We've all heard the news that the traditional MBA framework is broken, but adding courses on business ethics and financial crises won't solve the problem. And although Harvard, Wharton, Kellogg, and the rest are all considering bringing new ways of thinking into their hallowed halls, a relatively small school in Canada is actually transforming the meaning of an MBA right before our eyes. The Rotman School of Management, helmed by Roger Martin, proposes a radical idea: to develop business leaders who are well-grounded in multiple disciplines. The Rotman faculty aim to mold managers who are equally comfortable and adept at using tools and frameworks from business, popular culture, and design to solve the most urgent challenges of the day--what Rotman calls integrative thinkers and what I call hybrid thinkers. He's a bit of a kindred spirit.
Earlier this week, I had the chance to sit down for a public lecture with Roger to discuss his new book The Design of Business: Why Design
Thinking is the Next Competitive Advantage, which focuses on the part of the Rotman approach most absent from traditionally analytical MBA programs: design thinking. Roger cares most about bringing together both the art and the science of management to create better leaders. His work is a correction to the data-driven revolution that has made business more reliable but which has also driven courage and intuition out of management. But he's no fan of simply giving designers the keys to the kingdom, either. An over-reliance on intuition is every bit as limited as management by the numbers.
You can view the entire interview in the video above or get a sense for what we talked about in the beautiful mindmap created by my colleague Jon Gabrio.
Until you have time to get in deep (you can see this image larger here), here are the four biggest takeaways from the conversation:
Strategy is an act of design. Roger's interest in design thinking stretches back two decades to his time working closely with the senior vice president of design at Herman Miller. What changed the way Roger saw the world was that this highly skilled designer tended to view all of his challenges the same way. Whether overseeing the design and introduction of the Aeron chair or working out new directions for the organization, he focused on new possibilities rather than the application of existing ideas. You can't analyze your way to real strategy. You have to create it from data, guts, empathy, creativity, and a little thin air.
Balancing the analytical and the intuitive is key to great leadership. At the beginning of this decade, countless companies could have created the iPod but didn't because their analysis told them it was too risky. Analytical thinking prevented them from seeing a promising new opportunity and driver of growth. Apple, led by the famously intuitive Steve Jobs, was able to seize that opportunity and run with it to market leadership. That said, the gut of Steve Jobs is far from infallible. The AppleTV, Power Mac G4 Cube, and his company NeXT were all flops because they didn't make sense from an analytical standpoint. Great leadership involves bringing both lenses to bear to find better possibilities.
Roger's take on design thinking isn't rooted in design. One of the more surprising comments Roger made during our conversation was that designers aren't necessarily good at what he calls design thinking. Having a tremendous sense of aesthetics, prototyping, form, and ergonomics doesn't inherently reflect the ability to imagine previously unseen possibilities. To my mind, this calls into question the entire term. If design thinking isn't based in design and the abilities of designers, then the term may need to change. Without any question, increasing any organization's design capability will increase its ability to differentiate from its competitors, to build a more consistent brand, and to create more appealing products. But it's something else entirely to create a culture of innovation. We would do well to make this clear in the terminology we use.
Templates, not management theory, are the enemies of innovation. A few years ago, Roger said, quite provocatively, that managers need to become designers to succeed in the next era of business. This was a comment that was met with great fanfare and not a little controversy. But when discussing the topic now, Roger has a slightly different outlook. It's not that either businesspeople or designers have a monopoly on good ideas. It's that there is a vanishingly small number of people who are actually interested in solving mysteries: as few as 10 to 15 percent at traditional strategy firms, a similar number in design firms, and even fewer among most corporations. Most people, whatever their background, are more comfortable reapplying a formula that has worked in the past than at generating new possibilities. They just try to use a template from an existing success, which is the chief reason we see so many copycat products and copycat strategies. We don't necessarily need more design-minded businesspeople or more business-minded design people. We just need more people ready to take on mysteries.
I've got just one more thing to share from the evening. It's small, but essential to call out. Roger is an incredibly gracious and humble guy, always ready to praise his colleagues and friends. That's rare for people at his level and with his accomplishments. After all, it's his humility and team-building that has allowed him to attract the kind of amazing faculty and executive staff who are the on-the-ground heroes of Rotman's good-to-great transformation.
