Inspired Leadership
September 12, 2008 by office
Filed under Innovation, Leadership
(29309)
Leaders who are trying to come up with game-changing innovations have three responsibilities:
Hone skills
Perform that add value
Role model innovation
1. Leaders need to role-model the behaviors of an innovation culture: because this gives permission for everyone else to do the same. In particular, leaders need to be collaborative, connected, curious, open and courageous. As leaders continually exhibit these behaviors in their own day-to-day work, a culture of innovation will take root and grow.
2. Leaders need to perform the roles that only can do and that add value: which are really four specific tasks:
How leaders perform these roles can make or break the potential for their organization to become innovation.
3. Leaders need to hone their own personal skills: and operate at a higher level when it comes to innovation. They need to have a willingness to try risky new things, even if they don’t work out most of the time. They need to make connections and integrate new ideas into existing operations. In all, leaders need to balance their intellectual and emotional skills to ensure the right things are happening all the time.
If you want your own organization to be more innovative, you must build a pipelne of future leaders of innovation teams. The four key building blocks in building just such a pipeline are:
1. Have regular formal performance evaluations: where you sit down and systematically evaluate how your people have performed on innovation project assignments. Develop a scorecard that gets used consistently to gauge and measure performance. Make use of these performance evaluations and scorecards when it comes time to make promotions. Actively promote those who have demonstrated abilities in making innovation happen.
2. Identify potential future innovation leaders early on: and give them assignments that test them right from the start. Let them demonstrate their abilities in delivering new innovations on progressively more important projects. Make it possible for outstanding talent in this area to shine.
3. Provide solid developmental experiences: by putting in place support mechanisms that will help strengthen the skills of these future leaders. The most critival support systems to put in place are usually:
4. Openly reward and recognize innovation talent: by doing things that everyone will take note of and aspire to enjoy. P&G has formed the Vic Mills Society, which is named after the man who invented Pampers disposable disposable daipers. When P&G employees demonstrate exceptional innovation prowess, they are named Vic Mills members. This carries a lot of prestige within the company. P&G also gives out an annual Cost Innovation Award to whichever team has added the most value to the company that year through innovation. The award dinner is attended by all the senior management, who salute the winners. These things work for P&G, and your challenge will be to come up with comparable opportunities to reward those who come up with innovative ideas for your own organization.
Achieving sustained organic revenue and profit growth will require innovation at the center of your business. When all is said and done, it’s your job as leader to make it happen. It is our belief that leaders of innovation are made, not born.
–A.G. Lafley & Ram Charan
Innovating can mean sticking your neck out; a courageous, connected culture means it won’t get chopped off, and that you are not alone in taking risks. An innovation culture fosters openness, curiosity, networking with suppliers and customers, and the ability to say, ‘I have a problem I can’s solve. Can someone help? That is the attitude that both describes an innovation culture and helps to create one. It is one in which people want to go above and beyond the norm because they have a sense of mission. To do that, you need the social mechanisms and tools to mold diverse into highly functioning teams.
–A.G. Lafley & Ram Charan
Who should be the Chief Innovation Officer (CIO)? As innovation is becoming a more recognized business growth driver, many companies have carved out room in the C-suite for a new position–the chief innovation officer. There has been a noticeable increase in such positions, including at such companies as Citigroup, Wrigley, Humana and Kellogg. P&G, however, has decided not to create a separate CIO position. In effect, A.G. Lafley is the CIO of the company as a whole, but the partners very closely with the chief technology officer and with the group presidents who are the CIOs of their respective businesses.
–A.G. Lafley & Ram Charan
P&G’s goal is to create a structure that can deliver innovation on a regular basis; for that to happen, line business leaders have to buy into the idea. P&G doesn’t see the need to create a separate, high-level executive to do what current business leaders should be doing–namely, being the innovation and growth leaders for their businesses. In fact, they believe that creating this position goes in the wrong direction by creating silo, when the ideal is to integrate innovation into the businesses and with the participating functions.
