Conscious Chaos

Inside Google’s phenomenal innovation machine

I’ve just been to Google’s HQ (the Googleplex) in Mountain View in sunny California.  Something struck me as odd and I couldn’t get it out of my head.  I’m not talking about the legendary benefits; food every 150 feet, laundry, valet parking – we all know that Google works hard to create a hard working environment.  I’m talking about the way large presentation rooms are set up.  Most companies have a few large meeting rooms for presentations, but they’re just that: big rooms – things with doors, places where you sit down and pay attention.  But at Google I saw presentation spaces you had to walk through to get somewhere else.  No way you can’t eavesdrop or dwell a while to hear what your fellow Googler is talking about.  A small observation but I think a massive clue as to how Google innovate.

Google take care of potentially huge and far out innovation by investing in new business or hiving off a few mega minds to work on special projects with Larry Page, one of the co-founders.  Nothing special about this so far, most organisations follow the same path for what they hope will be big impact and disruptive innovation.  What is fascinating at Google is how they inspire everyday innovation – and when I say ‘everyday’ I really mean it. Google launch on average 5 new products a week, each of which is reviewed by the founders at all staff meetings every Friday.

If you come from a non engineering, non technical, non US background like me it takes a bit of time to get your head around the context in which Googlers operate.  First there’s the California effect.  Right now an entrepreneurial wave of optimism is sweeping through the ‘valley’, it’s expected that you’ll have a few failures before you make it.  It’s a heady cocktail and there are plenty of role models to prove it.  Secondly there’s the ‘ninja geek’ environment at Google where you know you’re amongst the world’s smartest, where even the most junior Googler can input immediately into a new innovation and where ideas move very, very fast.  There are so many ideas firing in Google that even the senior management can’t track them all and if they could they’d probably see that as a sign of too few ideas.

Given this context Google have grown a seemingly chaotic incremental innovation system.  At its core are smart engineers bubbling with ideas that they’re encouraged to share and work on with their colleagues as part of their 20% free time.  This takes me back to those open presentation rooms - if you have an idea then you just get on and work on it, maybe with a colleague, then you share it as a prototype with whoever will listen.  The idea is to create ‘flocking’ – resource flows naturally to the most exciting ideas; “here – I wrote a chunk of code over night that I think could really help you”.  Note I said sharing ‘exciting’ ideas – not ‘on strategy’ or ‘consumer led’ ideas.  Next Googlers have to ‘eat their own dog food’ or ‘consume (play with) their own ideas’ and ultimately beta test where friends and family get to road test ideas. 

Google isn’t perfect, they have had their share of well publicised failures but many of their innovations which you’re probably going to use today have come out of this seemingly chaotic process.  They are highly data driven (apply for a job and expect to be quizzed on childhood exam grades), have separate teams assessing the monetisation of ideas and are tightly performance managed on 80% of their time.  There’s no escape for an ultimately poor performing idea and at this volume of ideas it’s genuinely possible to celebrate failure.  So chaotic yes, but not unconsciously so.

Is there anything for other organisations to learn from Google?  Take highly regulated and comparatively slow moving organisations like  pharma companies or financial service institutions – can they really adopt conscious chaos?  I think there are elements of Google’s model that are valid for innovators everywhere, here are my top five, good luck!

1.   Drop words like ‘incremental’.  It’s not a practical innovation management concept, no one can tell if a small idea will become big - instead ensure everyone knows they need to innovate and see what bubbles up.

2.   Create the maximum number of internal platforms on which someone can rant and rave about their unformed ideas.  Don't rely on internet idea schemes, face to face is where the passion is.

3.   If you’ve recruited smart people trust their judgement, too much consumer engagement early on will merely choke radical ideas as consumers struggle to articulate unmet needs.

4.   Leaders must demonstrate a love for the detail of new products, they have to lead from the front.  It’s pretty incredible that Larry and Sergei still run weekly Q&A’s on new products.

5.   Recognise that endless rounds of ‘presenting’ saps energy and slows everything down.  Instead create the ability to rapid prototype at the front end of your innovation process.  What if innovation leaders refused to discuss an idea until they have something in their hands to discuss?

No Madness in This Method

How method is challenging the big guys

There’s a clue that things are a bit different when you enter method’s uber cool San Francisco office.

