Innovation Anchors – How unwitting fixation blocks delivering new ideas to market
April 30, 2010 by Andrew (Drew) · Leave a Comment
What people want isn’t always what they really want.
- Andrew Ellis
Using focus is a powerful technique for getting things done. It narrows our efforts and gives us a specific target to meet. A dancer, who has been asked to spin in place uses a technique called 
“spotting” to provide a stabilizing point of focus. Spotting has several benefits: it keeps a dancer oriented and aware of the movement, direction, and location of their body in space; it can prevent disorientation caused by lack of visual focus; it increases the overall speed of the rotational spin; it can make the spin appear faster than it is; and it also aids in reducing the dizziness associated with spinning. All of which are excellent goals that serve a purpose during particular sections of a dance that require that motion.
Using spotting to anchor yourself at other times while dancing may not be appropriate.
Find a spot then [re]turn to it
The challenge with focus is that once established it can be hard to break off, even when it might be best to turn our attention elsewhere. We have become anchored to an idea, such as, sticking with a new product in the marketplace when all indications are that it will not be successful. Or, always using the same criteria for selecting services to be developed even though market conditions and customer expectations have changed.
For those who seek to innovate this pattern of anchoring is deadly. For the oft-quoted but rarely ascribed comment bears truth of the matter, “if we always do what we have always done, we will always get what we always got.”
Falling in love with your own idea
Often during decision making, people anchor, overly relying on a particular piece of information or a specific value. This anchor then influences the way they account for other variables in the situation, regardless of any specific relationship between them. Usually once the anchor is set there is a bias toward that value. And each of us is prone to this pattern.
In organizations where ideas battle it out for supremacy, we can find ourselves furiously defending our position when the alternative may be better. We have fallen so in love with our own idea that we cannot see the power of another and perhaps we cannot see the power it holds over us.
One recent example of a whole industry becoming anchored (in the belief that the good times would continue to roll) was the financial services industry with regard to credit default swaps. Much has been written on the subject, such as the great post at Psychology Today is by Eric Jaffe. A great line boils down the entire sorry episode quite neatly, “…that our bubble wasn’t just one of bad investing, it was a bubble of bad thinking.” Rouler less bon temps, indeed.
The process of becoming anchored is not hard work either. We fall into anchoring with relative ease. It is one of our shortcuts for managing the large amounts of data with which we have to contend everyday. And once we anchor on a specific data point it is very difficult to change as Dan Ariely describes in his instant classic, Predictably Irrational. Early on in his book Dan describes an experiment with some students in which he asked them to take the last two digits of their social security number and write them beside a list of objects he provided on a sheet of paper. The objects were wine, chocolate, etc. Nothing of special significance. He then asked the students if they would pay more or less than that number (as expressed as whole dollars) and to indicate that on the paper. Finally he asked them to write down what they would be willing to pay for reach object.
We simply keep coming home
The end result of the Ariely experiment was that those who’s social security end numbers were 0-19 offered the lowest price points while those with social security end numbers from 80-99 offered the highest. And everyone in between offered graduating prices! When asked if their social security end numbers had any influence on the prices they offered everyone said absolutely not. Yet those very numbers anchored each group of students as surely as if they had been classified as such from the outset.
The students couldn’t help themselves because they didn’t even know what had occurred.
But even if they had known about the concept of anchoring another classic aspect of this behavior is that even if we do change our perspective and re-orient ourselves we fall back into an anchored state. We switch one anchor for another. Essentially clinging to our need for a mental shortcut.
Fighting the good fight
I am like a book, with pages that have stuck together for want of use: my mind needs unpacking and the truths stored within must be turned over from time to time, to be ready when occasion demands.
- Seneca
For those focused on innovation, willfully introducing changes into existing stable systems, anchoring is one of many behaviors that needs to be addressed. Because at its heart an anchor is a habit we have created for ourselves. Either through repetition or proximity we have placed ourselves under its influence.
To tackle the effects of anchoring you have to call it out. Unless we do highly rational people will make decisions based on the highly illogical. Past experience, ill-considered under present circumstances. According to social psychologist Tom Pyszczynski, “when our livelihoods are threatened we lock into our current mindsets, ignore open discussion, and view those with opposing ideas not as different but as enemies.” When we seek to innovate, to explore new concepts we need to give ourselves the permission to leave old mindsets behind. This takes practice.