–A.G. Lafley & Ram Charan
Well Connected Culture
September 11, 2008 by office
Filed under Innovation, Leadership, Management
(29308)
Innovation is always a team sport. The cliche about a long genius slaving away doggedly in isolation until some great “Eureka!” moment occurs is a myth. If you want innovation to happen in an ongoing and systematic way, you need to make exploring the frontiers an integral part of the way you do business every day. In other words, you need to integrate innovation methodologies into fabric of your corporate culture.
Coming up with interesting new ideas is one aspect of innovation, but another is combining good ideas to come up with something even better. A third dimension is putting together the people who can turn a concept into reality. This is way innovation can be termed a team sport.
Effective innovation teams tend to have people acting in some reasonabley well-defined roles:
Idea generators: Idea generators: the conceptual thinkers who push the edge of the envelope. They see connections and think up new ideas free from all constraints.
The project manager: The project manager: who is responsible for everything coming together and getting the product to market on time. The project manager needs good social skills, discipline and attention to detail.
The task executors: The task executors: team members who make sure milestones are met, all the right elements are in place and all of the operational issues are addressed.
The team leader: The team leader: who needs to be a “pragmatic dreamer.” The leader needs to create a team environment where people feel free to articulate their off-the-wall ideas and then engage in a robust examination of whether or not those ideas are workable.
How those teams get put together and then how they subsequently end up gelling is a matter of the way your company tends to do its best work. Some companies, like Apple, sometimes form a skunkworks team who work at their own separate location. Others have a research center where new ideas can be generated on an ongoing basis.
P&G’s approach to this is to use two different methods:
1. The company has set up a specific theater of innovation called Clay Street: which is part think tank and part corporate sandbox. P&G executives identify a problem they need to work on and then put together a multidisciplinary team of eight to twelve people to go to Clay Street and focus on the issue. Team members work at Clay Street and focus on the issue. Team members work at Clay Street and focus on the issue. Team members work at Clay Street exclusively for several weeks, where they get immersed in the problem and try to come up with solutions. A number of breakthroughs have been generated this way.
2. P&G also uses co-location quite extensively: bringing together all of the diverse teams that are working on the same issues. For example, P&G has established a Pampers Baby Discovery Center where all of the previously scattered baby-care operations have now been relocated. This allows everyone to hear the same thing at the same time without any distorting filters getting in the way. It also allows people to bounce ideas off each other and creates an environment where new ideas can find root. More than 400 studies a year are carried out at the Pampers Baby Discovery Center to try and figure out the market sweet spots. The success of this is reflected in the fact that Pampers is now a $7 billion a year brand, P&G’s largest.
Creating a corporate culture that encourages innovation takes lots of time and effort for everything to gel together. Culture is how people act everyday, so to change the culture, you have to change behavior. The is no other way to do this. The key is start small and build from there. To build a corporate culture of innovation, focus on the “4C’s and an O”:
Total Control
August 29, 2008 by office
Filed under Entrepreneurship, Innovation, Leadership
(25907)
For many years, companies like Microsoft publicly vilified Apple, with its preference for proprietary systems. But now, all of a sudden, even Microsoft is switching gears. The company is trying to build its own version of the “digital hub” for households with Microsoft own Zune and Xbox at the center. Microsoft is starting to build hardware as well as write software, which is quite a sea change from its usual modus operandi.
So why does Jobs insist on such total control over things? The answer is probably not as complex as it might appear at first glance. It appears that Steve Jobs wants to control everything lock stock and barrel for some hard-nosed philosophical and practical reasons. Jobs wants to make complex devices like smart phones and computers into genuine mass-market products. To achieve that, he needs to wrest control of the devices back from consumers and get everything working smoothly. The only way Jobs can achieve that is if Apple controls every part of the overall customer experience.
Jobs is a control freak extraordinaire. He controls Apple’s software hardware, and design. He control’s Apple’s marketing and online services. He controls every aspect of the organization’s functioning, from the food the employees eat to how much they can tell their families about their work, which is pretty much nothing. Some have suggested that Jobs keeps tight control at Apple to avoid being ousted again. Perhaps, some have speculated, Jobs’s controlling tendencies are the result of his being adopted as a child. But Jobs’s control-freak tendencies have lately turned out to be good business, and good for the design of consumer-friendly gadgets. Tight control of hardware and software pays dividends in ease of use, security and reliability.
