1. David Locke on October 23, 2004 2:34 AM writes...

There was a paper I read a few months ago about customer intimacy vs. customer heterogenity. The former fosters success with continous innovation. The latter radical innovation.

Software companies start with a technology, but without clients, or customers. The evolution of the desktop publishing market showed that initial programmer were not typographers. Typography and design came later once the real customers showed up after the technical enthusiasts moved on to the next new-new thing. Feature bloat likewise demonstrates what happens when the technical enthusiasts are directing the requirements.

Product managers show up after version 1.0. Customers start getting heard sometime after that. You might also notice that innovation moves from radical to continuous with the advent of the product managers.

If we want to change this, we need to start with independent product managers that have a collection of widely distributed, heterogeneous customers. These product managers would in turn establish a market for the requirement orginating from this network.

Typically, marketing is going to bias the customer base away from the heterogeneous. The product managers are chosen internally, because they know the company's customer base. Somewhere, I read that a product manager that isn't connected to this customer base has no chance of getting hired. Does this imply that the company has no chance to find a radical innovation after the advent of the product manager? Is the arrival of the product manager the end of radical innovation?

David Locke

2. Naina Redhu on October 23, 2004 10:53 AM writes...

I would say that there are external factors as well as internal (organizational factors) that drive innovation. The external factors would further comprise:

1. Regulations - Eg: where a policy decision either encourages or forces organizations to embrace innovation
2. The Market - Eg: a new demand is identified and the organization can now develop a new product or service to fulfil that demand
3. Competitors - Eg: a competitor launches a new product or service and spends more on innovation initiatives
4. Global Changes - Eg: cheaper resources / outsourcing allow the organization to divert more resources to innovation efforts

Naina Redhu
InnovationNetwork, Asia

3. Ben Simonton on October 25, 2004 7:01 PM writes...

Innovation drivers will always exist, but whether or not they will be noticed and acted upon mostly depends on the extent to which company leadership causes employees to use their brain at work. The brain controls creativity, innovation, productivity, motivation and commitment. I will attempt to explain a superior leadership strategy which turns on brains to the maximum extent and thus greatly enhances innovation.

A superior leadership strategy inspires people to do more, dream more and learn more. We all know that people are our most important asset and that the best ones are self-motivated self-starters. Unfortunately, only 5% or so are naturally that way. A superior leadership strategy is capable of making the vast majority of employees self-motivated self-starters who are highly committed and highly productive, up to 300% more so than if poorly motivated. So what is this strategy?

Values are the centerpiece of this strategy because employees respect actions which reflect high standards of all the good values, values like industry, fairness, forthrightness, compassion, honesty, etc, while they disrespect actions reflecting low or negative standards. Actions (thru the boss' support functions such as training, discipline, tools, direction, information, technical advice, etc) reflecting high standards strongly influence employees toward emulating those standards, but the same emulation occurs for actions reflecting low standards. This is called following. Fortunately, self-motivated self-starters don't follow and thus their performance does not go up and down because of following the latest leadership. For this reason, the strategy is designed to create these “non-followers”.

Listening is the most important leadership skill of this strategy because people cannot be motivated or committed to something if they can't "put in their own two cents", when they want and how they want, or if they can't understand and be in on the decision process for things which affect them. Of such things is TRUST built.

So what should bosses do?? It starts with providing employees regular opportunities, one-on-one and in groups, to express their complaints, suggestions and questions. These must be answered fully and in a timely fashion, no hipshooting please. All of the boss' actions in so doing, including any fix, must meet the highest standards of common values like honesty, respect, fairness, forthrightness, industriousness, admission of error, knowledge, quality, and the like. As the boss corrects the complaints (people generally only complain about things which reflect standards lower than their own), the boss' leadership improves and as followers use these higher standards work performance improves. Turning low standards into high standards constitutes superior leadership.

These actions will have many effects on employees. As their complaints are respectfully addressed, they will begin to believe that their bosses care about them. They will start to believe that they are valued team members. They will learn how to fix things using the highest standards for all values. They will learn how best to treat their customers, each other and their work. They will start to use their own brain to solve workplace problems, to innovate and to work more effectively. Productivity will rise and keep rising. Creativity, motivation and commitment will do likewise, but only so long as their complaints, suggestions and questions continue to be addressed regularly, respectfully and completely. Why even make a complaint or a suggestion if no action will be taken? Why not just "leave your brain at the door"?

There is more to a superior leadership strategy (including how specifically to create self-motivated self-starters) because there are many other ways in which employees react to leadership messages in the workplace. Each of these ways must be taken into consideration in effecting a superior leadership strategy. You can discover all of this on your own if you take the time to analyze how you react to bosses and carefully listen to your employees. Once you understand these reactions, designing the leadership strategy is straightforward.