One excellent way to practice is the use of design thinking. Design thinking provides a structured way to explore new ideas to pressing challenges in a manner that is low-threat, yet high yield enough to push the envelope. An excellent recent explanation of design thinking as a model and practice comes in IDEO President and CEO Tim Brown’s book, Change By Design. Full disclosure: I now a reseller of a business simulation based on the design thinking approach developed by IDEO and ExperiencePoint. More on that later.
So, when you stop spinning are you dizzy or ready to weigh anchor to focus on the next new thing?
Innovation Psychology – Innovation is a hostage to what we think and feel
April 27, 2010 by Andrew (Drew) · Leave a Comment
No psychologist should pretend to understand what he does not understand… Only fools and charlatans know everything and understand nothing.
- Anton Chekhov
Why explore the impact of psychology on innovation?
Organization psychology examines the relations between the individual and the tasks he or she is posed, between the individual and the surrounding social context in which he or she find themselves, and between the individual and the formal organizational structure. The practice of innovation, the creation and invention of new products, services, business models is very much at the heart of organizations seeking to increase their long-term success. The psychology of organizations plays a primary role in the effectiveness innovation practices and outcomes.
Also, when we consider a psychological framework for innovation it is also vital to include a broader understanding of social psychology. Social psychology is the scientific study of how people’s thoughts, feelings, and behaviors are influenced by others; regardless of whether or not that presence is actual, imagined, or implied. This influence is especially important when we factor in the influences on innovation of open source models which reach beyond the formal boundaries of organizations.
In order to create a wider understanding of the psychology underpinning innovation in the next few weeks and months regular posts will focus on those aspects of psychology that hold sway in the practice of innovation (whether we choose to acknowledge them or not.) Topics will include anchoring, heuristics, and biases, as well as cognition, group dynamics and resilience. The intent is to unlock their power and influence and improve their management in the development of robust innovation cultures.
For an innovation culture to be successfully created and fostered over time, it is a necessity to have a better sense of how people interact and engage. So let’s explore…
Presenting at the ODN – Long Island Annual Conference April 8
March 31, 2010 by Andrew (Drew) · Leave a Comment
The ODN Long Island Chapter is hosting its annual conference on April 8, 2010 at the Marriott Residence Inn, Plainview, NY . The focus is on building stronger, better organizations so that they can not only succeed but thrive as we work our way out of the Great Recession. More details here.
My topic is: Manufacturing Magic – The Hard Work of Creating an Innovation Culture
In the phrase, “we need to be more innovative”, lies a universe of misspent time, energy and political capital. As the popular media love affair with the notion of innovation continues, and leaders begin looking for answers to their businesses’ economic health beyond those actions necessary to survive the Great Recession, many organization development professionals are being tasked with making their organizations “more innovative.” Unfortunately, it seems that the concept of innovation has been coupled with that of creativity and unless we deliver something bright, shiny and magical, we’re going to disappoint.
Creating an innovation culture is not easy. As with change initiatives that have come (and gone) before, it is fraught with miss-comprehensions, false starts and dead ends. With the right effort applied to the appropriate leverage points in your organization, you might just be able to deliver the results you and your leadership seek.
This presentation, backed by current research in innovation best practices, will provide a rapid overview of the different entry points to begin creating an innovation culture. It will highlight key concerns, critical decisions, potential problems and the planning necessary to begin the process of making an innovation culture that fits your organization’s needs and wants. It will also address the business value to be obtained in terms that are clear and meaningful. While creating an innovation culture may be costly and hard work, the key question to ask is – what is the business impact and cost of lack of innovation?
Innovation Culture: Analytical and Intuitive Thinking
March 21, 2010 by Andrew (Drew) · Leave a Comment
Innovation Culture: Analytical and Intuitive Thinking Framing Post
This post is to trigger dialogue on innovation in the moderated Twitter #innochat on Thursday, March 25 at Noon, EST (USA) – all interested parties are welcome to join in. Follow #innochat to join at that time.
Fred Collopy, a professor at the Case Western Reserve University in the Weatherhead School of Management, explored the architect/artist/designer Maya Lin’s design method in a great chapter in the book, Managing as Designing. The quote that struck me as being very apropos for innovators is from Lin, when she stated, “My creative process balances analytical study, based very much on research, with, in the end, a purely intuitive gesture.” I see that this combination of approaches to innovation challenges, marrying the analytical and intuitive, as essential to discovering and creating the best solution to meet the existing need.
