2 - 1 - L1-Part 1- The Context of Innovation.txt

7/29/2019 2 - 1 - L1-Part 1- The Context of Innovation.txt

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[music] Welcome to the first lecture ofthe Strategic Innovation Class, I wantedto be sure that you check out the, thelog, the logistics lecture, the logisticsvideo that I did where I talked about thesyllabus, I talked about the deliverables,I talked about the expectations.All those things that I'm expecting fromyou as a participant in this course.Keep in mind, there's tens of thousands ofpeople signed up for this course and ifwe're going to get through this togetherintact, we really need to be sure that theexpectations are clear and what it is thatI ask for you and what it is that youasking for me and how it is that we caninteract together.So, be sure to check out that video.In that video, I will go through thesyllabus step-by-step.You can watch this one first, or watchthat one first, either way, but certainlybe sure to check it out.

So, let's get started.One thing I want to men, make certain tomake clear for, for us all, is thatthere's this, there's a difference betweeninnovation, and this thing called change.Innovation is what this class is about,it's what we're after.But, of course, innovation requires somekind of change, because you can't innovateby staying the same.And so, one thing I want to, sort of, makeclear and also to reinforce again andagain and again in this course is that

innovation is a positive thing.Innovation is something that, you know,when have this idea about how the world isa better place, we want that kind ofinnovation.We're going to call innovation, we'regoing to seek it as a positive thing.On the other hand, when other people haveideas that we don't completely agree with,they're going to, we're going to call itchange.And so, when it's innovation, we like it,we seek it.

And when it's changed, we're sort of, wesort of step back and, and, and push backon it.I mean, think about this, as innovation iswhat we do to them, and change is whatthey do to us.And so, in this dynamic, we need tounderstand that there's no obligationthat, that people have, because alreadygood ideas.


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Let me say that differently.If I have a great idea about how you needto change, you have no obligation toaccept that idea.It's up to me to convince you of thatchange.It's up to me to convince you that thechange is, in fact, an innovation and thatyou're going to benefit from it.And so, as we go through all the things wedo, if you never learn nothing else,that's the most important thing, that the,the innovation is about selling our ideas.It's about getting other people to agreeat this way of looking at the world, thisway of, of behaving in the world, this wayof these things that we're going to offerfor you in the world, are better.And so, this is what I want to do for you,is offer you a way of thinking aboutinnovation that I think is a better way ofinnovation.Hopefully, it's not change to you, buthopefully it's innovation in your

thinking.Let's take a look at this term, thinkingoutside the box.Certainly in your language, if you're nota native English speaker, thinking outsideof the box, there's a term for that, youknow, sort of like there's this box andyou have to think outside of it.I've worked with many, many companies.One of the stories I'll be telling, oroutline in the book, Creative People MustBe Stopped, and you can see the book; I'llactually fill a picture of it here.

Check out the book.But basically to say, to, to, to pull asynopsis of many of the stories peoplehave told me in the organizations I'veworked with and the people I've, I'vespent time with, it goes something likethis.So, take a look at this video and thencome back and see what you think.[music] It's Friday afternoon at 4:30 andyour boss calls you into his office hesays, look, I need your help and I need itnow.

We need some big ideas around here.Some stupendously big ideas.We want to make this company great onceagain.I'm talking breakthrough.You know, Big Bang, blue sky.Now, I know I don't say this often, but Ireally need you to think outside the box.Wow, you've never heard him talk like thisbefore and so you start to get excited.


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Then, you actually start thinking big.You do a ton of research, you brainstorm,you lose sleep.And you stretch your brain, and finallyyou do it, you find it, you come up with agreat idea.So, first thing Monday morning, you go topresent your idea for launching thiscompany ahead.You're going to knock his socks off.Our world is going to be a better place.You show him your idea, and after somesilence, the boss says, hm, this looksexpensive.You know, I appreciate how you're tryingto push the boundaries.But, look, this is a business.We've gotta make some money, not spend it.Now, I want you to still think outside thebox.But I want you to come up with somethingthat's not quite so expensive.So, off you go to generate another idea.This time, you come up with a less

expensive idea that's even better than thefirst one.You show it to the boss and he says, hm,this looks complicated.Now, you realize, of course, that we'vegot to make this in our plan.I mean, I want you to keep thinkingoutside the box, but could you try to makesure that at least, we can make the thingin our current facilities.You bring them another idea.Too disruptive.And another idea.

Oh, my gosh, that's too risky.And yet another idea.What on Earth?That's just weird.Well, after a couple of months of thisfrustrating dance and you finally see it.You find it.The absolutely perfect idea.The one idea that you know will meet everylast one of the requirements that wereset.So, you start your presentation, and itseems to be going well.

This time, he doesn't ask any questions,though.And after a few minutes, he starts gettingagitated and shouts, this is puny.I mean, I asked you to think outside thebox and you bring me this puny idea?What's wrong with you?Don't you know how to be creative?Normally, people at work can be prettyblaise, and I would dare-say lazy.