–Leander Kahney
Whenever there is a tight integration of hardware and software, a more manageable and predictable system emerges. Sure, closed systems limit choice, but that restriction also means the resulting system can be made more reliable. Open systems are by definition more fragile because there are more people who can do things that might clash. Therefore, Jobs has always made systems that are closed to outside developers–from the Mac through to the iPod and now to the iPhone.
Admittedly, most of Apple’s computers now have expansion slots built in to them, but this only reflects the fact that expansion devices are now much more rigorously tested and certified. Furthermore, most of the components in the latest generation Mac computers are the same as almost any other personal computer. But Apple is the last company in the computer industry that has retained control over its own software. That means if things go wrong, customers can call Apple and get it sorted out. There is none of those frustrating standoffs that arise sometimes where the computer manufacturer blames Microsoft for a fault and Microsoft blames the computer manufacturer. Apple is in the driver’s seat from go to whoa.
This also means that upgrades can be handled seamlessly. Apple can upgrade its iPods quickly and efficiently trough the iTunes software. When a customer next downloads a song, the new version of the software can be uploaded and installed without the customer even being aware of it. Apple can also build in all kinds of other integration–all thanks to Steve Jobs and his stubborm insistence on going it alone and controlling the entire widget.
Apple is also perfectly positioned to develop whole business systems rather than stand-alone computers and other gadgets. Apple can bring together applications that combine features of the operating system and totally integrated software and hardware in ways other companies simply cannot match because they don’t understand all of the components to the same degree.
The fact that Apple is able to deliver the whole experience with its iPod is probably the main reason no other companies have yet managed to bring to market an iPod killer. Most rivals attempting to dislodge Apple have focused on building a better gadget, but the iPod’s real secret sauce is the blend of hardware, software and services that delivers a great customer experience. Apple makes all of those components come together in a way that delivers a great customer experience.
Apple’s the only company left in this industry that designs the whole widget. Hardware, software, developer relations, marketing. It turns out that, in my opinion, is Apple’s greatest strategic advantage. We didn’t have a plan, so it looked like this was a tremendous deficit. But with a plan, it’s Apple’s core strategic advantage, if you believe there’s still room for innovation in this industry, which I do, because Apple can innovate faster than anyone else.
–Steve Jobs
The roots of Apple were to build computers for people, not for corporations. The world doesn’t need another Dell or Compaq. The great thing is, Apple’s DNA hasn’t changed. The place where Apple has been standing for the last two decades is exactly where computer technology and the consumer electronics markets are converging. So it’s not like we’re having to cross the river to go somewhere else; the other side of the river is coming to us.
–Steve Jobs
In a consumer market, design, reliability, simplicity, good marketing, and elegant packaging are key assets. It’s coming full circle–the company that does it all is the one best positioned to lead.
–Leander Kahney
It seems to take a very unique combination of technology, talent, business and marketing and good luck to make significant change in our industry. It doesn’t happen that often.
–Steve Jobs
Innovation has nothing to do with how many R&D dollars you have. When Apple came up with the Mac, IBA was spending at least 100 times more on R&D. It’s not about the money. It’s about the people you have, how you’re led, and how much you get it.
–Steve Jobs
All of which would make the iPod a contender for the biggest consumer electronics hit of all time. The current record holder, Sony’s Walkman, sold 350 million units during its fifteen-year reign in the 1980s and early 1990s. Perhaps the most important aspect of the iPod’s success is that the iPod doesn’t have a sole progenitor: there’s no single ‘Podfather.’ It’s never just one person–success always has many fathers.
–Leander Kahney
Inventive Spirit
August 28, 2008 by office
Filed under Entrepreneurship, Innovation, Leadership
(29506)
Apple has earned a reputation for being one of the most creative and innovative companies in the world. It is therefore somewhat surprising to note that Apple has to formal system in place for generating new ideas and harnessing innovation.