Dev Patnaik is the CEO and founder of
Jump Associates, a firm that helps companies create new businesses and
reinvent existing ones. He advises senior executives at some
of America's most admired companies, including GE, Nike, Target, and
Hewlett-Packard, and is also an adjunct professor at Stanford
University, teaching design-research methods. His 2009 book Wired to Care: How Companies Prosper When They Create Widespread Empathy, makes the audacious argument that the human power of empathy is the
source of all innovation. Dev was recently featured as a guest on "The
Business of Innovation," a series on CNBC. His articles on innovation
and strategy have appeared in BusinessWeek, Brandweek and the Design Management Review.
When Interval Research Corporation opened its Silicon Valley offices in 1992, everyone involved was certain of one thing: this would be the single-most innovative company ever created. How could it not be? Interval was the brainchild of Microsoft co-founder Paul Allen and David Liddle, formerly of Xerox PARC. Allen and Liddle had gathered a team that included the inventor of the inkjet printer, the first person to make music on a computer, and even the creator of Chaos Theory. They even had a parapsychologist (that's right, a ghostbuster).
Allen gave Interval Research an audacious challenge. The company was given $100 million and 10 years to spend it. As insiders describe it, Interval wasn't expected to even launch anything in its first five years and didn't need to generate any profits for the first seven. Allen was apparently willing to hold his breath for a decade if the experiment would result in multiple, massive technological revolutions.
Despite all it had going for it, Interval was a flop. The company spawned five start-ups, none of which made the expected dent in the universe. Among Interval's creations were a very expensive pirate computer game that could actually be controlled by a model pirate ship and a company that made CD-ROMs for girls. Seven years into the experiment, Allen removed Liddle as CEO of the company and demanded that Interval abandon its mission. Henceforth, the erstwhile innovation hothouse would instead focus on creating applications for Allen's cable television company. A year later, Allen abandoned this mandate, as well, and pulled the plug on Interval for good.
It would be inaccurate to say that the folks at Interval were unable to come up with anything. In fact, they produced all manner of interesting ideas that ranged from the eccentric to the profound, including some very useful advances in computer networking technology. Unfortunately, the company killed most of these ideas before they ever saw the light of day. Frustratingly, most of these ideas weren't canceled because they lacked merit. Rather, many of the concepts simply felt too small to be worthy of Interval's grandiose ambitions. Interval produced all sorts of nifty ideas, but those ideas seemed pathetic for a company that was aiming for revolution. Nothing can kill innovation faster than the performance anxiety that results from outsized ambition.
Success can raise the bar for a company until the pressure for big results kills all creativity. It's that kind of pressure that prevented J.D. Salinger from writing a follow-on to The Catcher in the Rye. It's also why Robert Pirsig took thirty years after Zen and the Art of Motorcycle Maintenance to write his second book. And it's why James Cameron is only now wrapping up his first real movie since Titanic made him the king of the world.
In a business culture that likes to talk up big innovations, we may be lacking appreciation for the beauty of the small idea. Outsized ambitions can set you up for failure in a big way when you spend most of your time rejecting your own thinking. No one bats a thousand at coming up with big, disruptive innovations, so you need to explore all your ideas to find the great ones. Not only that, most really big ideas often look small to start. In their book The Granularity of Growth, strategy theorists Patrick Viguerie, Sven Smit, and Mehrdad Baghai note that most billion-dollar business ideas look like $200 million ideas at the outset. Big growth happens when a lot of little things catch fire together.
I often tell clients that a good way to kill an innovation department is to say that you will only work on big, disruptive ideas. The blind pursuit of the big prevents you from getting good at the game. Have you ever heard of a quarterback who plays only in Super Bowls or a basketball star who takes only full-court shots? If you want to make great ideas happen in your business, you need to embrace and come up with some great big ideas and a whole lot of great little ideas, too.
In celebration of little ideas, here's a video of something I came up with a couple of years ago. It hasn't changed the world, but I hope it brings a smile to your face.
Dev Patnaik is the CEO and founder of
Jump Associates, a firm that helps companies create new businesses and
reinvent existing ones. A trusted advisor to senior executives at some
of America's most admired companies, including GE, Nike, Target and
Hewlett-Packard, Dev is also an adjunct professor at Stanford
University, teaching design-research methods.
