Monthly Archives: June 2007

“Events”

Posted on by
Reply

Another snippet from my forthcoming book…

The British Prime Minister Harold Macmillan once observed that his biggest problem was “events”. Predicting anything is a recipe for failure and frustration but politics is almost impossible due to such events. Indeed, the only thing that you can say with any degree of certainly about politics is that if you take a long enough timeframe almost anything is possible. Predictions about the end of history now seem as ridiculous as Thomas Jefferson saying that “History, by apprising (people) of the past, will enable them to judge the future: it will avail them of experience of other times and nations”. But if this were true then why did United Nations officials decide to cover up a copy of Picasso’s Guernica, which hung outside the entrance to the UN Security Council, on the very day that Colin Powell addressed the UN about the case for war in Iraq? We are, it seems, destined to repeat past mistakes.

Future Files

Posted on by
5

Did you know that I’m writing a book? It’s called Future Files and it’s out on September 3rd. If you can’t wait – or can’t get hold of it – I’ll be dripping a few bits and bobs into my blog from time to time. Here’s a few of the opening lines…

Early in 2006 a middle-aged woman called Joyce Vincent was discovered in her flat in London. She was dead. Nothing remarkable about that, except for the fact that she had been dead for more than two years and her television was still on. How could this happen? Where was everyone? The answer, of course, was that everyone was somewhere else. London, like most major cities, no longer has neighbourhoods; it has collections of individuals leading increasingly isolated, selfish and narcissistic lives. Neighbours keep to themselves and people don’t ask questions or volunteer information. In an age where everyone is increasingly connected to everyone else through the Internet nobody really knows anyone anymore.We have lots of friends but few of them dig deep to understand our hopes and fears. The general feeling is that you’ll live longer if you keep yourself to yourself.

Open Innovation and Other Foolish Ideas

Posted on by
Reply

Here’s something I wrote for Fast Company magazine last week.

Open source or distributed innovation is all the rage at the moment, but the hype glosses over one important fact — most open source projects are total failures. But this fact is precisely why the open source innovation movement is so important.

Within traditional innovation models, the cost of failure is very high. As a result, stage gates, red lights, and funnels are introduced to control the number of new ideas that are developed and introduced in to the market. And that’s the problem.

Nobody can ever know for sure what will work and what won’t, until an individual makes a leap of faith and a surge of innovation is unleashed. Moreover, nobody can tell what’s silly and what isn’t without the benefit of hindsight. But with open innovation, researching and worrying about whether something will work or not is unnecessary because of the low cost of trying. Just do it and you’ll find out.

My own experience of open innovation within large organizations is relatively modest. The reason for this is that the idea is too new and unproven. Organizations like the sound of it in theory, but in practice relinquishing control to scores of unknown individuals scares the pants off them. Business, after all, is about order and control.  But if they’re right then why do only 40% of major technical innovations come from large corporations?

Anyway, I’ve been playing with the idea myself of late. My first experiment was a little online trends newsletter called What’s Next. This isn’t openly created, because I create all the content myself, but I do receive a tremendous amount of user feedback so the business model is openly filtered. As a result the idea has been revamped several times, and while the current version isn’t perfect, it’s one hundred times better than when it started.

The key learning here is that the innovation process has been inverted. Previously, I would have worked up a handful of promising ideas and put them into focus groups to establish which concept was ‘right.’ I would have then polished up the winning concept and put it on the market. In other words, I would have created something, edited it, and then ‘published’ it.  But these days you can also do it the other way around. You can create, then publish, and then let your customers edit the concept for you, especially if your product is digital or if it’s a service innovation.

My latest collaborative experiment in home-brewed innovation is something called Homepage Daily, which is an online newspaper.  Will this work? I have no idea but the users will undoubtedly let me know. The point here (and most large organizations outside of the US at least really don’t get this) is that there is no lasting humiliation in giving it a go. You can fail like crazy and still keep going until you eventually stumble on success. Of course this presents big organizations with something of a problem. How can they fail like crazy without looking like idiots? The answer, in open innovation terms, is to facilitate and empower every employee, customer and stakeholder to become part of the innovation team and to then encourage them to perform small experiments.

For example, Mozilla Corp is the company behind Firefox, the wildly successful Internet browser. The company has 70 employees and almost 200,000 volunteer helpers. Moreover, Firefox 1.0 was developed, not on purpose, but by two renegade young programmers that went off in the wrong direction just because it felt right.