Below is a scan of the map that Collopy developed to describe Maya Lin’s process. (Click to enlarge)
An innovation culture is one that strives to create solutions to its most pressing challenges, including (perhaps, especially) those of its clients. It is a robust, searching culture. Intellectually curious and driven to results, it rides a line between the discovery of the new and the direct and specific application of that discovery to meet a present need.
Innovators act differently than analysts or decision-makers. They act differently than artists. Innovators need to borrow from both to be successful. Innovation can be an extreme practice. It tends to call on all of the faculties of those engaged in it. It is driven by the immediate context. It is driven to specific outcomes. It engages the whole person’s mind. It doesn’t reside solely in the domain of analysis or solely in the domain of creativity. It straddles both, or better yet, leans into one or the other as necessary for the task or challenge at hand.
That balance is key.
Questions to ponder:
1. Do you agree that innovation demands both analytical and intuitive thinking? (Why?)
2. How do you combine both of these practices in your innovation work (with clients in particular)?
3. What challenges do you experience in trying to accommodate both ways of thinking (and acting)?
Additional readings in the following links if you’d like to explore further:
A series in John Nofsinger’s blog at Psychology Today on Analytical/Intuitive Thinking
Part I – Determine your thinking process
Part II – Know yourself
Part III – Risk aversion
Part IV – Patience
The home of the website supporting Managing by Design at the Weatherhead School of Management
Innovation Is Not Clockwork – The Challenges of Innovation Systems
February 19, 2010 by Andrew (Drew) · Leave a Comment
A system is a network of interdependent components that work together to try to accomplish the aim of the system. A system must have an aim. Without the aim, there is no system.
- W. Edward Deming
Everything is connected so beware the tragedy of the commons
Previously we addressed the need to create innovation processes that bear the risk of innovation. This boils down to two aphorisms, “if you can’t stand the heat get out of the kitchen” and “it is okay to make mistakes as long as you learn from them.” Not earth-shaking concepts, certainly, but creating an environment within existing business systems that might allow practicing that behavior is a true challenge.
Businesses are complex systems. They are not clockwork mechanisms. They contain myriad subsystems each of which is responsible for producing value through a series of interdependent relationships. This doesn’t even consider the ecosystem within which the business resides; such as, the external competitive market, supply chain and customer segments. The common mistake when attempting to build innovation practices within an enterprise is to “ring-fence” the practice within a functional domain. Relegating innovation to Research & Development or Product Development may provide it with a home but does not necessarily mean it will flourish. This misunderstanding, that innovation is not connected to anything else, almost always backfires as other functional subsystems respond in unanticipated ways.
Ignoring the interconnections between organizational subsystems causes havoc when innovation is demanded of all areas of the business, instead of one function, and the competition for resources becomes fierce. The heart of this conflict is called, “the tragedy of the commons” and it occurs when the subsystems in an organization are placed in a competitive relationship with each other and are forced to act in ways that are destructive to the organization overall. The current push for “innovation everywhere” is a pattern that is reinforcing this dilemma.
For example, without establishing strategic priorities, a consumer products firm I worked with decided that all departments without failure were going to improve their processes. The number of performance improvement projects proliferated tenfold overnight. As a result, project resources were spread so thin nothing was accomplished, but the effort was not canceled until six months had been burned. The result was “initiative fatigue”, a loss of support for organizational leadership, and a drop in market performance. The very opposite of what was desired.
Don’t control the players – change the rules
Is the system going to flatten you out and deny you your humanity, or are you going to be able to make use of the system to the attainment of human purposes?
- Joseph Campbell
If we cannot change the system via simple choices how can we create a better environment for innovation within our organizations? Rather than telling people what to do, guide their behavior by changing business rules within existing business systems that drive the behavior you wish to see.
In his great book, Predictably Irrational, behavioral economist Dan Ariely explores how expectations, emotions, social norms, and other embedded social and psychological forces influence our behavior. One great insight he presents is the way in which the human brain is wired to adopt certain patterns of behavior based on first impressions and decisions. These impressions are imprinted on our brains and govern our approach to similar circumstances. We have “anchored” our experience and even in the face of evidence may act against our own interests because of its influence in our thinking. I also explored this process, which is directly related to priming, in a previous post.