His book Wired to Care: How Companies Prosper When They Create Widespread Empathy,
making the audacious argument that the human power of empathy is the
source of all innovation, was published in spring of 2009 by the
Financial Times Press. A frequent speaker at marketing, design and
innovation forums, Dev was recently featured as a guest on "The
Business of Innovation," a series on CNBC. His articles on innovation
and strategy have appeared in several publications including BusinessWeek, Brandweek and the Design Management Review.
How many times have you stared at a competitor's new product and said, "We had that idea two years ago, but we just didn't act on it." Well, why not? Did you think the market research wasn't quite right? Did you become convinced that it wasn't a good idea when you couldn't rally other people around it? Did people get in your way with stupid or irrelevant questions that tied the team up in a state of analysis paralysis? The difference between good companies and great companies is not the quality of their ideas. It's their ability to anticipate and act on the needs of their customers. Companies with a widespread sense of empathy prosper over the long term.
Every one of us gets what empathy is on an individual level: the ability to reach outside of ourselves and walk in someone else's shoes. To get where they're coming from--to feel what they feel. As I titled my book, we're all Wired to Care. And it's high time our customers were, too. Widespread empathy is about getting every single person in an organization to have a gut-level intuition for the people who buy their products and services--the folks who really matter. When your organization develops a shared and intuitive vibe for what's going on in the world, you're able to see new opportunities faster than your competitors, long before the rest of us read about it in The Wall Street Journal. You have the courage of your convictions to take a risk on something new. And you have the passion to stick with it, even if it doesn't turn out right the first time.
Imagine a place where every person has the same intuitive connection to the world of their customers. Not just the folks in marketing, but the people in R&D, too...and finance, and HR, and legal. Imagine a place where some guy who works in Accounts Payable has a gut level intuition for how his customers think. And then, when it comes time to revise the company billing policies, that guy realizes that there's one way to change the system that might really help customers out and another that might totally enrage them. At a company infused with widespread empathy, that person in accounts will do the right thing, as will thousands of others across the organization, which adds up to a huge amount of value to customers.
So how do you get Widespread Empathy? There are really three principles: 1. Make it easy: Provide lightweight methods for people in your company to connect with the outside world. 2. Make it everyday: Surround your work environment with information about the lives of your customers. 3. Make it experiential: Ditch the customer insight PowerPoint and go feel what other people are feeling.
Make it easy One fatal error many leaders make when seeking change is to try to do too much of it all at once. It's better to go a little at a time. That's why successful empathy programs don't begin by mandating that every employee go on ethnographic field research trips. A lot can be accomplished by providing simple and short ways for everyone in the company to spend a little time thinking like their customers. For this very reason, there is an actual Target store next to Target headquarters. Any Targeteer can walk downstairs, meet a few Target customers, and become a shopper themselves. Many retail companies are located miles from their nearest store, which makes it hard for their employees to walk in the shoes of their customers. Target just asks you to walk downstairs and pick up your household essentials.
Make it everyday The whole point of Widespread Empathy is to build a strong, implicit understanding of ordinary folks into your company. And the best way to do that is to make it normal to be thinking about them all the time. This is one of Harley-Davidson's secret strengths. Harley's office is a shrine to the motorcycle culture that the company has helped to create. Walking down an aisle of otherwise ordinary office cubicles, you're confronted by an endless display of photos and signs from famous bike rides and exquisitely painted motorcycle gas tanks. On one wall, snapshots capture scenes from one employee's recent bike trip down the coast of California. Other walls proudly display banners and photos from rallies and other events, including the pilgrimage that hundreds of thousands of riders make every year to Sturgis, South Dakota. It is impossible to work at Harley-Davidson and not learn a lot about the people who buy the company's motorcycles.
Make it experiential Perhaps the most insidious trend in business these days is an over-reliance on quantitative data at the expense of real world experience. In our quest for reliability, it's possible that we've created an entire generation of assistant marketing managers who believe that if they have five interesting bullets on a PowerPoint page, they understand their business. All business happens in the real world, so people from companies should spend more time there, too. When Lou Gerstner became IBM's CEO in 1993, he created "Operation Bear Hug," a massive program that required the company's top 250 managers to visit at least five of the company's biggest customers in just three months. And they weren't there to sell products and services. Their task was to just listen to customers' concerns and think about how IBM could help. At the time, it seemed like a crazy way to use executives' time. But the company's dramatic turn-around and successful entry into professional services revealed the wisdom of the move. Today, routine visits to customers are simply the way it works at IBM.
