So today we're going to look at the art of innovation. Why are some companies so
massively creative and innovative? And other companies, you know, same people,
same industry, basically, let's say they're the same structure and they're
competing head-to-head. But one company is just massively more innovative than
the other. And, you know, there are so many cases, especially in technology, where
you've got a big company, they've got great compensation, you know, they pay
incredible sign-up bonuses, sometimes in the millions of dollars, to get the very
best people. And then you've got a smaller, more scrappier company that is
double or even 10x their innovation. But, you know, they still pay fair. But
why is the smaller company so massively innovated and the big one isn't? And
why then do engineers leave those higher-paying jobs to take a lesser
paying one to be part of an innovative environment? That's a fascinating idea.
Why will people leave? What's the unique thing that makes people want to be part
of the smaller, more scrappier company? And it comes down not just to money. In
fact, money is certainly a part of it, but it's not the top thing. What people are
looking for is a culture of innovation. They're also looking for meaning, because
meaning drives innovation. If we know why we do something, why does this matter?
What are we trying to do? And that's why innovation always starts with a clear
sense of purpose. If you want to attract the best people, be really clear about
your purpose. It's not just having a great business plan, or a great comp plan,
or just really good at recruiting. Because when the team understands the
deeper why, why do we do this? Why does this matter? What contribution are we
making to the world? That's what you attract people to. And then build around
that why a practical way to help people get things done. And that's what we've
been focusing on in this section on innovation. So you might want to ask your
team, what difference are we making in our clients lives? In other words, why
does what we do matter? You know, how do we make money from this idea? And what
meaningful impact will this create? These are the kind of questions that, if they
are taken seriously, start to ignite the spark of innovation in every team. So
when you focus on delivering real value and genuine problem-solving, the
financial success is the natural outcome. But when you pursue financial success as
the primary thing, you kill the innovation. Because then it's all about
how fast can we sell? How much can we sell? How much can we charge? As opposed
to, what genuine value are we bringing to the world? Now when I say that, it might
sound easy. It is actually very difficult to deliver real value in the world at a
price that's sustainable. That's the hard thing to do, right? It's easy to sell
things or easier to sell things. But when we're delivering real value and solving
a real need and doing that in a way that we can keep doing it, meaning we charge
enough, we make enough, and it's financially sustainable. So that's the
point of what we're talking. So it's really a great idea to take a minute,
take a, in this training time, and talk and ask your team, what is it that we do
that creates value? What value are we bringing to the world? It's really
interesting to hear what people think. You may think as the team leader, perhaps,
that, oh, our people know what we do. You'll be surprised the answers that you
get. Every time I've done this in every business, I'm no longer surprised,
but everybody gives a different answer. Because people see the business through
their own lens, through their contribution, through the their point of
view, through their spectacles, if you like. Okay, so let me share with you three
power hacks that will help you ignite the innovation engine in your
organization, or if you have a good innovation engine, how to take it to the
next level. So number one, clarity drives speed in innovation. When we clear about
what it is we do, when we clear about how we're delivering value to the
world, this makes a huge difference. Think of FedEx's peace of mind. It's not about
packages. It's not about getting your delivery. It's that peace of mind that
you're giving your customer, knowing that if FedEx is doing the delivery, it's
going to be, it's not going to get lost, it's not going to get damaged, and it's
going to be on time.
gives you peace of mind.
They sat down and really thought about
what's the actual value
and the actual business we're in.
I like to ask our team things like,
what business are we in?
Well, it turns out FedEx is in the peace of mind business.
They're not in the business of logistics and packaging
and insurance and all those other things.
Those are the how they deliver peace of mind.
So what is it that you actually do?
What do your customers actually receive
when they experience what you've created?
So why don't you ask your team that question?
What do our clients actually receive?
Are they getting peace of mind
or are we just sending them a box
and making sure we don't break it?
So that's the difference
because when it's about peace of mind,
innovation goes to, okay,
how do we improve the peace of mind?
How do we give the customer that sense of confidence
that it really will be peace of mind for them?
And when we come up with that phrase, peace of mind,
then it's really helpful to keep it to a few words.
If you can get this down to a few words,
then you have what we call an innovation mantra.
In other words, it's a mantra or a mantra
that's designed to stimulate innovation around it.
Peace of mind, okay.
