first required to develop a strong culture of trust and the ability to accommodate a new management mindset. That's why trasnformation is needed.

Creativity And Innovation In Small And Medium Size Firms

I am in Egypt this week and trying to finish three big Power Point decks, writing 6 documents and finished reading 63 documents with a slow Internet connection. And trying to finalize the editorial content for March 2012 issue of my magazine. It is not easy.

The December issue of M/I/S/C/ is the big "Creativity" issue. It will be out in 25 countries in the second or third week of Dec. This is thickest issue so far  and will also available on iPad. I like the idea of "Creativity" as a magazine theme but also wanted to make sure they are relevant to business and not just pure creativity.

People often ask what is creativity? How does it happen? How do we prepare ourselves for it? Or can you be prepared for it? Do you have to be a whole-brain thinker, or do you only need the right side of your brain? Does it require for other profession that are usually not associated with creativity too? There is no simple answer.

Creative individuals have a few features that distinguish them from their peers. First, they possess both a rich body of domain-relevant knowledge and with well-developed skills to express them through different medium. And second, they find their work intrinsically motivating and enjoy the creative process not only interested in the outcome.

Creative people also tend to have a “discovery” orientation, which leads them to view situations from different perspectives, to find problems, and to ask novel questions and to avoid group-think. Almost every entrepreneur/start-up person is a creative person at heart, because it requires a lot of creativity to start and manage a new business (with the exception of franchise business). It is harder to find creativity in large firms not because there are not enough creative people, but the organization design and business processes make it almost impossible to be creative. And for them, creativity means finding ways to work around the system but not creating new ways to meet customer needs.

For that reason, many believe that small firms are more creative and innovative than larger firms. Not only they are more creative, they are more agile and nimble. But what about mid-size firm? There are companies that are too small to be big and too big to be small?

Medium size companies tend to lack resources and expertise whereas larger firms tend to have more resources and knowledge (including hiring consultants) but more vulnerable to external shock and any radical change. People think the sheer availability of resources means larger firms should be able to innovate along product, channel, process, and paradigm more effectively. That's not true at all. Any large established businesses carry their own old mental models and operational legacies make them hard to adjust to any changes - in particularly new ideas that cannibalize their core businesses.


I am not saying it is easier for small firms to innovate, it is not for the lack of creativity. Small medium companies tend to suffer a lack of knowledge cross-pollination and carry a higher degrees of path dependency. There are basically three strategies for innovation for small and medium size firms:

1. Advancing creativity and technological competitiveness based on new processes to deliver better products
2. Advancing technological and design creativity to design innovative new products
3. Advancing creativity and design thinking to turn products into experiences

Generally these three distinct models identify three trajectories for innovation that are largely separate from one another, although some complementarities exists. Medium size firms often suffer due to a lack of strategy or expertise to develop a robust strategy.  Their innovation in processes are often the results of the need to search for greater flexibility and minimize resource requirement. The high performance small and medium enterprises are usually the results of access to strategic advice combined their speed and agility in execution.

What Every Innovation Manager Needs To Know About Value Creation? Let's Start With Something Simple.

What is value creation? Something commonly used in strategic discussions but not well understood among managers as well as business or design school students. If a company needs to reinvent itself, they need put value creation first. If a disrupter wants to attack an industry leader, it needs to put value creation first. If your company want to grow your way to greatness, put value creation first. If your company wants to stay relevant, put value creation first.

There are many practical issues that affect value: from the nature of owners and investors to the shifting perception and behavior of the financial market, smart and foolish ways to invest, divest, reorganize and acquire etc. At the very core, it is about how companies create value by investing capital to generate future cash flows at higher rates of return than their cost of capital. And how different ownership structures and organization designs could affect value. Here I am talking about one level below.

For business managers, technologists and design professionals this means creating value with everyday decision. Value is the source of competitive differentiation. Here are a few ideas for you to think about:

• Every innovation manager needs to know or consider constantly how each new ideas will benefit consumers and in what way whether helping them to perform, produce, organize certain things or feel certain way. Value can be both tangible and intangible. Customer value needs to be created first before you can think about capturing them. Value creationn before value capture.

• Every innovation manager must understand and better than their competitors at understanding where, how and why value is created and destroyed within your industry and your company. Not only by business unit, by product, by customer, by channel, by market, by technology, or whatever that best reveal your formula that drives value creation.

• Every innovation manager needs to know how their decisions will enable the organization to create, deliver and capture new value from change and foresight. By bringing new perspectives, they can help executives to make better future-informed decisions that create value.
• Every innovation managers need to stay focused on the objective of creating value through purposeful innovation. Don’t be distracted by other management measurements and indicators that don’t build organizations (they are for managing organizations, not building them) and avoid the trap of spend time managing the lagging indicator rather than creating real value for the future.
• Every innovation manager needs to remember that creating value is also about managing expectations. They need to accept that even great ideas will fall flat and some mediocre ideas will be successful and timing can be a key factor. Avoid "short-termism" and confusing product extension is innovation. The best way we can build successful innovation that delivers growth is by putting value creation first.

