Archive for December, 2010

Dec
17

Children Present: Innovators Beware

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One of the most challenging areas for innovators, entrepreneurs, and businesses of any kind now is field of children’s products. Innovation fatigue has reached new heights in this area due to “external innovation fatigue”–the kind that comes when outside forces from government and others, often with the best of innovations, deliver hard-to-evade punches to the body of entrepreneurs, including some very low blows.

The problem is especially severe when the governmental forces that can shut down a business or change the playing field unexpectedly arise not from legislators accountable to the voters, but from lone appointed individuals who may not be directly accountable to anybody.

The Consumer Product Safety Improvement Act (CPSIA) in 2008 dealt with, among other things, the problem of lead that had affected some books imported from China. Rather than address the specific issue of Chinese imports, the law sought a broad “fix” by banning lead in children’s products in general. Who could oppose that? But what it means in practice is that millions of toys and children’s books were unnecessarily discarded–wasted–by small businesses around the country because they could not afford to have lead testing done for the products in their inventory. For used products, there weren’t technically required to do testing, but they still had to comply with the law forbidding them from selling products with lead above a certain threshold. In practice, it was test or toss. I know of local entrepreneurs in Wisconsin who had to discard a lot of products.

For inventors and entrepreneurs, the added cost of certifying that your product is lead free can be one more tax that stands between success and failure, even when you have diligently avoided working with companies where lead could possibly be a problem.

At least the lead ban had its roots in law from Congress. The most recent ban affecting children’s products comes from one unelected leaders of an agency who has made tough new regulations on children’s cribs a top priority. In the past decade, 32 children died from defective children’s cribs with drop-down sides. Now drop-down sides will be banned in 2011, making it illegal to make, sell, or distribute them. (See “Baby Asleep in a Drop-Side Crib? Soon They’ll Be Banned” at Time.com.) Any death is regrettable, but 32 deaths from tens of millions of users is remarkably small. Chances are the deaths are not evenly distributed among companies, yet a blanket ban on a product punishes all, including those who had a flawless safety record and had delivered innovations that made their beds more reliable and safer than the competition. Now they are out of luck, as are the millions of parents (myself included) who have found safe and sturdy drop-down beds to be a big help in safely taking care of children and grand-children.

30 deaths across a decade: all tragic, but consider those numbers in light of the risk we face every time we take a step, turn a corner, plug in a product, or take a bite of food. Far more children die each year from salmonella–do we ban chicken and meats? There are about 30,000 deaths a year in the US for accidental poisoning and about 40,000 automobile deaths a year, with thousands of children in both categories. 3.5 million children aged 14 years and under suffer medically treated sports injuries each year, with many more deaths than cribs could ever cause. Do we ban sports? About 50,000 people a year go to the hospital because of skateboards, with many more deaths than cribs. Among useful but dangerous products, consider lawnmowers, where over 150 people die each year (that’s 5 decades worth of deaths from cribs at our current rate). Time for a ban?

There are hidden costs and even injuries for safety measures that are too strict. Alternative products and alternative behaviors have their own set of consequences. Will parents now be tempted to let kids sleep on beds or without the enclosed protection of cribs because the new generation of cribs are too expensive or too inconvenient? Is there any guarantee that children nationwide will be safer because of the ban?

I love kids and want them safe, but am most comfortable when informed parents take responsibility for that. When one person in an unelected position can make broad new rules that wipe out products that millions of people have found to be safe and effective, this changing of the rules midstream is a terrible disincentive for innovation in children’s products and innovation in general. Why bother with making the safest, most innovative drop-down crib when you’re going to be lumped with inferior products and stuck with a blanket ban that wipes our your business? It’s easy to do in the name of the children, but there are a lot of more pressing problems that children face, and better ways to deal with them than having one regulator issue laws without direct accountability to the people. Chalk one up for innovation fatigue.

Anytime is a tough time to be an innovator, but it’s especially tough when government gets overly involved in helping without considering the unintended consequences of the help, or the opportunity cost from helping in areas where help isn’t really needed. The quest to protect children is one area where the temptation to be overzealous can be especially strong. Who could be against protecting children?

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Stoking Your Innovation Bonfire by Braden Kelley (John Wiley & Sons, 2010) is a highly readable, positive book about the practical side of innovation. Braden Kelley writes with the benefit of not only having many years of experience in supporting innovation, but with the insights that come from one of the best innovation networks on the planet. Braden’s Blogging Innovation effort has brought together numerous innovation thinkers around the world to share and contribute their insights on innovation success. Braden has many minds he can tap and the collective wisdom of many stars to guide his thinking.

Braden’s experience in innovation shows, for example, when he discusses the different innovation needs companies have depending on their innovation maturity level. Trying to run an open innovation program for a company just getting started on innovation could be a mistake–especially if internal systems for gathering and evaluating innovation concepts aren’t yet in place.

He also recognizes the need for long-term innovation strategy, not just short-term reactive strategy, to help a company survive in a world of disruptive innovation threats. Yet a focus only on long-term innovation bets could leave a company crippled by missing the short-term gains that are needed to still be thriving when the long-term bets pay off (if ever).