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But when you bring them innovation, theysuddenly kick into high gear and theystart working overtime, undermining,blocking, maiming, debilitating,torpedoing, subverting, ignoring, andjust-plain killing your innocent,well-intentioned, and sometimes even aregreat ideas.Why do they act like creative people mustbe stopped?If this story sounds familiar to you,you're not alone.I've heard this story of frustration againand again and again, from people at everykind of organization, in every kind ofindustry, and all around the globe.[music] Of course, it's not always theboss, who plays the role of leadknucklehead in torpedoing innovation inyour organization.Sometimes, your customers.Your clients.Or your partners.Maybe it's your suppliers, your

colleagues, or even your team.Sometimes, it's even you who pulls thetrigger and stops innovation dead.[music] What if you could predict who wasgoing to trample your creativity, and howthey were going to do it?What if you could figure out beforehandhow innovative ideas are likely to getkilled?So, how can a great idea get killed?Let me count the ways.One, it dies because it's not a great ideaand you can't come up with a better one.

[music] Two, it wilts because your workgroup criticizes the idea mercilessly andthey do so in public.Three, it drowns in your organizationsstifling bureaucracy.It gets suffocated by risk aversion.[music] Four, your idea gets ambushed byrivals, or even customers in yourindustry, people who are threatened by it.Five, it gets whacked by a society thatregulates your bold idea into meaninglessdrivel.Six, technology delivers a coup de grace

death blow by subjecting your idea to theheartless laws of nature.Of course, you don't believe that creativepeople must be stopped, but wouldn't it benice to know beforehand how to outsmartthose innovation killing knuckleheads whodo?Music] So, the kind of story this videotells is interesting because you end upwith these, these puny ideas after someone


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tells us again and again and again, go outand do something amazing.Go out and, and change the world.And again, we bring back an idea.No, that's no good, that's no good, that'sno good.So, this dynamic is actually true.I do believe it happens a great deal andpeople have told me it's true.And I'm sure that you've experienced thisidea in your life as well.This kind of dynamic of someone saying, gochange the world, and then they comingback and not offering you any mechanismfor doing it.So, how do we get past this puny idea?And how do we get past sort of thisthinking outside the box problem?Well, when we think outside the box, letme tell you a few stories about whathappens.You know, what really happens as you thinkoutside the box.So, here's a great example.

This car, the was, was made by the GeneralMotors Corporation in early 90s called theEV1.The code name, the GM Impact.By the way, Impact is a terrible name fora car.But the Impact was an all-electric car.It could go about 60, 70 miles on acharge.It could go very fast.This car, in fact, could go and, and,well, I'll say, this, this car still holdsthe world land speed record for a

mass-produced electric car, 186 miles perhour.I'm not sure what that's in kilometers perhour but it's well above 200 and it's agreat testament to the kind of performancethis car had.So, in California, they made about 2,00 ofthese cars and they passed them out andthey let people use them.Actually, people leased them.People who thought this was a meaningfulthing bought this car and loved it.You may think it is kind of ugly and

people generally tell me that it is ugly,but when they hear that it goes fast andit's red, they seem to like it a lot more.So, here's the story.So, this car went out people liked thecars.And then one day, General Motors said,hey, we need the cars back.After the lease was up, they said we needthe cars back.


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And some people said, no, let me have thecar.In fact, one person offered a $1,000,000to be able to keep the car.He loved the car.This pretty well person also had a Ferrariand this car could out-accelerate hisFerrari because, think about it, in theelectric motor, you get full torque atzero rpm, unlike, unlike a gasoline car.And that says, for you, for you nerdsthat's meaningful, but for normal persons,you just ignore what I just said.This car, it was powerful, it couldaccelerate like crazy, and it was fast.And so, there's some people who really,really wanted these cars back.And the company said, no, you can't havethe cars.We need the cars back.Why do you think it is that they wantedthe cars back?Unless you've heard the story, youprobably didn't think it was to do this

with them.In fact, all the cars were taken back,there were few that were put in museumshere and there and they were crushed.So, here you have a brilliant idea,crushed.Why would that be?So, this is not a puny idea.In fact, the puny idea would be ignoredbut this idea was crushed.Let me show you another little story.That was a product in the United Statescalled New Coke.

And Coca-Cola decided that they were goingto make their product better, that theywere going to make it taste better.And so, what they did as you, if you're abig company like Coca-Cola and you have alot of money, you're going to do a lot oftaste tests, right?Of course, you're going to get a lot ofpeople to taste it.Taste this, taste this.Which one tastes better?Hm, that tastes better, taste this, tastethis.

Go to as many people as you can find, youknow, millions of dollars of taste tests.Yeah, this one is better, and make itthis, that much better.So here, you have a product that hasimproved performance, it's better, it'snew.What happened?People hated it, people did not like thisproduct.