A misunderstanding of “value” is causing many companies to be “recklessly cautious” or "creatively overwhelm" and forgetting that they are competing for tomorrow’s market and cash flow – not yesterdays. And by their “short-termism” they are passing up terrific opportunities to create long-term value. “Short-termism” is not good for innovation.

Does Management Needs Creativity? Is It A Gift Of God Or Product Of Preparation, Practice And Training?

This has been a very crazy week between meetings, conference calls with London, Mexico City, Shanghai, Seoul and Paris, magazine deadline and cover shoot, staff party, a number of other social events, and London Business School's worldwide alumni celebration took place last Thur in over 80 cities, and it was great to catch up with many familiar faces.

The next issue of M/I/S/C is the big "Creativity" issue - the magazine is doing so well and it is putting some pressure to keep up the quality. I started them magazine in a few weeks and operate it on a "zero planning" basis - meaning I do not have an editorial calendar, or editorial meetings and everything is sponstaneous. Scary thought for some. I was wondering what should I do about the cover last Monday. Decided to use a dancer instead of a model for the cover on Tuesday. Picked up the phone and called a dance school the same day and talked to Karen Duplise of Ryerson Theatre School (Performance Dance Degree Program) and went in for a quick casting the next day. Studio booked and shooting session scheduled on Thurs. Friday was for picture selection. I am pretty happy with it. You have to wait 10 weeks to see the next cover. Here's a peek.

Dance is like design, the question is always about how much art (the craft) and how much creativity. Celebrity choreographer Twyla Tharp choreographed Push Comes To Shove (1976) which featured Mikhail Baryshnikov and is now thought to be the best example of the crossover ballet. The crossover was a perfect example of creativity in a highly disciplined art. 

Tharp has written a book about creativity - The Creative Habit: Learn It and Use It for Life.  In the book she shared what she has learned about creativity and how those lessons apply to anyone with creative impulses. She believes that creativity is not a gift from the gods, but rather the product of preparation and effort. Some truth here but not sure I torally agreed with that.

 

Like to share a reprint of my interview with London Business School Alum News on new thinking that is crucial to innovation, first apprared in LBS Alumni News and then LBS IMPACT.

What do you see as your impact on the world? My LBS degree was my second graduate business degree. I was able to have the luxury to put more focus on the quality of the learning in one specific subject area rather than multiple foundation components. I was excited about learning from inspiring teachers such as Sumantra Ghoshal, Tom Stopford, Jules Goddard and many others. They inspired me to think about deep management and leadership and helped me to realise the difference between good managerial practices influenced by bad management theories and good management theories applied through bad managerial practices.

Business and government leaders are experiencing a profound crisis of trust and even legitimacy and that has triggered a loss of confidence in traditional ways of ‘managing’. The very core of many management theories is being questioned and ‘management’ is close to, if not passed, the point of failure. My mission is to help Fortune 500 companies make sense of what’s going on and to rethink, re-imagine and reorganise for a future of unprecedented uncertainties and opportunities through applied design thinking. I operate at the intersection of design thinking, competitive strategy and organisational change.

What indelible mark do you want to leave on the world? As a side project, I publish a design thinking and innovation magazine called M/I/S/C/ (Movement/Intuition/Structure/Complexity), the idea came to me when I was in Milan trying to decide what magazine I wanted to read on the plane. I really wanted one about innovation and change but the ones on the shelf were not hitting the mark. So I decided to start one. It is doing amazingly well selling in over 22 countries. Now we’re doing a Spanish edition as well as an iPad edition. I hope it can take on a life of its own and leave a mark by inspiring future managers and business thinkers.

What is the greatest lesson you’ve learnt? I learnt that it is very important to embrace failure. I should have failed more and more often when I was younger. But unfortunately people did not encourage ‘embracing Failure’. I didn’t take many risks and I played it very safe with every project I started. I did everything I could to make it work because failure was seen something that holds you back. I know now that you learn more when you fail often. Trying to avoid failure only prevents growth but once you alleviate that fear many more opportunities present themselves to you. Slowly, ‘failure’ is starting to gain acceptance and it will make future professionals much stronger and wiser.

What was your biggest mistake? Not listening to my intuition. It’s difficult to trust yourself when everyone and everything around you is telling you something different. Trusting your gut is one of the most important things you can learn. Also, not leveraging the opportunities that come with any crisis. Every situation presents obstacles but also opportunities – you just have to look for them.

What is the next step for you? I’m very excited about helping companies power into the future through design thinking. It is the reason I go to work (or the airport) every morning. Our company started as an experiment and is now fast becoming the most talked about innovation firm. The next step is to secure a global presence and build the next generation of leaders that will propel our growth. The future is exciting.

Strategic Innovation And The Quest For Breakthrough Ideas

Innovation is now a very hot topic at the C-Suites. I have speaking a lot on the subect the last 5 years. The funny part is I am talking about Strategic Innovation and many still talk about Technology Innovation as if it was the sole source of innovation. People are very interested in my interpretation of Build-to-Last and the idea of Build-to-Fail-Fast. (Photos by Anddres Ahues)

Every large companies is thinking about it and most have little idea how to integrate that with the organization’s strategic intent; how to make it work within certain organizational structure; how to decide which project to fund; how to create a balance between reenergizing the core and attaching white space; what types of people to staff the innovation function; or simply what capabilities gap are needed to fill.

