WEBVTT

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So today we're going to look at the art of innovation. Why are some companies so

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massively creative and innovative? And other companies, you know, same people,

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same industry, basically, let's say they're the same structure and they're

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competing head-to-head. But one company is just massively more innovative than

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the other. And, you know, there are so many cases, especially in technology, where

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you've got a big company, they've got great compensation, you know, they pay

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incredible sign-up bonuses, sometimes in the millions of dollars, to get the very

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best people. And then you've got a smaller, more scrappier company that is

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double or even 10x their innovation. But, you know, they still pay fair. But

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why is the smaller company so massively innovated and the big one isn't? And

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why then do engineers leave those higher-paying jobs to take a lesser

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paying one to be part of an innovative environment? That's a fascinating idea.

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Why will people leave? What's the unique thing that makes people want to be part

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of the smaller, more scrappier company? And it comes down not just to money. In

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fact, money is certainly a part of it, but it's not the top thing. What people are

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looking for is a culture of innovation. They're also looking for meaning, because

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meaning drives innovation. If we know why we do something, why does this matter?

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What are we trying to do? And that's why innovation always starts with a clear

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sense of purpose. If you want to attract the best people, be really clear about

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your purpose. It's not just having a great business plan, or a great comp plan,

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or just really good at recruiting. Because when the team understands the

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deeper why, why do we do this? Why does this matter? What contribution are we

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making to the world? That's what you attract people to. And then build around

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that why a practical way to help people get things done. And that's what we've

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been focusing on in this section on innovation. So you might want to ask your

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team, what difference are we making in our clients lives? In other words, why

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does what we do matter? You know, how do we make money from this idea? And what

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meaningful impact will this create? These are the kind of questions that, if they

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are taken seriously, start to ignite the spark of innovation in every team. So

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when you focus on delivering real value and genuine problem-solving, the

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financial success is the natural outcome. But when you pursue financial success as

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the primary thing, you kill the innovation. Because then it's all about

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how fast can we sell? How much can we sell? How much can we charge? As opposed

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to, what genuine value are we bringing to the world? Now when I say that, it might

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sound easy. It is actually very difficult to deliver real value in the world at a

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price that's sustainable. That's the hard thing to do, right? It's easy to sell

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things or easier to sell things. But when we're delivering real value and solving

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a real need and doing that in a way that we can keep doing it, meaning we charge

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enough, we make enough, and it's financially sustainable. So that's the

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point of what we're talking. So it's really a great idea to take a minute,

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take a, in this training time, and talk and ask your team, what is it that we do

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that creates value? What value are we bringing to the world? It's really

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interesting to hear what people think. You may think as the team leader, perhaps,

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that, oh, our people know what we do. You'll be surprised the answers that you

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get. Every time I've done this in every business, I'm no longer surprised,

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but everybody gives a different answer. Because people see the business through

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their own lens, through their contribution, through the their point of

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view, through their spectacles, if you like. Okay, so let me share with you three

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power hacks that will help you ignite the innovation engine in your

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organization, or if you have a good innovation engine, how to take it to the

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next level. So number one, clarity drives speed in innovation. When we clear about

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what it is we do, when we clear about how we're delivering value to the

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world, this makes a huge difference. Think of FedEx's peace of mind. It's not about

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packages. It's not about getting your delivery. It's that peace of mind that

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you're giving your customer, knowing that if FedEx is doing the delivery, it's

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going to be, it's not going to get lost, it's not going to get damaged, and it's

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going to be on time.

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gives you peace of mind.

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They sat down and really thought about

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what's the actual value

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and the actual business we're in.

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I like to ask our team things like,

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what business are we in?

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Well, it turns out FedEx is in the peace of mind business.

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They're not in the business of logistics and packaging

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and insurance and all those other things.

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Those are the how they deliver peace of mind.

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So what is it that you actually do?

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What do your customers actually receive

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when they experience what you've created?

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So why don't you ask your team that question?

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What do our clients actually receive?

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Are they getting peace of mind

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or are we just sending them a box

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and making sure we don't break it?

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So that's the difference

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because when it's about peace of mind,

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innovation goes to, okay,

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how do we improve the peace of mind?

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How do we give the customer that sense of confidence

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that it really will be peace of mind for them?

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And when we come up with that phrase, peace of mind,

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then it's really helpful to keep it to a few words.

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If you can get this down to a few words,

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then you have what we call an innovation mantra.

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In other words, it's a mantra or a mantra

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that's designed to stimulate innovation around it.

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Peace of mind, okay.

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If we're giving our customers peace of mind,

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so peace of mind is three words.