Innovation at Apple is focused on shaping new and emerging technologies to the needs of customers rather than trying to force customers to try and adapt to new technology. In many ways, Steve Jobs tries to act as something of a “gravitational force” at Apple. That is, he looks at new technologies that are coming and tries to tie them together with a common theme–like setting up a digital hub that will allow all the devices within a home to communicate with each other and work together. Apple’s digital hub strategy is a guiding force that influences everything from the development of new products right through to the way Apple’s retail stores are laid out and presented.
Of course, not everything Jobs touches turns to gold. In 2000, Apple introduced the Power Mac G4 Cube. The company expected to sell 800,000 units the first year, but less than 100,000 machines were sold. Jobs suspended production of the Cube in July 2001, and Apple reported a quarterly loss of $247 million. Othe products have also failed to meet expectations, but Apple has a proven track record of taking technologies that are first introduced to the marketplace by other companies, making them more user-friendly and then turning them into commercial success stories. For example, Apple was the first company to build the Universal Serial Bus (USB) that was developed by Intel into its computers. Similarly, Apple popularized Lucent’s WiFi wireless networking technology as well as Xerox’s graphical user interface and mouse.
The development of the iPod–which has single-handedly transformed Apple from being a struggling PC company into an electronics powerhouse–is a good illustration of the way Apple brings together key ideas from unlikely sources to innovate. Even though the iMac was selling well in 2000, Apple had not included a CD burner in the machine and customers were starting to complain to complain loudly. Jobs asked why and realized more and more people were becoming interested in digital music. So to catch up, Apple licensed a music player called SoundJam from a small company. Jobs then convined this software company to retool SoundJam into iTunes for Apple’s use.
While that was happening, Jobs and his executive team looked at the digital music players then on the market and thought they were poorly designed. At around this same, Toshiba approached Apple with a tiny 1.8-inch hard drive that they had developed but didn’t know what to do with. Jobs made the connection between this tiny hard drive and the need in the marketplace for a better digital player and gave the goahead for a product development project to be funded.
An outside team of engineers and designers were hired to work on the iPod project. Since they had been set a deadline of only six months to get to market, they took as many off-the-shelf parts as possible: the hard drive from Toshiba, a battery from Sony, control chips from Texas Instruments, and then mixed in Apple’s own in-house expertise with power supplies, displays and so forth. The team had to work through all the issues that had bedeviled earlier products like inferior battery life and come up with better solutions. Over time, as the group made prototype after prototype, other ideas like the scroll wheel were grafted in.
The iPod was formally launched on October 23, 2001–about five weeks after 9/11. The first iPod looks very primitive now by comparison with he the later models that have been developed, but as of April 2007, more than 100 million iPods had been sold. The device alone accounted for just under half of Apple’s 2007 revenues. Even more impressively, Apple is on track to sell 300 million iPods by the end of 2009–with some analysts forecasting that the iPod could end up selling around 500 million units before the market is saturated.
We consciously think about making great products. We don’t think, ‘Let’s be innovative! Let’s take a class! Here are the five rules of innovation, let’s put them up all over the company!’ Trying to systemize innovation is like somebody who’s not cool trying to be cool. It’s painful to watch. The system is that there is no system. That doesn’t mean we don’t have process. Apple is a very disciplined company, and we have great processes. But that’s not what it’s about. Process makes you more efficient, but innovation comes from people meeting up in the hallways or calling each other at 10:30 at night with a new idea, or because they realized something that shoots holes in how we’ve been thinking about a problem. It’s ad hoc meetings of six people called by someone who thinks he has figured out the coolest new thing ever and who wants to know what others think of his idea.
–Steve Jobs
Creativity is just connecting things. When you ask creative people how they did something, they feel a little guilty because they didn’t really do it, they just saw something. It seemed obvious to them after a while. That’s because they were able to connect experiences they’ve had and synthesize new things. And the reason they were able to do that was that they’ve had more experiences or they have thought more about their experiences than other people. Unfortunately, that’s too rare a commodity. A lot of people in our industry haven’t had diverse experiences. So they don’t have enough dots to connect, and they and up with very linear solutions without a broad perspective on the problem. The broader one’s understanding of the human experience, the better design we will have.