If we're giving our customers peace of mind,
so peace of mind is three words.
So can you do, can you say what yours is
in two or three words, four words?
You know, when I was running a technology firm,
we were the first tech firm
to become the front end for annuity processing
for Wall Street.
So this was a very big deal.
And you might ask, how does a company come from nowhere
and suddenly land that position in less than one year?
And part of it was it took us three months
to come up with our innovation mantra.
And that was when we figured it out.
And it was because we realized
that when agents are sending in annuity applications,
there's something like 90% of them have errors.
And then they have to be manually typed into a system
and checked again.
And then it took several weeks for that policy
or that product to be actually issued.
Same with life insurance.
So we thought, well, what if we can take away the six weeks
and do it really quickly?
So are we in the speed business?
And the more we thought it,
we realized we were in the business
of creating new business transactions
that were complete, correct, and compliant.
So we called it complete, correct,
and compliant new business.
So those three words.
So what can we innovate around
what makes it more complete, more correct,
and more compliant?
And there's so many compliance
and regulatory requirements around that industry
that that meant a great deal to our customers.
Because our customer wasn't the person buying the annuity.
The customer was the big insurance company
that was signing up to sell their products
through our technology.
So your innovation mantra needs to be simple
and down to three or four words.
Just a simple phrase.
If you have that,
you've just sparked your innovation cycle.
You've just lit up your whole innovation culture.
Number two, ship it imperfect but not crappy.
Look, waiting for a product to be perfect
is the enemy of innovation.
For those of us who have to have it absolutely perfect
before we ship,
now we don't have to ship stuff that's really terrible.
But one of the ways we jump the curve
is to ship stuff that might not be 100%
and we know it isn't.
Sometimes we'll release products
and we'll release them to a small group of people
and say, hey, there's a brand new product.
It's a great idea.
We're trying to make it perfect.
Would you work with us on it?
Sometimes we'll give it away or make it cheaper
just to get it out the door.
Because what we're looking for
is that feedback loop from the customer.
It's very difficult to sit in a lab or a boardroom
or in some sort of brainstorming session
and try to figure out every single thing
the customer's actually gonna do with the product
and how it's going to be used.
And so the quicker you can get it out there into the wild,
the quicker you can learn and get that feedback loop.
So the feedback loop is really what you're after.
So now we have an innovation mantra a few words long.
We have a feedback loop because we shipped it
and didn't wait for it to be perfect.
Because we might ship a perfect product,
but it may not be exactly what the customer wants
or how they wanna use it.
So what does perfect really mean then?
Then the third last hack is let innovation surprise you.
You know, embrace the unexpected applications.
Your team will discover new uses for your innovation.
but your customers will often use your products in ways you didn't expect.
And so with that feedback loop, with a clear innovation mantra of what it is you do,
now you start to watch where the products are actually being used and by who.
Sometimes it's not where you think it will be. You think, well, this product belongs with this
customer, but it's not actually the case. It's like when the whole process of hard drives were
getting smaller and smaller. And I think in the innovator's dilemma, Christensen explains this
basic idea. So, you know, when there was the big five and a quarter inch drives and then the three
and a half inch drives came out and they were tiny. So where did they go? They went to the big,
you know, desktop manufacturers and said, hey, we've got this device. Well, and they said, well,
what does it do? I said, well, it's not this big. It's not this big. And they're, well, it's a
desktop. Space isn't really the thing. You know, we don't really care. Well, is it more, is it
faster? No, it's actually slower. Does it hold more data? No, it actually holds less. And so guess
what happened? An entire industry came from that, which were called laptops. And now laptops use
those devices. So guess what happened with the next innovation? 1.8 inch drives, these tiny little
drives. And they went to the laptop people and said, hey, here's a laptop. So, well, is it faster?
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
people will want to deal with that. What came next was medical devices use these tiny drives. Well,
that was just a quick example of often the application, where you think and where you
think your customers are and who you think your customers are will change when the feedback loop
starts to inform you. So embrace the unexpected applications because you might just be opening
up an entire new industry, an entire new market segment for your products. So three bold action
questions. Number one, what meaningful impact have we created? What is that innovation mantra?
Number two, how can we create a feedback loop so we can learn how to make our products better?
And then the unexpected applications. How do we embrace those unexpected applications and
open up new markets? I hope you enjoyed this.