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So can you do, can you say what yours is

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in two or three words, four words?

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You know, when I was running a technology firm,

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we were the first tech firm

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to become the front end for annuity processing

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for Wall Street.

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So this was a very big deal.

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And you might ask, how does a company come from nowhere

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and suddenly land that position in less than one year?

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And part of it was it took us three months

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to come up with our innovation mantra.

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And that was when we figured it out.

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And it was because we realized

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that when agents are sending in annuity applications,

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there's something like 90% of them have errors.

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And then they have to be manually typed into a system

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and checked again.

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And then it took several weeks for that policy

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or that product to be actually issued.

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Same with life insurance.

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So we thought, well, what if we can take away the six weeks

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and do it really quickly?

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So are we in the speed business?

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And the more we thought it,

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we realized we were in the business

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of creating new business transactions

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that were complete, correct, and compliant.

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So we called it complete, correct,

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and compliant new business.

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So those three words.

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So what can we innovate around

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what makes it more complete, more correct,

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and more compliant?

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And there's so many compliance

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and regulatory requirements around that industry

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that that meant a great deal to our customers.

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Because our customer wasn't the person buying the annuity.

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The customer was the big insurance company

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that was signing up to sell their products

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through our technology.

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So your innovation mantra needs to be simple

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and down to three or four words.

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Just a simple phrase.

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If you have that,

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you've just sparked your innovation cycle.

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You've just lit up your whole innovation culture.

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Number two, ship it imperfect but not crappy.

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Look, waiting for a product to be perfect

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is the enemy of innovation.

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For those of us who have to have it absolutely perfect

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before we ship,

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now we don't have to ship stuff that's really terrible.

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But one of the ways we jump the curve

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is to ship stuff that might not be 100%

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and we know it isn't.

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Sometimes we'll release products

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and we'll release them to a small group of people

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and say, hey, there's a brand new product.

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It's a great idea.

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We're trying to make it perfect.

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Would you work with us on it?

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Sometimes we'll give it away or make it cheaper

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just to get it out the door.

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Because what we're looking for

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is that feedback loop from the customer.

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It's very difficult to sit in a lab or a boardroom

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or in some sort of brainstorming session

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and try to figure out every single thing

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the customer's actually gonna do with the product

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and how it's going to be used.

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And so the quicker you can get it out there into the wild,

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the quicker you can learn and get that feedback loop.

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So the feedback loop is really what you're after.

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So now we have an innovation mantra a few words long.

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We have a feedback loop because we shipped it

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and didn't wait for it to be perfect.

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Because we might ship a perfect product,

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but it may not be exactly what the customer wants

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or how they wanna use it.

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So what does perfect really mean then?

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Then the third last hack is let innovation surprise you.

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You know, embrace the unexpected applications.

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Your team will discover new uses for your innovation.

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but your customers will often use your products in ways you didn't expect.

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And so with that feedback loop, with a clear innovation mantra of what it is you do,

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now you start to watch where the products are actually being used and by who.

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Sometimes it's not where you think it will be. You think, well, this product belongs with this

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customer, but it's not actually the case. It's like when the whole process of hard drives were

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getting smaller and smaller. And I think in the innovator's dilemma, Christensen explains this

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basic idea. So, you know, when there was the big five and a quarter inch drives and then the three

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and a half inch drives came out and they were tiny. So where did they go? They went to the big,

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you know, desktop manufacturers and said, hey, we've got this device. Well, and they said, well,

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what does it do? I said, well, it's not this big. It's not this big. And they're, well, it's a

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desktop. Space isn't really the thing. You know, we don't really care. Well, is it more, is it

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faster? No, it's actually slower. Does it hold more data? No, it actually holds less. And so guess

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what happened? An entire industry came from that, which were called laptops. And now laptops use

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those devices. So guess what happened with the next innovation? 1.8 inch drives, these tiny little

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drives. And they went to the laptop people and said, hey, here's a laptop. So, well, is it faster?

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No. Does it hold more data? No. And so, you know, I don't know if we need that. I don't know if our

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people will want to deal with that. What came next was medical devices use these tiny drives. Well,

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that was just a quick example of often the application, where you think and where you

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think your customers are and who you think your customers are will change when the feedback loop

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starts to inform you. So embrace the unexpected applications because you might just be opening

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up an entire new industry, an entire new market segment for your products. So three bold action

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questions. Number one, what meaningful impact have we created? What is that innovation mantra?

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Number two, how can we create a feedback loop so we can learn how to make our products better?

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And then the unexpected applications. How do we embrace those unexpected applications and

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open up new markets? I hope you enjoyed this.