I think I’ve just seen about the best example of a company actively and successfully disrupting a big market.  Method is a 100 strong 10 year old business, actually it’s not a business; it’s a cause.  Led by Eric Ryan and Adam Lowry method is revolutionising the world of household cleaning with it’s colourful well-designed products and sustainability story.  As Adam said “it’s not enough to be green; you’ve got to perform as well”.  Method is growing in leaps and bounds in the US and in the UK.  I can’t do their branding and communication justice here – check for yourself at http://www.methodhome.com/

So what’s the formula for attacking a market held for decades by the likes of P&G and Unilever?  Competitors 1000 times the size.  My analysis of what’s working so well at method is:

1.   They’ve got a good idea:  The root of all innovation.  Design + no compromise ‘green’ cleaning power.  You pay 15% to 20% extra for this, and why not, simple.

2.   They’ve got focus:  The business does marketing, R&D, sales and innovation.  All else is outsourced.  This cuts out huge distraction.

3.   They’ve built a culture that supports continuous innovation:  Here are a couple of method’s values – ‘What would MacGyver do’ (this means ‘be super resourceful’) and ‘Keep method weird’ (this means have fun, be irreverent, stay fresh).  Couple these engaging values with the warrior spirit I saw in Adam (he talks about Method proving business can create social change and that competitors can ‘copy all that they do but they’ll never copy our culture’ – stirring stuff!) and you have a formidable force capable of defeating an army many times it’s size.

4.   Finally – they’re fast – really fast.  Whereas some companies will do research and then start a development programme method turns this on it’s head.  They are their consumers so they make a prototype (3d model, overnight), have a play with it, do it again and then ‘audition’ with some consumers.  This way they can cycle through maybe 20 iterations of a new product in the time it would take a large organisation to do one.  Having everyone sit in an open plan office with every idea on display accelerates the development process further.

All this is pretty impressive.  The question of course for big corporates is whether they can ever mimic the things method seem to be getting so right.  I think the answer is maybe, but you need a cause – something that means more than the job to you, you need distance from the mother-ship, you need a long term perspective and you need a good idea.  If you have all those things then just maybe a supertanker can act like a speedboat.

Creativity Starts With Rigour

How ‘flair’ at Four Seasons starts with ‘flow’

Ok, so I have a tough job!  I’m on our TopDog study tour and just spent the day in the Four Seasons hotel in San Francisco learning about how this famous old brand (they are 50 this year) keeps delivering legendary service and with such a personal and often imaginative touch.

The hotel business is a tough business – long hours, low pay, constant maintenance costs, increasingly demanding and last minute guests..… the list goes on.  Yet somehow the people at Four Seasons manage to ‘WOW’ as they say. 

One of our TopDog delegates showed me a photo he took of the logo of his football team that had been created with chocolates – it was on his desk in his room when he arrived.  Knocked him out. There are lots of little creative touches like that which add up to an experience people rave about. 

Here’s my diagnosis of how they deliver:

1.   Find people with in-built belief in generosity.  This is an upbringing thing – your parents taught it to you or they didn't.  Ask them to prove this by telling ‘service’ stories from the past – hard to fake.  Then induct them into the ‘Golden Rule’ – ‘treat others as you’d wish to be treated’.  The result is each hotel is an army of 300 – 400 believers.

2.   Drill staff with ‘standards’ – 500 separate quality standards that make up a guest experience.  Apparently room service consists of 17 things to get right.  Note Four Seasons talk about Standards not Rules.  The difference is palpable.  And when I say ‘drill’ I mean role play, rehearsal, training, reviews, mystery shoppers….the approach is forensic.

3.   Promote competition.  The crew at Four Seasons are photographing and videoing everything and posting it so their colleagues within the hotels and across the chain get to try to do better.  With believers like this, peer recognition for working out a better way to turn down a bed, serve a cocktail or recognise a returning guest is key.

So by nailing the detail of the job Four Seasons actually liberate their people to try new stuff, to think for themselves.  Flow does indeed make flair!

