by Craig Bromberg
"Anyone who thinks innovation is about creativity is in for a rude shock," warns Matt Kingdon, CEO of ?WhatIf! He’s right—and his fellow innovators Tim Westergren of Pandora, Shimano’s Dave Lawrence, Mozilla’s Chris Beard, and IDEO/d.school strategist Diego Rodriguez all agree. As the economic historian Joseph Schumpeter once said, true innovation is an act of “creative destruction”: hard, painful work that often requires jettisoning everything we’ve ever learned. Whether it’s diving for insights, cultivating empathy, sharing your most closely held competitive secrets, or cutting costs to drive greater customer value, strategy has come a long way since the days of mano a mano competition. Listen in as we capture the insights of a new breed of corporate strategists diving into the blue oceans of innovation.

Diego Rodriguez

// What’s wrong with strategy? On the one hand nothing. Every company should have one, and it should be written down. On the other hand, there are lots of industries that are stuck because strategy is a top down intellectual discipline without regard for what people want. Traditional strategy tends to ask how we can make more money off the people we already sell to, to look at people as consumers, and markets as abstract numbers of consumers. But it’s much more fruitful to think of markets as being composed of individuals who deliver, service, manufacture, market, buy, and use your product. Ultimately, they are the embodiment of your strategy—this set of interactions across people and players. So the focus of innovation is understanding what all these people need to do to deliver that experience. How do we make that happen? How do we align them?

// The fundamental element of innovation is empathy. When faced with a challenge statement, what do you do first? What we teach at the d.school is to go out into the world and see what’s going on. Having empathy for other people’s thoughts and emotions is key. Henry Ford didn’t dream up the Model T sitting in a board room. He did it by building different types of cars and failing a lot before he hit that iconic formula.

// How do you see a need that’s not being met? You can’t do a market survey. You can’t study what a competitor is doing, because by definition that’s not an uncontested market. So you have to get out into the world, talk with people, look for latent needs. Most likely what you will come up with won’t be quite right. You’ll want to show them a model and tell them the story of what you’re doing—get some feedback about what the right value proposition is for you. There’s nothing like giving someone a physical prototype and saying, call us back in a couple of weeks after you’ve played with it.

// Having empathy for other people’s thoughts and emotions is key. We’re not teaching Six Sigma, which is about getting rid of defects and stamping out imperfections. We’re interested in variance. Good things happen when you go through a lot of iterations. Picasso was a great painter but it wasn’t only because of his innate talent. He also painted a lot more than his contemporaries. If you took a Gaussian distribution of his work, some would be awful, some brilliant, and a lot in the middle would just be OK. Of course, because it was Picasso, they were probably pretty good. The lesson is to take that empathy and get to work: create prototypes and test them. Don’t wait a year to launch a product, do a smaller launch in a smaller market and do it in a few months. Go for it—that’s what we’re teaching.

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d.school prof and IDEO business factors lead // Diego Rodriguez is a busy man. At Stanford University’s brand new Hasso Plattner Institute of Design (aka the d.school)—a non-degree academic institution created to bring together the best of business and design talent—Rodriguez is famous for his class “Creating Infectious Action, Kindling Gregarious Behavior (CIA-KGB.)” At IDEO, the world’s top design consultancy, Rodriguez is the company’s business factors lead, the strategic innovator companies such as HP, Amtrak, and Juniper Bank turn to when they reach critical decision points in their work on innovation. And like many of us, Rodriguez also lives online where he hosts a popular blog (metacool.typepad.com) on the latest twists and turns of innovation strategy.


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