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In fact, when they switched to new Coke,there were fights.People literally were fighting each otherin front of the freezer, you know, infront of the cooler section of their localstore because they wanted the old Cokeback.Why on earth did people want the inferiorproduct?The product that did not taste better,remember?Taste, taste, this one tastes better, theywanted this.Why would that be?A new product, hate it.Thinking outside the box here, I guess,were they?Here's another little product.This was, in fact, the first commerciallyavailable mp3 player.It was by a company named Diamond.And it was the Diamond Rio.In fact, I have one here.I'll show you the Diamond Rio.

So, the Diamond Rio was interesting, inthat it was the, the first mp3 player.Why, you know, it looks actually there'ssome similarities between the iPod whichcame slightly later than this.This was around 1999, 2000.Ipod, was around 2003, let me check thosedates to make sure I'm, I'm correct onthat.But nonetheless, this one didn't fail.This one was not, didn't, we're notcarrying this.Why are we not carrying this?

Why are we carrying the iPod instead?Well, the one story is that this companywas sued, that Diamond Rio was suedbecause the only legal content you couldget on this thing was stuff you recordedyourself.Because if you took a CD and ripped it, orif you did anything like that to make anelectronic version of, of, of commercialmusic, you certainly were violating thecopyright code.And this company was sued, and theybasically took this product off, put this

product off the market.Hm, thinking outside the box, a verycreative, very innovative product, sued.Another one, this thing here you mayrecognize.Yeah, you probably don't recognize it,actually.This is a product that was, was designedby the head the chief inventor on thisproduct was Steve Sasson.


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And this happens to be the first digitalcamera.It was made by Kodak.So, what do you think happened?The first digital camera by Kodak.Kodak should be, it should be great.Well, it turns out, in 2012, Kodakactually went bankrupt.Kodak stopped making film, they wentbankrupt.And became almost, what we would considera patent company, where they hold a lot ofpatents.And they go around making the money offlicensing their patents.But they certainly aren't selling anyproducts that will have the kind of, of,potential for change that the originaldigital camera had.Why would it be that the company that is,is the first, foremost and foremost in, inphotography and invents the digital cameraloses out?What happen there?

That's the story we would want to be ableto explain.Here another creative idea, rejected.Another one, human cloning.Human cloning is ostensibly very creative.However, it's, it's considered immoral.It is, in most places, it's illegal.In fact, there are all kinds ofrestrictions against it.That are state restrictions in the UnitedStates.Federal restrictions, state restrictions.The United States the United Nations has

restricted it.There's Islamic fatwah issued against it.The Roman Catholic church came out againstit.Everyone agrees this is a bad idea.And so, this potentially innovativeprocedure was banned.Why would that be?How can we explain that?Segway.How about that one?How many of you own a Segway?It's probably very few, because not so

many Segways were made as were thoughtwere going to be made.Something like the iPhone, for example, avery popular product now, you know, in theearly projections of the Segway, theybelieved they were going to make and sellas many Segways as they sell iPhonestoday.How could they have thought that?It's like we got a flat tire.


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Segway was essen, essentially ignored.How could that be?Innovative product.You know, potentially revolutionary.If everyone drove this instead of a car,the world would be a very different place.Yet, this product was ignored.Oh, and then there's things like this,where, you know, you try a great idea andyou just get ridiculed.And that's not fun either.And then I have this other product.There's a company in, in the state next tous where, I'm in Tennessee, and south ofTennessee is the state of Alabama.And one day, a colleague of mine told methere about this company down there thatwas making this really interestingproduct.And let me go.I'll grab some here, and bring it over.So, this product is called Sow-N-Gro.And Sow-N-Gro is this very interestingproduct.

It is you put in your plant, you put yourplants in and let your plants grow inthis.It has time released nitrogen, it has letme grab the retains moisture, timereleased nitrogen.So, here's the packaging.Promotes fast root growth, chemical-free,environmentally-friendly.Ideal in drought areas, has no mixing orsmelly odors.But it turns out that Sow-N-Gro is made,let me read it here, Sow-N-Gro TM is 100%

recycled human hair.Yuck.So, yuck.So, things get rejected.They get killed, they get ignored, theyget crushed.They get, when you have a great idea,what's going to happen?Well, I'll tell you.The way I'm thinking about this and theway I thought, think will work throughthis is to say, why does innovation fail?Well, innovation fails because creative

people must be stopped.So, let me say that again, innovationfails because the world behaves as ifcreative people must be stopped.If you have an idea and you have acreative idea, remember, that'sinnovation.Other people are going to see this aschange and they are going to try and stopyou.


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And so, if you want to be a successfulinnovator, your job will be to say, howwill they stop me?And so, let's think about this.If I could imagine or, or come up with a,a way of understanding, what are thelikely ways that my idea was going to getstopped, that could actually be veryuseful.Because if I have an idea and I know howthey're going to stop me, I can becomestrategic.And I can sort of go around, I can sort offigure out a way to get around theirstopping my idea.And that's where the title of this classcomes from is about being strategic aboutinnovation.Understanding that the world behaves as acreative people must be stopped.And so, it's our job to say, how are theygoing to stop us and how can we get aroundthat?

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2 - 1 - L1-Part 1- The Context of Innovation.txt