Ben Simonton
Simonton Associates
Leadership Skills eBook "How to Unleash the Power of People"
http://www.bensimonton.com

4. Amy Pearl on October 26, 2004 12:37 PM writes...

I recently left a major chip manufacturer company as a direct result of an incredible lack of what is outlined above. This company is known for being an innovative company, but what I learned was it is only nurtured in certain groups, and only where "approved". There are no company values or management courses in "how to recognize and promote innovation". My experience surprised me, because I learned that innovations encounter huge resistance when they run against what has been defined as "standard practice" or they fall outside those groups charged with "being innovative". While it is clear that standards need to be in place, there is a new need to create internal strategies that enable innovations (especially with proven track records) to be recognized and examined for the value they might bring to the larger organization.

I would be interested in learning what new procedures, policies, or practices companies are adopting or developing to literally identify and recognize, and subsequently analyze, true innovations. What do companies do, in concrete terms, that raise up a new practice or strategy and allow it to flourish, as well as be explored? I have enjoyed reviewing Deloitteinnovation.com as a company that seems to have figured out ways to support its growth... Any others?

5. Joyce Wycoff on October 27, 2004 10:13 AM writes...

In my experience, there are four major drivers of innovation ...

1. Challenge -- people are energized by a significant, meaningful challenge. This generally has to be more than growing by 13.4% or achieving an ROI of 23.2% Think Apollo 13 when in order to save the lives of the astronauts, the people on the ground literally fit a square peg into a round hole.

2. Customer focus -- innovation is about creating value and people actually like to make things and provide services that customers value. The argument about disruptive innovation is valuable ... unless it starts to devalue the importance of creating value for *someone* whether that someone is current or potential customers.

3. Communication -- information and conversation is the river of new information we swim in and hopefully make new connections and see new possibilities. Simply opening up communication channels and making information more available is a significant driver.

4. Collaboration -- when people get together and start sharing ideas, experiences, problems and challenges in a collaborative setting, new possibilities arise naturally. If the environment (Culture) supports new possibilities, innovations can emerge.

These four drivers are part of the InnovationDNA (available at http://thinksmart.com). The other important elements are: Culture (the playing field), Creativity (the spark), Completion (the muscle to get it done) and Contemplation (the shared learning that provides a ladder to new innovation).

The Last "C" of this framework is "Context" -- the world we live in that affects everything and often drives us in new directions.

6. Joyce Wycoff on October 27, 2004 12:59 PM writes...

In a nutshell:

PEOPLE drive innovation. period. All other factors may *influence* innovation.

7. Renee Hopkins Callahan on October 27, 2004 1:42 PM writes...

So many great comments....thanks so much! Because there are so many, I've commented on all except Joyce's in a post that's here: http://www.corante.com/ideaflow/archives/2004/10/26/more_on_innovation_drivers.php

Joyce's point is quite well-taken. I'm going to write my response and post it, and when I do I'll note that here as well.

8. David Locke on October 28, 2004 3:44 PM writes...

When power defines leadership, then power defines innovation as well. Is this a bad thing? I'm not sure.

In Geoffrey Moore's "Living on the Fault Line," Moore says that a company needs to focus on what is in-offer and strategic. Differentiation, read innovation, outside the offer offers no return to the company and consumes managerial focus. The company is supposed to keep the in-offer, strategic rcomponents and outsource the rest, not because of cost, but because it will increase quality across the value chain. This paradigm would restrict innovation to the few, not that innovation outside the few couldn't happen. It would just require that you spin out.

In "Innovation Nets," spinnng out innovations turns out to be a good thing, because it can't be harvested by a late mainstream to phoebic market facing company, which most post-IPO companies happen to be. A company that is managing itself for operational excellence cannot create a market for a radical innovation. The skill sets, organizational structure, cost structure, goals, and metrics are all wrong. The allocation or derivation of power is all wrong as well.

I generally don't accept the powerful leader when I'm working in a software startup, or elsewhere for that matter. I can't remember a single one either, because we didn't have them. As an owner, it was your baby and you managed your part. You didn't take it upstairs. You settled it right there in each other's offices.

Where we did have an official leader, aka the CEO, he was bascially riding a bucking horse. He got his big bonus for laying us off. But, he laid us off, because the engineers missed characterization targets and subsequently market windows. So much for being in charge. The innovators drove revenues. The management certainly did not.

9. David Locke on October 28, 2004 3:52 PM writes...

The notion that regulation drives innovation is right there in our tax code. The recent tax cuts were explained as a way to make more money available for innovating higher value products and services.

But, when you look at the effect of forcing software companies to pay dividends, which require a revenue focus, rather than produce growth, which requires retained earnings, you are seeing the tax code end wealth creation. This is retribution for the boom, for which none of us were responsible, nor did we participate. Old money vs. the New Economy is real.

We'll go on innovating, we can't help it. I do it in the absence of managerial support, or even a paycheck. But, wealth creation driven by innovation will be moving out of the software industry for the forseeable future. Regulation is never neutral.