The Apple Innovation Machine

Unique and powerful innovation leadership

For several years at ?What if! as part of our TopDog programme we’ve taken a group of senior exec's to visit Apple.  Every time I’ve entered the heart of the worlds greatest innovation business in sunny Cupertino, California I’ve been tense with excitement.  You see, I’m an Apple freak (at home we have more than 15 shiny boxes with that logo, at work over 300) and I’m also obsessed with cracking the innovation genome.  So put this together and you can see why entering the hallowed land that is 1 Infinite Loop just does it for me. 

Of course there’s a ‘but’ to this story.  And the ‘but’ here is that on a visit Apple don’t share stuff, at least not much.  Yes, fantastic explanation of the product range but no deep revelation about how Apple are such an incredible innovation machine.

So now I’ve just read an article in Fortune by Adam Lashinsky that goes some way to explaining how they do it and why they are so secretive about it. http://tech.fortune.cnn.com/2011/05/09/inside-apple/  It makes for fascinating reading and chimes with my experience.  What struck me is how this messiah like figure has shaped the business around his vision and personality, so far with huge success.  But is Apple always going to be just a one off?  A single bright star in the innovation galaxy?  How far can chief exec's hope to copy Jobs' recipe?  Remember, he got to rebuild virtually from scratch whereas most of us have jumped on a moving train.  Here are a couple of practical things Lashinsky highlights that could be copied but warning, you’ll need balls of steel!

1.   Responsibility on steroids: Jobs holds weekly development reviews often going over the heads of his direct reports and publicly drilling the ‘DRIs’ – directly responsible individuals for answers.  Potentially terrifying but I imagine surviving this hugely exhilarating.  Many moons ago I worked for Unilever in Thailand and my chairman did exactly the same.  None of us were in any doubt about how important innovation was, the atmosphere was electric.  I wouldn’t use the world ‘cuddly’ to describe those days but we got results and there are plenty of cuddly innovation environments that no one will remember.

2.   No general management, no P&Ls:  Only the CFO gets to play with the numbers.  Otherwise functional expertise is strictly adhered to.  Apple is not a place to learn the art of general management.  But this means ideas get shared at the top of the company.  This is pretty radical stuff compared to many organisations I work with.  All too often ‘ideas’ kicked around at the upper echelons are stripped of what I call ‘look and feel’ and represented instead by yields and launch pathways.  To Apple, and to Jobs the role a product plays in someone’s life is paramount – and it’s accepted that that role will be part emotional and part rational.

All this doesn’t mean that Apple eschew consumers as part of the development process.  The thing is Apple people are their consumers and they are very confident around their vision for how things should be.  This is in refreshing and stark contrast to many organizations who rely on endless research and endless dialogue (talking masquerading as collaboration?) to innovate.  Apple are a great reminder that there’s no substitute for strong leadership.  Jobs is famous for drilling his people on the art of say NO.  We can establish all the innovation process, tools, capabilities we want but none of it is worth a penny unless someone is consistent, even obsessional about what’s ok and what’s not ok around here.

(PS – Lashinsky has insight into how Jobs is preparing for Apple after Jobs, again methodical, purposeful and clinically cunning.)

Viagra for Innovation

Why stimulants are the answer for most of us

Last week I was in a giant tent in the grounds of London Business School to hear various CEO’s (amongst others - WPP’s Sir Martin Sorrell, Lloyds’ Antonio Horta-Osorio, 3M’s George Buckley) on the subject of innovation.  The unseasonal high winds meant that at some points the flapping of the tent added a sense of danger and was so loud you couldn’t hear the speakers.  But when I could I was struck by George Buckley describing how naturally innovation came to 3M. 

Most of our clients at ?What If! struggle to make innovation part of their day to day activities, for reasons we’re all too familiar with.  We’re also all familiar with 3M’s 15% ‘playtime’ (it’s actually closer to 5% as not everyone participates all the time) but what I hadn’t twigged was the power of innovation ‘confidence’.  The picture Buckley painted was of an organisation with innovation as part of it’s DNA.  An organisation where innovation, it’s boosters, blockers and rewards are out in the open.  No need to learn new skills each time they need to innovate because it’s a frequent activity that you get used to; ‘innovation is like going to the dentist, you get used to feeling the pain’.  As Buckley says innovation boils down to clear strategic direction, hiring optimistic people and allowing them freedom and choice so that ‘as a junior researcher I can have my hands on the company tiller – even if a little’. 