Dev Patnaik is the CEO and founder of
Jump Associates, a firm that helps companies create new businesses and
reinvent existing ones. A trusted advisor to senior executives at some
of America's most admired companies, including GE, Nike, Target and
Hewlett-Packard, Dev is also an adjunct professor at Stanford
University, teaching design-research methods.
His book Wired to Care: How Companies Prosper When They Create Widespread Empathy,
making the audacious argument that the human power of empathy is the
source of all innovation, was published in spring of 2009 by the
Financial Times Press. A frequent speaker at marketing, design and
innovation forums, Dev was recently featured as a guest on "The
Business of Innovation," a series on CNBC. His articles on innovation
and strategy have appeared in several publications including BusinessWeek, Brandweek and the Design Management Review.
It's time for a story of personal failure. Relatively early in my career, I was a design manager at a company named Forbes-Marshall, a manufacturer of large industrial process equipment--things like boilers and pumps and valves. One of my biggest projects was working on a new handheld PH meter that the company wanted to launch. We were trying to take all of the functionality of one of our large instruments and pack it into a small handheld meter that a plant engineer could carry around as he went about his day. Without a doubt, that project was the biggest flop I've had so far in my professional career.
The project was supposed to be completed in six months. It took the better part of three years. In that time, the cutting-edge performance criteria we were shooting for became yesterday's news. When it finally came to market, the device was slow, clunky and out-dated. It barely worked. The thing was supposed to be waterproof to survive the rough conditions inside of a factory, but I'm not sure we ever actually got production models to be totally sealed. We'd projected that the product would sell in the tens of thousands. I think we sold five. To this day, former co-workers of mine can't resist the temptation to remind me of that glorious flop whenever we meet.
Looking back at that experience, I now realize that that project was a pointed lesson in innovation strategy. My little handheld meter didn't fail solely due to my own shortcomings (although those were ample). The target market was a plant engineer who typically didn't buy from our company. While Forbes-Marshall excelled at making large, expensive equipment in relatively low volumes, my little PH meter was designed to be a low-cost, high-volume product. And though the company was brilliant at finding new applications for existing technologies, this project sought to create something that was new to the world, or at least to our little corner of it. In trying to create a new device, my team and I set out to make the wrong product for the wrong customer in a way that ensured the deck would be stacked against us. When I think about what I would do differently if I had to do the project over, the answer is simple. I wouldn't make the product at all.
We all know that innovation can be challenging. It's incredibly hard to come up with ideas for new things and even harder to bring them to life. But it's actually far more difficult to figure out what kinds of ideas you should be coming up with in the first place.
Nortel, the recently bankrupted Canadian telecom giant, is but the latest casualty of such thinking. Its annual $2 billion R&D investment included $400 million devoted to such random projects as virtual reality applications, high-speed data networks, and collaboration software, which predictably failed to deliver new revenue to a company best known for providing a dial tone when you would pick up the phone. Not surprisingly, none of those projects created substantial shareholder value, let alone save the company from extinction. In tough times, a clear innovation strategy can help a company to get more bang from its innovation buck and avoid the costly mistakes of folks like myself and Nortel.
A good innovation strategy takes a sizeable amount of rigorous thinking, backed up by both qualitative and quantitative data. That said, the questions that drive such a strategy are fairly straightforward. If companies seek to innovate sustainably over time, they need to understand who they focus on, what they should make, and how they actually conceive and develop new products and services. An organization needs to be selective and aim for areas of high impact. Great innovation strategies don't waste time and resources trying to innovate in areas that are ultimately of little value to end customers. When an innovation strategy succeeds, it does so because it helps a company play to its strengths.
The Who It's often said that innovation is about problem-solving. That's true, and the real trick of it is knowing whose problems you should solve. You can't be all things to all people--that's a great way to end up meaning nothing to everyone. Great companies know who to focus their innovation efforts on. That isn't to say they sell to only one type of person, merely that they keep a single person at the center of their focus. What results is a sense of clarity that often appeals to many customers beyond the core.