To change this imprinted pattern of thinking it is necessary to change the rules. Luxury goods manufacturers understand this explicitly, as Ariely explains. He notes the case of black pearls which when first introduced to market were a flop. They were gun-metal grey and looked like oversize ball bearings. It took James Assael, an Italian diamond and pearl dealer, to change the rules. He made a deal with Harry Winston to display them in the window of his 5th Avenue jewelry store in Manhattan surrounded by other precious gems. Assael also placed full page advertisements in glossy magazines to promote this new luxury item. Suddenly, black pearls were all the rage. Why? In order to make someone want something he changed the rules and made it scarce. DeBeers has done this for years with diamonds, too.
It is much more effective to change the rules of the game so that it is to most people’s advantage to make choices that are good for the whole system of innovation. What current rules of innovation could you invert, subvert or otherwise transform to create the behavior you’re looking for in your organization?
Foresight always wins and preparation trumps reaction
Everything affects everything else in one way or another. Whether you are aware of that or not does not change the fact that this is what is happening.
- John Woods
Innovative solutions to problems affecting complex systems take time to design, develop, test and implement. If we wait until the problem develops before applying our resources to addressing its root cause, we may be too late to take meaningful action. In the previous post on processes I addressed the notion of anticipatory behavior. That kind of foresight applied to present need can be a powerful tool for ongoing successful innovation.
Too many organizations pull the innovation trigger when faced with a crisis. Be it a market crisis or, more commonly, a product crisis the circumstances reinforce reactive behavior. If not outright panic, this scenario does not foster the use of structured and reasoned thinking to guide decision-making. Instead rapid fire solutions to address the changing conditions on the ground don’t solve the problem in the market and they may make the effects of the problem worse.
Across an organization’s innovation systems, looking ahead to anticipate problems is key. In the current pharmaceutical marketplace, many larger firms were faced with greatly diminished drug development pipelines yet they carry large commercialization operations. Blockbuster drugs are increasingly few and far between. With this realization, the action that most firms have taken is to re-double their development efforts in R&D as well as to identify as many smaller firms with potential marketable drugs as possible to acquire. What if their leadership teams had decided that, rather than reinforce their old business model (shoot for the blockbuster), they were going to anticipate changing market conditions and transform their companies from drug manufacturers to providers of comprehensive health services or another alternative business model. Would they not be better off heading off problems before they disrupt their market (and cash flow) entirely?
Why no great change? Because change is often painful, awkward and a dreadful inconvenience.
Don’t be fooled by system cycles – it’s not the climate it’s the weather
As human beings we love stability. Many of us are simply unable to recognize cyclical patterns around us, especially when they take years to unfold. The boom/bust cycle in the US economy is one such pattern which seems to elude many. This cycle seems to be on a fairly regular 20 year cycle and yet, during the peak (just prior to the bust) many people only see the positive “upside,” regardless of the Cassandras crying in the wilderness about the impending doom. And then the inevitable happens – the dip, slip, or worse yet, crash.
On the other side, when at the bottom of an economic recession, many struggle to see positive signs that economic systems might manifest. Their pessimism is only countered when they feel the positive impacts of the expanding economy directly. This cycle is present all around is. When job categories are oversupplied or undersupplied the negative feedback loops that cause people to go into a particular career usually lag the changing market needs. It’s also present in the climate. With recent record snows on the East Coast of the USA many were heralding the end of global warming. However, it is not case. The weather system is not representative of the climate system, it is a subsystem, and its cycle-time can be measured in months, weeks and days. The climate system is measured in decades, centuries and millennia.
As with the economy, the best time to capture the market is when everyone is contracting. When the present hoopla about “innovation everywhere” dies down those organizations that have embedded innovation into their business systems will find the opportunities ripe for capitalizing on others’ short-term thinking and rapidly fading memories.
Bill Gates’ 2010 Annual Letter focuses on Innovation
January 25, 2010 by Andrew (Drew) · Leave a Comment
Gates: This is my second annual letter. The focus of this year’s letter is innovation and how it can make the difference between a bleak future and a bright one.
2009 was the first year my full-time work was as co-chair of the foundation, along with Melinda and my dad. It’s been an incredible year and I enjoyed having lots of time to meet with the innovators working on some of the world’s most important problems. I got to go out and talk with people making progress in the field, ranging from teachers in North Carolina to health workers fighting polio in India to dairy farmers in Kenya. Seeing the work firsthand reminds me of how urgent the needs are as well as how challenging it is to get all the right pieces to come together. I love my new job and feel lucky to get to focus my time on these problems. The full letter is here.