A strength of the book is the citation of numerous examples, mostly from large, well-known companies like Apple or Amazon. One of my favorite case studies occurs early in the book (pp. 14-16) and deals with the rise of General Motors and how they overtook Ford through the vision of Alfred Sloan, who saw the need for market segmentation, good design, and innovation in the business model by offering financial assistance to dealers and customers through GMAC.

Kelley provides practical guidance on some of the basic of innovation within a corporation. He offers, for example, an idea evaluation checklist (pp. 69-70) to assist in screening ideas from a brainstorming session. He also gives the very important lesson that innovation often must proceed slowly, and that a company must be prepared to pursue “slow innovation.” Companies must evaluate where they are on the innovation curve and determine when they must be prepared for many years of slow progress before a technology will be ready for commercial success. Such discipline in thinking and planning is essential to avoid rapid disappointment and premature abandonment of potentially successful concepts. Apple’s iPod is one of several case studies of slow innovation considered.

Kelley also addresses the major issues of organization, culture, and processes that are crucial for innovation success. Breaking down internal information and innovation barriers can be essential for improving innovation in a modern company. Creating a system that can manage innovation and maintain the flexibility needed for innovation success is a demanding challenge, but one that leaders need to face and embrace. Stoking Your Innovation Bonfire can help with that challenge. For both leaders and champions of innovation at all levels, Braden Kelley’s book is definitely worth the read.

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“Quorum sensing” refers to the abilities of some organisms, especially bacteria, to sense the presence of others and begin collective action such as forming a biofilm. It’s a critical area of research in immunology. There are also lessons from quorum sensing that need to be applied to business and innovation. Quorum sensing, in a sense, results in “intelligent” collective decisions that are not made by a central brain but through the sharing of signals or other information between individuals, none of whom sees the big picture or understands the meaning of all the available data. The free market’s mechanisms for optimizing supply and demand through the collective information transmitted by price is one analogy in the business world. But let’s look at lessons specifically from the quorum sensing of one ant species that lives its life in a hostile, frequently shifting, rocky environment–sound familiar?–where constant change is required. This comes from Wikipedia’s article on Quorum Sensing:

Colonies of the ant Temnothorax albipennis nest in small crevices between rocks. When the rocks shift and the nest is broken open, these ants must quickly choose a new nest to move into. During the first phase of the decision-making process, a small portion of the workers leave the destroyed nest and search for new crevices. When one of these scout ants finds a potential nest, she assesses the quality of the crevice based on a variety of factors including the size of the interior, the number of openings (based on light level), and the presence or absence of dead ants. The worker then returns to the destroyed nest, where it will wait for a short period before recruiting other workers to follow her to the nest she found using a process called tandem running. The waiting period is inversely related to the quality of the site; for instance, a worker that has found a poor site will wait longer than a worker that encountered a good site. As the new recruits visit the potential nest site and make their own assessment of its quality, the number of ants visiting the crevice increases. During this stage ants may be visiting many different potential nests. However, because of the differences in the waiting period the number of ants in the best nest will tend to increase at the greatest rate. Eventually, the ants in this nest will sense that the rate at which they encounter other ants has exceeded a particular threshold, indicating that the quorum number has been reached. Once the ants sense a quorum, they return to the destroyed nest and begin rapidly carrying the brood, queen, and fellow workers to the new nest. Scouts that are still tandem-running to other potential sites are also recruited to the new nest and the entire colony moves. Thus although no single worker may have visited and compared all of the available options, quorum sensing enables the colony as a whole to quickly make good decisions about where to move.

The standard Corporate model of centralized new product development and decision making has its advantages, but also many limitations. When rapid growth or adaptation is necessary, innovation often works best when many minds can contribute their talents, insights, networks, and scouting activities to the search for fruitful new places to colonize. If decisions are fully centralized, they take forever and many good spots will be ignored. More rapid and efficient pursuit of innovation requires distributed authority and the involvement of many and systems that can tap and respond to the efforts of many without the endless waiting for one all-knowing top dog to sift through the data and make a decision. How flexible is your organization, really? How distributed and dilute is the power to act on innovation opportunities? What systems do you have to tap the knowledge, skills, and networks of all employees?

Horn of Innovation Schematic

Horn of Innovation Schematic

One of the major concepts we discuss in Conquering Innovation Fatigue is the Horn of Innovation, a concept that turns the slow, inefficient innovation funnel around and yields a more efficient innovation system in which innovators, like the quorum sensing ants, are directly involved in all aspects of the innovation process. In our musical analogy, the innovators are able to shape and adapt the innovation in response to the feedback from the market and business leaders for rapid and efficient adaptation, rather than just tossing ideas into the black hole of a funnel and hoping somebody will do something with them occasionally. Innovators need to be included in healthy, robust feedback loops that are closer to the quorum sensing mechanisms than purely centralized, autocratic business systems. I’m willing to bet that it’s time your organization shelves its old, costly systems and implements improved paradigms for innovation. The lives and ants and the physics of horns can both teach us lessons about better ways to run innovation in a business.

The Horn of Innovation vs. the Funnel

The Horn of Innovation vs. the Funnel

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InnovationFatigue.com is the official blog for the new book, Conquering Innovation Fatigue. Here we provide supplementary innovation, news, tips, updates, and, when needed, a correction or two, to keep those who are using the big on the inside edge for innovation success.