Target is the No. 2 retailer in the country, and every day, millions of Americans from all walks of life enter its stores. Yet despite its broad appeal, Target tries to focus on a single ideal guest. She's a 35-year-old suburban mom with two kids who needs to look out for value but aspires to give her family much more than what a rock-bottom price might offer. Everything Target does seeks to delight this woman, from the house-branded products it makes to the design of its stores to the vendors whose stuff it puts on shelves. Target knows that by focusing on its core guest, it can create a clear experience that other people will find appealing as well. When trying to answer the Who question, don't try to be all things to all people. Innovate for the best customers in your market.
The What A lot of companies approach innovation in a scattershot fashion. They go after as much interesting, new stuff as they can, and then they see if anything sticks. While this is fun, it also means people waste time and money trying to do too much--very little of it successfully. It's far more successful to make fewer, bigger, and better bets that your organization can execute better than anyone else. If you can identify the three or four major growth platforms that are going to power your business, it will allow you to focus your attention and have a higher chance of success.
Apple gets this right. Usually credited for its brilliant design sensibility and focus on consumer experience, Apple actually has an equally interesting strategy story to tell. When Steve Jobs came back to run Apple after a decade in the wilderness, the company was wildly unfocused. Jobs took care of that. He killed off the Newton PDA. He ditched the printer business. Servers and game consoles? Gone. He even reduced the company's computer models from fifteen to four. And with this lean, mean lineup, he was able to push the organization to achieve far more ambitious goals, creating groundbreaking products like the iPod and the iPhone. When thinking about our personal investments, we're always told to diversify our portfolio and spread out our risk. But that works because investing doesn't actually require you to do much. Innovation, however, requires attention and effort. When crafting an innovation strategy, it's often more effective to follow Mark Twain's advice: "Put all your eggs in one basket, and watch that basket."
The How A few minutes searching on Google reveal that there are a lot of different ways to innovate. Some companies sequester their teams into skunkworks to come up with big ideas. Others set up internal venture funds that almost feel like innovation suggestion boxes. Still others have been quite successful by simply copying their competitors. There isn't one way to innovate. Depending on the capabilities of your company, the businesses you're in, and your corporate culture, some approaches might work better than others. Choosing the right approach is the central challenge in crafting an innovation strategy, and it requires more thought than we have time to discuss here. But the short answer is simple: play to your strengths.
Procter & Gamble does this brilliantly. Several years ago, its leaders realized that although the company was world-class at commercializing and marketing products, it hadn't cornered the market on good ideas. So it launched Connect and Develop, a strategy that mandates that fully 50 percent of P&G's new products have to come from outside the company, either through acquisition or partnership. This approach has led to breakout successes like the Olay Regenerist anti-wrinkle cream, a Mr. Clean car wash franchise business, and even Press 'n' Seal Glad wrap, a revolutionary partnership with competitor Clorox.
There is no single best way to innovate. It's far more important to discover what your organization's unique strengths are, and then figure out how to do more of them. The more you play to those strengths, the more you'll innovate, and the more you'll get the competition to play your game instead of theirs.
Dev Patnaik is the CEO and founder of
Jump Associates, a firm that helps companies create new businesses and
reinvent existing ones. A trusted advisor to senior executives at some
of America's most admired companies, including GE, Nike, Target and
Hewlett-Packard, Dev is also an adjunct professor at Stanford
University, teaching design-research methods.
His book Wired to Care: How Companies Prosper When They Create Widespread Empathy,
making the audacious argument that the human power of empathy is the
source of all innovation, was published in spring of 2009 by the
Financial Times Press. A frequent speaker at marketing, design and
innovation forums, Dev was recently featured as a guest on "The
Business of Innovation," a series on CNBC. His articles on innovation
and strategy have appeared in several publications including BusinessWeek, Brandweek and the Design Management Review.
When A.G. Lafley was named CEO of Procter & Gamble during the summer of 2000, the task of turning the organization around looked overwhelming. The price of a share in the consumer packaged goods giant had declined by nearly 55% in just two months. The company was missing revenue and profit targets as it learned to grapple with the Internet and new global competitors. To remain the world's preeminent maker of useful stuff for the house, P&G needed to make a lot of changes very quickly. Lafley saw design as being central to P&G's transformation. Design promised to unleash the creativity of the organization and find new ways to unlock value that a marketing-driven company might not have discovered. To lead the charge, Lafley appointed Claudia Kotchka as the company's first-ever VP for design strategy and innovation in 2002. Her job was remarkably ambitious: Make innovation happen at P&G.