Eyes on the Prize – In a CoIN a flexible approach to changing conditions means more wins
December 7, 2009 by Andrew (Drew) · Leave a Comment
In his fascinating research on collaborative innovation Peter Gloor, a Research Scientist at MIT’s Sloan School for Management Center for Collective Intelligence, identified a model he termed CoIN for, Collaborative Innovation Networks. He first named this model in the popular press in his book, Swarm Creativity: Competitive Advantage through Collaborative Innovation Networks. His stated goal was to make CoIN’s the widespread model for organized innovation. A CoIN is a team of self-motivated people linked virtually that shares a collective vision, enabled by technology to collaborate in achieving a common mission (a specific innovation) by sharing ideas, information, and work.
Now for those business leaders sold on the concept, their primary concern may be that with limited resources they now feel that they must invest in creating CoIN’s across their organizations to create or sustain a competitive. This is not the case.
CoIN’s already exist across most organizations. What needs to take place is their rapid identification and ongoing nourishment. In order to achieve this we need to prime the organization to be receptive to fluid teams focused on delivering a specific value. The way these teams are buoyed is through shared context – they need to share a vision, mission, purpose that draws them together and they needs an organization that fosters the identification of those things and supports their pursuit.
Organizations improving their culture of innovation when utilizing CoINs create virtuous cycles of success. The shared victories of the teams over problems become their own reward. This environment of collaboration focused on innovation creates a collective efficiency that is self-perpetuating.
“When a company is growing and profitable, we tend to infer that it has a brilliant strategy, a visionary CEO, motivated people, and a vibrant culture. When performance falters, we’re quick to say the strategy was misguided, the CEO became arrogant, the people were complacent, and the culture stodgy.” – from The Halo Effect
One of the inherent pitfalls of CoINs (when they are working) is the the impact of the Halo Effect if they are not occasionally disrupted. The Halo Effect, based on the work of Phil Rosenzweig, highlights the fallacy of so much of the research of day which emphasizes the repetition of “best practices” and our tendency to make specific evaluations of performance based on an elemental impression. If a CoIN falls into a pattern of attempting to repeat it’s success it may make choices about it’s approach to innovation that are not based on the shifting business context.
The Halo Effect highlights the fact that performance is relative, not absolute. Based on this understanding it follows that the way in which companies succeed is when they make choices and do things differently than rivals. In essence it moves from a world geared toward management by via benchmarks and best practices to one which is governed by making choices under conditions of uncertainty. And this is where CoINs come into their own – they create a fluid platform for innovation that can respond effectively to changing conditions.
What this demands of leadership and innovation teams is a much more rigorous approach to reward-seeking and risk-mitigating behavior. The Halo Effect shifts our thinking about performance from one that looks for a formula for success, toward one that sees the world in terms of probabilities and possibilities. Innovation leadership is about making choices, under uncertainty, that have the best chance to raise the probabilities of success, while never imagining that success can be predictably achieved. Even good decisions may lead to unfavorable outcomes, but that doesn’t mean the decision was wrong. It simply provides an opportunity for the innovation team to make a new decision and find a new path to success.
Brand Complacency – Why User Experience (UX) Designers must look to their cultural impact
December 1, 2009 by Andrew (Drew) · Leave a Comment
If there is a future for designers and marketers in big business, it lies not in brand, nor in “UX”, nor in any colorful way of framing total control over a consumer, such as “brand equity”, “brand loyalty”, the “end to end customer journey”, or “experience ownership”. It lies instead in encouraging behavioral change and explicitly shaping culture in a positive and lasting way…A commodity is something that has no qualitative differentiation. Mass production drives commoditization within a particular product line, while the traditional “bunch and swarm” mentality of the marketplace drives commoditization across product lines. A desire to create a new set of interactions is an urge to escape this push towards sameness. Innovation is a business goal to produce products that have qualitative differentiation, and there are various forms of innovation – such as disruptive innovation – which are intended to produce massive qualitative differentiation. – see more of the Johny Holland Magazine
I Am Just Like You – Bob Sutton on impediments to self-awareness
November 16, 2009 by Andrew (Drew) · Leave a Comment
Bob Sutton dips into, “David Dunning’s book Self-Insight, which presents a compelling case that there are numerous impediments to self-awareness and that many of these roadblocks are mighty difficult to overcome. I am now on the last chapter, which contains some interesting ideas about how to increase our awareness of how skilled or unskilled we might be at things and our awareness of how others see us.” Bob’s full blog post is here.
Twitter: DrewCM
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