The idea of open or distributed innovation obviously links with other ideas like the wisdom of crowds, but the link I like the most is with James G. March’s idea of foolishness in organizations. March is a professor emeritus at Stanford Business School and one of his key insights is that companies need to mess around more.

What I think he means by this is that people should try more things out even if rationally they seem like silly ideas. For example, people should incorporate more ideas from outside their domain, or even make mistakes on purpose just to see where this takes them.  It’s a bit like going on holiday. You can follow the guidebooks but often the most interesting and useful experiences come when you put the guidebook down and walk down an unknown street for no particular reason.

Of course, the idea of setting up an innovation process focused on making deliberate mistakes is itself a silly idea. At the moment, most organizational innovation strategies and processes are too sequential and too rigid. But moving to some kind of ‘anything goes’ system would be equally disastrous.

What’s needed is a balance — a combination of tight and loose, where 85-90% of internal resources are spent on internal innovation that is tightly planned and controlled. The remaining 10-15% of time and money should then be spent on unplanned ideas that are developed by simply releasing them into the wild and seeing what happens.

They’re all selling it but I’m not buying it

Posted on by
Reply
Here’s something I just wrote for Retail Banking Review.
Have you heard of Second Life? Of course you have. Have you been there more than once? Of course you haven’t. In case you haven’t noticed there is a gold-rush going on right now whereby old-fashioned standoffish brands are charging into social networking spaces dressed in their best casual clothes because it’s the place to be seen right now isn’t it? Well no, not necessarily. There are undoubtedly a lot of over-caffeinated young marketers and media types that believe that online communities will change everything but I’m not one of them (decaf with a strong shot of the old). In my view the world is undoubtedly changing but not quite as fast or as dramatically as some people would like to make us believe.
From my perspective Second Life is about as tedious as reading a blog*or downloading a Podcast, although I can see why people would flock to all of these things. They are novel and occasionally even interesting. However, these are things that people should be getting involved with not brands and certainly not banks.

I read recently that an American bank had produced a series of Podcasts about its range of loan products. Well gosh why didn’t I think of that. Well I’ll tell you why. Because it’s a stupid idea. About as stupid in fact as opening a virtual bank inside Second Life or setting up a social network for your small business customers. Podcasts are a red herring for the same reason that the VCR didn’t turn TV viewing upside down or that the Internet won’t kill Hollywood or broadcast television. People are busy and want things that make life easier not more complicated. Digital radio will be huge in the future but I’m not convinced about the convenience of plugging an iPod into a computer, finding something, downloading it and then listening to it later. And certainly not when the Podcast is about a bank loan.

It’s the same with social networks. They are a great invention but I don’t want my bank to be running one thank you very much (and believe me they are). Of course the bank will say that it’s all a big success and thousands of small businesses are using the network to do business with each other but I don’t believe a word of it. Sure everyman and his dog with be on the network trying to sell something but is anyone really at the other end trying to buy?

It’s the same with blogs. There are millions of them out there (sixty million the last time I looked) but 99% are written but never read. But wait. My bank is also introducing an instant messaging service whereby I can chat with my business-banking manager. Holly smoke, my life is finally complete. That’s exactly what I want. I thought computerised call answering and Indian call centres were great but this is even better. Where do I sign?

It’s a similar story with the ‘Wisdom of Crowds’ notion. Again, I’m not for a moment suggesting that the Wisdom of Crowds is a bad thing. Just that it has its place and that place is probably media where collectively written and filtrated information can have great value. Just ask Wikipedia. But no, I don’t want 20,000 bank customers designing my mortgage brochure thank you. That’s called design by a very large committee and whilst the end result will of course by acceptable to a lot of people it won’t be very good.

If crowd sourcing or the wisdom of crowds is just a clever way to run a customer or employee suggestion scheme then that’s well and good. But please don’t tell me that five thousand people that have nothing better to do with their time and computing power can design a retailing banking branch. They can’t.

One fairly new website that caught my eye last month is something called Crowd Spirit – crowdspirit.org. This is a site that is intending to use crowd-sourcing principles to develop new products, which could presumably include new banking products. The concept is that inventors post their idea and the ‘crowd’ or community comments thereby improving on it. So we solve the inherent problems of focus groups by making the group much larger? That’s the most stupid idea I’ve heard of since someone came up with a business plan for an online donut delivery service – sweet on the surface but full of nothing in the middle. For one thing who exactly owns the co-created ideas? At the moment the website allegedly has no plans to pay anyone for their ideas. Maybe we should ask 10,000 people whether this is a good idea.

* Except this one, of course.