And she did. In her nine years in the role, Claudia up-ended the status quo in P&G's product development process. She placed designers within the company's many business units so they could shape strategy directly instead of just designing how products looked. She educated businesspeople in the company about the strategic impact design could have. She formed a board of leading external design experts who offered guidance for how to make P&G into a world-class design organization. Over time, her efforts have P&G to once again become one of the most innovative companies on earth. Between 2000 and 2008, revenue more than doubled from $40 billion to $83 billion, while earnings took a gigantic leap from $2.5 billion to more than $12 billion. This growth is the kind of performance one expects from an IT company or a firm operating in an emerging market. Not a 200-year-old soap company based in Cincinnati, Ohio.
Claudia's success has been celebrated in many corners as a triumph of design thinking. Though its definition varies depending on who you ask, most of its proponents (including many at P&G) agree that design thinking is any process that applies the methods of industrial designers to problems beyond how a product should look. My mentor at Stanford, Rolf Faste, did more than anyone to define the term and express the unique role that designers could play in making pretty much everything. Not just products, but services, experiences, and presumably finance, education, and government, as well. By this standard, what Claudia achieved at P&G is perhaps the most impressive accomplishment of design thinking's relatively recent heritage. She took what she knew about design and applied it to a broad array of problems faced by one of the world's largest corporations. On the face of it, Claudia's tenure at P&G is a testament to the power of thinking like a designer.
Here's the problem: Claudia Kotchka isn't a designer. She's an accountant by training. And she spent most of her career working in marketing. It would be hard to envision a business executive with a more traditional background. While Claudia's success makes a great case study for the triumph of a designer finally being brought into the conversation, it's just not true. And it calls into question whether design thinking is really the missing ingredient in innovation.
Indeed, the real power of Claudia's story is that she isn't a designer. I see this phenomenon all the time: accounts who lead a design revolution, former journalists who manage a technology lab, even doctors who become agents of organizational change. All of these cases suggest that something bigger is going on, more powerful than the adoption of a single school of thought. The secret isn't design thinking, it's "hybrid thinking": the conscious blending of different fields of thought to discover and develop opportunities that were previously unseen by the status quo. Claudia's lack of experience as a designer didn't make her a weaker proponent of design, it made her a stronger one. She immersed herself in design thinking and then merged it with her experiences in accountant thinking, marketing thinking, and several more besides. To walk away concluding that design thinking is what makes P&G great would be like going to the movies and concluding that Indiana Jones is a great hero because he always wears a hat.
Hybridity matters now because the problems companies need to solve are simply too complex for any one skillset to tackle. We're in an era when car companies are trying to grapple with massive changes in technological capability and market need, when cell phone companies are trying to own global entertainment, and when snack food companies face extinction unless they figure out how to promote health and wellness. As Lou Lenzi, a design executive at Audiovox, once told me, if you want to innovate, "You need to be one part humanist, one part technologist, and one part capitalist."
Hybrid thinking is much more than gathering together a multidisciplinary team. Hybrid thinking is about multidisciplinary people. John Lasseter, the co-founder of Pixar and creator of Toy Story, isn't beloved and admired because he's good at technology. We love him because he effortlessly fuses technology, art, and storytelling. Alton Brown, star of Good Eats, began as a TV producer, then decided to learn how to cook and became fascinated by food science in the process. His program on Food Network is a potent admixture of cooking show, science class, and sketch comedy, wrapped into one of the slickest how-to shows on TV. It's particularly interesting to note how many proponents of design thinking are actually hybrid thinkers themselves. David Kelley, the celebrated founder of the design firm IDEO, has a bachelor's degree in electrical engineering from Carnegie Mellon in addition to his master's in design from Stanford.
My own personal experience is that hybrid thinkers make for a much more interesting day at work. At Jump Associates our staff includes a former partner at Deloitte who's also an award-winning sculptor. We've employed a Ph.D. in cognitive science who's also a filmmaker. And another one of my colleagues has an MBA as well as degrees in Chinese language and international relations. Jump is constantly on the hunt for hybrid thinkers, folks who can connect the dots between what's culturally desirable, technically feasible, and viable from a business point of view. And to be sure, it hasn't made our recruiters' lives any easier. We live in a society that prizes depth in a single field of research over breadth in multiple areas. Innovation, however, demands that you see the world through multiple lenses at the same time, and draw meaning from seemingly disparate points of data.