Later and in contrast another speaker, Nick Hughes, previously with Vodafone and developer of the Kenyan mobile money platform M-Pesa told us that he could only get traction on the idea after attracting £1m of external financing. This funded a prototype which enabled the project to move through the system. 

I suspect there are two sorts of large companies in the world; First there are a very limited number (4 or 5; maybe 3M, Google, IBM, Apple…..) with innovation DNA who have the ability to reproduce in different forms naturally and secondly, all other companies.  These are the leviathans for whom innovation is an alien activity. They require a dose of corporate Viagra to get them going.  An injection of something different – a cocktail of freshness and bravery from outside their organisation.

So there’s a new way of looking at innovation – if your organization doesn’t do it naturally then what’s your ‘stimulus’.  You never know it might be fun!

I’ve started – so I’ll finish!

Innovation is hard because it involves self destruction

I heard this story from my colleague Maddi Riddell. It’s about an innovation idea that ‘got away’.   In 2004 we ran a project with Heinz in the UK to look for new opportunities in ‘convenience food’. We put our ideas into quantitative testing, including one that was slightly off brief – Beans on Tap – a wide mouth bottle of beans designed to be kept in the fridge and capitalise on the ‘fridge hanging’ snack habit which canned beans hidden in the kitchen cupboard miss out on. I’m afraid our other ‘on brief’ convenience food ideas didn’t pull up any trees but Beans on Tap’s quant scores were ‘through the roof’.  However, the brand team had just committed to the trade on their launch for that year and ‘Beans on Tap’ was put to one side.  Ultimately the launch didn’t work out and now seven years later we’re so excited the new ‘Fridge Pack’ has hit the shelves. We think it looks terrific and hope it’s doing well for them.  Clearly we think it’s a great idea!

This story reflects the a painful truth about innovation; to do new things we almost always have to stop doing the comfortable things we’re doing now – despite the fact that we have invested in specialist people, production facilities and know how.  Innovation is easy for a start up – they have nothing to destroy but for an incumbent with established brands and chains of supply innovation needs generous and expansive thinking.  Ultimately strong and persuasive leadership is needed to jolt force an organisation out of its river of thinking.  Maybe this should be the innovators mantra:  If its comfortable it’s probably wrong.

                              2004                                                    2011

Fail fast, errr, how exactly does that work?

A practical tool that makes learning from failure a reality

'Fail Fast'.  If it's not number one in the league of annoying innovation motherhood statements it’s certainly top five.  Ok, yes we get the 'fail fast' principle but does it work?  Has any business leader actually ever told their people to fail fast.  I'm imagining a lot of blank faces when being exhorted to 'screw it up and be happy'.  Is Fail Fast a myth?  

If you're interested in innovation this is an inescapable topic.  And rightly so.  Harvard Business Review dedicated a whole issue to 'failure' recently (HBR April 2011).  There's a tremendous article about the demise of Blockbuster and written from several of the key player's perspectives.

http://hbr.org/2011/04/how-i-did-it-blockbusters-former-ceo-on-sparring-with-an-activist-shareholder/ar/1

But I have to admit I'm such a failure I'm still working my way through 140 pages of failure analysis.  So here's my greatest ever failure story, so great its really a success story masquerading as a failure story.  It's short too:

My great buddy Eric Peacock told me about the time he was Investor, Chair and Chief Executive of Babygro.  They are the people who make that cuddly product all us parents of grown up kids remember wistfully.  I too have now forgotten the dreadful smells and sleep stealing brand associations..... Back to the story:  Eric bought into the concept of learning from failure as part of the innovation process but wanted to structure it into business operations.  Cleverly he invented the Learning Account, a line on a spreadsheet that totaled 'wasted' expenditure and itemised the learning from each failed investment.  Eric tells me that recasting losses as learning’s and taking the trouble to articulate each meant his teams dug deep into what really was the learning, could it have been foreseen, should they feel good about it or bad about it?  And just as management accounts were scrutinised by investors and company leaders so was the Learning Account.  Not many organisations debate  how much to invest in learning through failure, that's because they don't measure it, they haven't got a Learning Account.