–Steve Jobs
Passion
August 27, 2008 by office
Filed under Entrepreneurship, Innovation, Leadership
29505
To say Steve Jobs is passionate about what he does is an obvious understatement. More than anything, he aspires to “put a ding in the universe”–to do great things. In everything Jobs does, there is always an intense sense of mission.
Steve Jobs has always been on a personal mission to “make the world a better place.” This colors and influences anything and everything he does. He believes it’s perfectly OK to be very difficult to get on with as long as you’re passionate about what you’re attempting to do. Therefore, Jobs has no problems or qualms about yelling and shouting until he gets what he wants, even if others describe that as creating a “reality distortion field” around him. And oddly enough, most of Jobs’ collaborators like it that way. They appreciate his passion and find that this pushes them, in turn, to do great things themselves. Sure, eventually it might result in burnout, but in the meantime some pretty amazing stuff will come together on the sheer drive and determination Jobs adds to the equation.
Jobs is famous for recruiting former CEO John Sculley away from being the president of PepsiCo to run Apple with the question: “Do you want to sell sugar water for the rest of your life, or do you want to change the world?” Sculler simply couldn’t resist the philosophical challenge Jobs had thrown down. “If I didn’t accept, I’d have spent the rest of my life wondering if I’d made the wrong decision.”
One interesting dimension of Steve Jobs’s personal stock of passion is he also has the ability to instil similar passion in the team members he collaborates with. The original Mac development team–a ragtag bunch of ex-academics and technicians–typically worked ninety hours a week for months on end. They even got sweatshirts that were emblazoned with: “NINETY HOURS A WEEK AND LOVING IT.”
Due in part to this exceptional level of passion Jobs personally brings to the projects he works on, it isn’t at all unusual for the people he works with to go on a “hero-to-zero” roller coaster ride quite frequently. Jobs is very demanding, and expects high performance from the people who report to him. When people deliver, they attain hero status in his eyes. When people let him down, they are labeled as zeroes. Over the course of a project, the same people will go on this roller coaster ride several times. The people who this bugs typically don’t last, but those who enjoy this intense level of feedback find the ride exhilarating.
Apple’s stock price has risen 1,250 percent since Jobs took over as interim CEO in 1997. That means Apple’s employee stock options are incredible motivational tools. Most full-time employees at Apple have grants of stock options awarded when they join the company that vest after a year or so.
When it comes to motivating people, Steve Jobs is actually highly skilled at both dangling the carrot and using the stick–most often simultaneously. He can persuade people to go after seemingly impossible goals and push them to go beyond what they assumed their limits were. He’s also more than willing to cajole, rebuke and bully if this proves to be more effective than painting a vivid picture of the future promised rewards. Jobs can alternate between being highly charismatic and being extremely intimidating in the blink of an eye. The usual result, however, is that people end up producing work that is better than what they ever thought they were capable of generating.
There also have been times when Jobs has got has got this balancing act wrong and has stepped over the line to one degree or another.
People also talk frequently about the “reality distortion field” that surrounds Steve Jobs–sometimes described as “a ring of charisma so storong it bends reality for anyone under its influence.”
Regardless of whether Jobs is charming, intimidating or a mix of the two, almost everyone who works with him agrees that he has the ability to get more out of people than they themselves believe is possible. Jobs also tends to get credit for everything that goes right at Apple at the same time as he is blamed for absolutely everything that goes wrong. To most people, Steve Jobs is the heart and soul of Apple Computer, for better or for worse.
I’ve always been attracted to the more revolutionary changes. I don’t know why. Because they’re harder. They’re much more stressful emotionally. And you usually. And you usually go through a period where everybody tells you that you’ve completely failed. Unless you have a lot of passion about this, you’re not going to survive. You’re going to give up. So you’ve got to have an idea or a problem or a wrong that you want to right that you’re passionate about; otherwise you’re not going to have the perseverance to stick it through.
–Steve Jobs
At Apple we gave all our employees stock options very early on. We were among the first in Silicon Valley to do that. And when I returned, I took away most of the cash bonuses and replaced them with options. No cars, no planes, no bonuses. Basically, everyone gets a salary and stock. It’s a very egalitarian way to run a company that Hewlett Packard pioneered and that Apple, I would like to think, helped establish.
–Steve Jobs