Without a doubt, design thinking is an important new body of knowledge for companies seeking to expand their capacity to innovate. But the goal isn't to shift from one mindset to another. Learning new ways to think isn't very helpful if you forget what already know.
Dev Patnaik is the CEO and founder of
Jump Associates, a firm that helps companies create new businesses and
reinvent existing ones. A trusted advisor to senior executives at some
of America's most admired companies, including GE, Nike, Target and
Hewlett-Packard, Dev is also an adjunct professor at Stanford
University, teaching design-research methods.
His book Wired to Care: How Companies Prosper When They Create Widespread Empathy,
making the audacious argument that the human power of empathy is the
source of all innovation, was published in spring of 2009 by the
Financial Times Press. A frequent speaker at marketing, design and
innovation forums, Dev was recently featured as a guest on "The
Business of Innovation," a series on CNBC. His articles on innovation
and strategy have appeared in several publications including BusinessWeek, Brandweek and the Design Management Review.
Up until a year ago, innovation was the toast of the business world. Companies around the world were investing heavily in design, launching new products, and even building virtual retail stores in Second Life. Then the financial crisis erupted, destroying shareholder value, corporate budgets, and family income alike. In the wake of that disaster, it's entirely legitimate to wonder: is innovation relevant anymore?
Well, it depends on how you think about it. If it means making a bunch of cool stuff that gets a lot of buzz but doesn't go anywhere, innovation is way out of season. But that's missing the point. Real innovation isn't about novelty, it's about how many million, or even billion, dollars you need to add to the top line next year. It's about asking new questions that your organization needs to answer. It's not that innovation isn't relevant, it's that stupid innovation isn't relevant anymore. Especially in tough times, companies need innovation that addresses one of three key strategic mandates: reinventing the core business, expanding beyond the core, or facing down an existential threat. That's what this blog is all about: innovation that actually has a business impact. And here's how to create that kind of innovation.
Reinvent the core business. No matter how much an industry, product, or sector is booming today, it will either be transformed or demolished tomorrow. Every single company needs to constantly innovate and experiment just to deliver steady results in the face of an ever-shifting market and overwhelming price competition. Such market serenity is an audacious mandate. Just as a graceful swan moving through a pond needs to paddle like hell underwater to maintain momentum, corporations need to do wild stuff below the surface to remain calm above the water line. Five years ago, making mobile phones was a fantastic business to be in. Now margins have eroded, growth is slowing for the first time ever, and only Apple and RIM are making any money. That's why Tero Ojanpera's efforts to transform Nokia into an entertainment company actually matter. He knows Nokia won't remain great by coming up with one or even fifty new phones--it needs to fundamentally reinvent itself.
Expand beyond the core. As any good farmer will tell you, diverse systems are significantly more productive and resilient than homogenous ones. If you grow only corn, the arrival of a single pest can destroy your livelihood. Unfortunately, most industries are banking their future on one type of crop. When their existing markets flatten or slow, they have nowhere to go. Great companies figure out how to find new growth beyond their existing businesses that, in turn, reignites excitement about the core. Think about Disney starting out in animated films and expanding into theme parks and eventually cruise lines that reinforced its dominance in personal entertainment. Nike has also done remarkably well here. About a decade ago, its leaders realized that Nike wasn't just a shoe company, it was a sports company. And as a result of this strategic shift, it got into sunglasses, watches, and MP3 players with remarkable speed and success. Those adjacent businesses have, in turn, helped to increase demand for the core footwear business.
Face down an existential threat. It's not that often that companies face obsolescence. The car doesn't replace the horse-and-buggy every day. But when such threats arise, it's time to innovate or die. Think about AT&T when long distance rates collapsed in the face of a deregulated market. Think of Sony when rising labor costs made their Japanese manufacturing base no longer cost-competitive. Think about the struggles of every newspaper in America today. These are the kind of issues that business leaders don't like to deal with but can't afford not to. When faced with such a threat, managers feel a very human need to be the one person who has the answer. It's far more important to frame the question to the rest of the organization and spur hundreds of new ideas and experiments to find a way out of the mess you're in. Amazon's remarkably unflashy Kindle was initially viewed as a dalliance with hardware for the world's biggest book store. It's actually a response to just such a big-picture threat. Newspapers, magazines, and book publishers are all vanishing right now. Wood pulp might be going away as the dominant medium for information, but Amazon's defining what comes next so it will be around as long as reading and writing are.