We just finished a comprehensive study of 42 top companies across 5 industries to understand what challenges and barriers that exist as well as little success stories. Generally speaking there are less success stories as we dig deeper but it is fine since they are at the early stage of the learning curve. We codified the knowledge in lessons learned as well design and implementation options as well as capabilities gap and how to fill them. It is not a 50,000 ft view but a very pragmatic understand of the situations and every company can learn from it.

The most common mistakes fell within the following:

• Focus too much on break-though ideas or staying too close to the core
• Not focus enough on creating break-through ideas and results in only incremental ideas
• Using existing (advertising and market research) vendors and infrastructures as well as toolkits that are not designed for innovation but apply them anyway and not getting the results desired.
• Fail to articulate the core purpose of innovation and how it is driven by the strategic intent and value creation
• Totally don’t understand the concept of ‘whitespace mapping’ let along the sense-making process behind it, and just called it ‘brainstorming’
• Fail to create a space that allow people to play and experiment and fail safely. A physical space that people with shared interest to play with ideas.

The idea of an innovation space is a good one. Even Microsoft has a space called Garage, a place opened last week that gives their staff access to tools such as a soldering bench, a laser cutter and a 3D printer to make prototypes and connect people with shared interest.

The Garage is in one of the oldest Microsoft buildings in campus but lots of windows. They filled the building with new "pods," basically temporary work spaces where teams of 2-6 employees can set up shop to collaborate on projects for a couple of weeks.

It is an attempt to create a safe place to fail. Fail as much as you like that and you wont get demerit points. Like all large companies, any good idea can get lost quickly because the initial market size is too small or it is threat to the core. Every company should explore having a space like this. Or they can house them in one of our offices that are even better.

The New Game Of Strategy: Applied Design Thinking In Business Innovation And Transformation

Just when I thought I can have 2 days in an office then I realized I have to be In NYC tomorrow for a few days. I am writing this post on a flight after missing my connection in Houston, and just finished teaching a three days Strategy graduate course with a focus on strategic innovation and design thinking. What I did was bringing the Harvard Business School case study method of teaching and apply it to design thinking and innovation, it is really interesting and probably an innovation itself because innovation means going against the conventional analytical thinking.

The shift from teaching competitive strategy to strategic innovation changes how the case studies were originally written for. I am using the same teaching material but instead applying atotally different pedagogical focus – which is how to avoid the very obvious and how to develop and apply ‘New Game’ in strategy making. It was intense for the students but they were liking it. I theorize, practice and teach these concepts and so for me, it is not academic, it is real.

Strategy is never that simple as picking the right competitive positioning, segments or competing on different dimensions. It is often complicated because it involves changing of mindset and mental models – mindsets that inspire individuals and teams to think imaginatively, to take risks, to seek out, and to expand the boundaries of a business or redefining customer value. It is hard.

Then there are structural, systems and processes for sharing of ideas, sense-making of data and working together. This includes developing new perspectives and collaborate on ‘white space mapping’ which was never taught at business schools. The very nature of competitive advantaged has changed and I challenged anyone who tell me if they really have a real and relevant competitive advantage that they thought they have.

The information revolution continues and is enabling companies to easily (and sometimes cheaply) match current competitive differentiators and rapidly create new ones. The result is that competitive advantage is evolving from simply focusing on differentiation, low cost or focus. The idea is to do all, the stuck in the middle can be a desirable position if you understand the underlying economic forces. Most business school students and even professors hardly understand how to apply the Five-Forces properly and let alone adapting it to a very different business environment where speed, empathy and community become key strategic elements in addition to bargaining powers and competitive dynamics. We need a new framework that takes into consideration the use of community in business strategy development. I’ve used cases including Method, Microsoft X-Box, Loco Motor and a few others to illustrate the concepts.

I think I should start developing teaching notes based on the original case study but with a different teaching emphasis. Classic views on strategy include Joseph Schumpeter focuses attention on innovation and entrepreneurialism. He suggested that bigger the company the more resources and diversification one can bring to R&D and as a result get better return on innovation. Michael Porter, following Alfred Chandler, focuses attention on business organization and competitive strategy and introduces the concept of cluster to explain competitiveness.

Today’s the nature of strategy and competitive advantage is drastically shaped by strategic innovation -- powered by customer co-creation; desire of consumer to change the status quo and powerful social innovation networks; integrates customer deep into business organization; demand chain into supply chain and contrasts inter-firm relations in terms of market, and closed or semi-closed and open-networks.

The attempt to develop competitive advantage is only the first step. It is sustaining the advantage that is far more challenging. How often companies invested millions and millions of dollars to create barriers for entry only to find out they lasted only for a short a few months. Waking up one morning seeing that your industry value chain was being reconfigured and the expiry date of your business model was last week is not exactly a fun thing. If you find that every six months you have to innovate on something the market will embrace is too exhausting, it is time to embrace design thinking.