Get back to real innovation. Especially in tough times, innovation matters. Just remember: It's not about novelty. It's about creating new businesses that actually move the needle. It's about growth.
Dev Patnaik is the CEO and founder of Jump Associates, a firm that helps companies create new businesses and reinvent existing ones. A trusted advisor to senior executives at some of America's most admired companies, including GE, Nike, Target and Hewlett-Packard, Dev is also an adjunct professor at Stanford University, teaching design-research methods.
His book Wired to Care: How Companies Prosper When They Create Widespread Empathy, making the audacious argument that the human power of empathy is the source of all innovation, was published in spring of 2009 by the Financial Times Press. A frequent speaker at marketing, design and innovation forums, Dev was recently featured as a guest on "The Business of Innovation," a series on CNBC. His articles on innovation and strategy have appeared in several publications including BusinessWeek, Brandweek and the Design Management Review.
When 
It would be inaccurate to say that the folks at Interval were unable to come up with anything. In fact, they produced all manner of interesting ideas that ranged from the eccentric to the profound, including some very useful advances in computer networking technology. Unfortunately, the company killed most of these ideas before they ever saw the light of day. Frustratingly, most of these ideas weren't canceled because they lacked merit. Rather, many of the concepts simply felt too small to be worthy of Interval's grandiose ambitions. Interval produced all sorts of nifty ideas, but those ideas seemed pathetic for a company that was aiming for revolution. Nothing can kill innovation faster than the performance anxiety that results from outsized ambition. 
Every one of us gets what empathy is on an individual level: the ability to reach outside of ourselves and walk in someone else's shoes. To get where they're coming from--to feel what they feel. As I titled my book, we're all Wired to Care. And it's high time our customers were, too. Widespread empathy is about getting every single person in an organization to have a gut-level intuition for the people who buy their products and services--the folks who really matter. When your organization develops a shared and intuitive vibe for what's going on in the world, you're able to see new opportunities faster than your competitors, long before the rest of us read about it in The Wall Street Journal. You have the courage of your convictions to take a risk on something new. And you have the passion to stick with it, even if it doesn't turn out right the first time.
Make it easy
Make it everyday
Make it experiential
The Who
The What
The How
And she did. In her nine years in the role, 
Hybrid thinking is much more than gathering together a multidisciplinary team. Hybrid thinking is about multidisciplinary people. John Lasseter, the co-founder of Pixar and creator of Toy Story, isn't beloved and admired because he's good at technology. We love him because he effortlessly fuses technology, art, and storytelling. Alton Brown, star of 
Reinvent the core business. No matter how much an industry, product, or sector is booming today, it will either be transformed or demolished tomorrow. Every single company needs to constantly innovate and experiment just to deliver steady results in the face of an ever-shifting market and overwhelming price competition. Such market serenity is an audacious mandate. Just as a graceful swan moving through a pond needs to paddle like hell underwater to maintain momentum, corporations need to do wild stuff below the surface to remain calm above the water line. Five years ago, making mobile phones was a fantastic business to be in. Now margins have eroded, growth is slowing for the first time ever, and only Apple and RIM are making any money. That's why Tero Ojanpera's efforts to transform Nokia into an entertainment company actually matter. He knows Nokia won't remain great by coming up with one or even fifty new phones--it needs to fundamentally reinvent itself. 
Face down an existential threat. It's not that often that companies face obsolescence. The car doesn't replace the horse-and-buggy every day. But when such threats arise, it's time to innovate or die. Think about AT&T when long distance rates collapsed in the face of a deregulated market. Think of Sony when rising labor costs made their Japanese manufacturing base no longer cost-competitive. Think about the struggles of every newspaper in America today. These are the kind of issues that business leaders don't like to deal with but can't afford not to. When faced with such a threat, managers feel a very human need to be the one person who has the answer. It's far more important to frame the question to the rest of the organization and spur hundreds of new ideas and experiments to find a way out of the mess you're in. Amazon's remarkably unflashy Kindle was initially viewed as a dalliance with hardware for the world's biggest book store. It's actually a response to just such a big-picture threat. Newspapers, magazines, and book publishers are all vanishing right now. Wood pulp might be going away as the dominant medium for information, but Amazon's defining what comes next so it will be around as long as reading and writing are.
