Chief Architect Officer – The role of the innovators

“Study the science of art. Study the art of science. Develop your senses, especially learn how to see. Realize that everything connects to everything else.”

Leonardo Da Vinci

I was convinced that I would become an Architect since I was little. I loved how they created beautiful structures with a strong purpose out of nothing, just from the ground.

But my father was an architect and he advised me that in Spain, the construction bubble would eventually explode and working as an architect wouldn’t be great anymore. So I studied Industrial Engineering, joining the club of the “frustrated architects”. 😉

But, hey, hold on !!! I soon discovered that as an Engineer, I could work as a Business Consultant, which is a mixture of a Doctor and an Architect, diagnosing where the issues in a company came from and how to build processes, organizations and tools that eventually could make things get better for those corporations.

Just talking about Architecture, I remember my father saying that the most complicated work when building is designing effective joints. No matter how well designed your construction is, if you are not able to plan successful joints between different elements of the building, soon water would penetrate, or cracking on the surface would happen.

And the same principle applies to many other areas in life:

  • Athletes often get their joints injured (e.g. knee, elbow, wrist, ankle).
  • Oxidation always happens first on the welding area of two metal sections.
  • Transmission bands were among the first severe damages in old cars.
  • Water always becomes turbulent when two streams join (e.g. two rivers).
  • Infections penetrate through open wounds.

Same as in life, any business is also affected by the laws of physics. Areas where two colliding forces join, are always the weakest:

  • Strategy execution often fails when middle management is not skilled, knowledgeable or empowered to transmit the vision from C-level to the workforce.
  • In mergers and acquisitions, when two different business cultures collide, chances are high that the new corporation won’t end up beautifully.
  • Silos and divisions between different business units are normally driving overall corporate failure.
  • Integrations and interfaces are the weakest elements in any IT systems project.

In these circumstances, I’ve always seen Innovators as “architects building bridges and removing borders”. They connect the dots, they make people from different disciplines work together, they hack siloed cultures, they break barriers, they bring together knowledge from different areas, they connect with the external ecosystem, they remove friction here and there.

Most of the worldwide challenges ahead are also a matter of how to manage potentially painful transitions, how to remove borders and build effective joins or elegant bridges. COVID has accelerated many paradigmatic changes, but underlying issue of how to solve transitions is still there:

  • Energetic Transition is about how to make affordable and plausible the renewable sources while avoiding a sharp decline in traditional energies that could damage economies and leave them without time to adapt to the new normal.
  • Autonomous vehicles biggest challenge is how to make standard cars and unmanned automobiles coexist while the transition happens.
  • Hybrid workplaces and new ways of working success will very much depend on how effective connection and collaboration between colleagues is wired.

Successful companies will be those that will manage change by embracing ecosystems (customers, suppliers, distributors, competitors, government agencies,…), building bridges between different  geographies, teams and cultures.

The innovators will be the new “Chief Architect Officers”, but instead of using bricks and mortar, they will use knowledge and talent.

Airline Innovation Talk with Alberto Terol Conthe, Head of Customer Experience Design and Development at Iberia

( This is a transcript of the podcast from Diggintravel, by Iztok Franko https://diggintravel.com/airline-innovation-talks-iberia/ )

«What does windsurfing have to do with Marketing and Innovation?»

My friend Iztok Franko started his last podcast with quite an eclectic and inspiring question.

I had a great experience talking to him about my vision as a #Marketing#Strategy and #Innovation proffesional.

If you want to listen to it, here is the link: https://lnkd.in/guENe96M

Some frameworks that we were discussing were:

* Effectiveness / Efficiency
* Real / Win / Worth
* Design the right things / Design things right
* Value creation / Value delivery
* Experimentation / Exploitation

Thanks a lot, Iztok, for challenging me with such though provoking questions

*******************************

“Iztok, I love your new podcast series. You had an airline digital talk. Then you did an airline data talk. What’s next?”

This is what somebody asked me recently on LinkedIn. For me, the next step was obvious: next in line was an airline innovation talk.

Why an airline innovation talk? Because recently when I was thinking about innovative solutions, I started to think, where does innovation really happen? Can you point a finger at one department, one area in a company? Are innovation departments the solution?

In my opinion, innovation happens when you combine insights from different areas and different people: data and analytics, digital experience, UX/UI, experimentation, customer research, customer service, product design, etc. To do innovative things, one needs to know all these areas and understand how they fit together. You need to know how to leverage insights from these areas to understand your customer’s pain points and build innovative solutions to address those needs. And this is what marketing should be all about: how to provide value for your customers.

As I was thinking about all these things, I remembered a great post about marketing and innovation I read a while ago. The article was titled “Marketing Hero“, and it was written by Alberto Terol Conthe. So, the guest for our airline innovation talk was a no-brainer.

Airline Innovation Talk with Alberto Terol Conthe, Head of Customer Experience Design and Development at Iberia

Marketing (Value) + Innovation (Creation)  = Value Creation

Alberto opened his article with one of my favorite quotes by Peter Drucker: “Business has only two basic functions, marketing and innovation.” So, my first question for him was, how do marketing and innovation fit together?

I always have thought that they are all together. I’m a marketeer. I started as a marketeer at 3M. Previously I was working in Accenture consultancy as well. But I would say my main business school was marketing, and then moving into innovation, I think they are very close fields. I tend to think marketing is about value, is about understanding customer needs. It is part of the discovery, the research, and understanding the pains and gains of the customer, and innovation is more about creation – bringing some new ways of doing things and new processes and new technologies.

If you put them all together – value creation, marketing, and innovation – they go so well together. It’s turning an idea based on some customer pain or gain into a solution and executing it and providing value from the customer perspective. So they go together. And I think the skills of good marketeers and good innovative people are quite similar. They are around curiosity, questioning everything, bringing the what and the how and the when and the why to every conversation.

Alberto mentioned that execution is an important element of marketing. Recognizing your customer pain points and figuring out innovative solutions is not enough.

I think a fundamental element, as well, of marketing and innovation is the execution. I have had a lot of discussions with certain designers and people from innovation like, “We created this beautiful PPT, and now it’s a matter of the execution team to execute.” My point is that unless a product or a service is crafted and then deployed into the market and it’s being consumed by a customer, there is no success at all. It’s just an idea.

In Successful Companies, Innovation Sits Very Close to the Business

The way Alberto talked about marketing and innovation made a lot of sense to me. But what I see in most companies, especially the big ones, is that marketing is still mostly about advertising – or, in the digital marketing case, it’s mostly about taking care of the website, ecommerce, and digital advertising. Why do we often see a separate innovation department?

I think marketing is very wide. My background is product marketing. You mentioned all the branding and channel management and stuff, and that’s part of marketing. But maybe what I would compare more between marketing and innovation is product management. There, I think it’s very close to each other.

Another example I would bring to you is that I think innovation teams in large companies sometimes are located in the HR people area because of all the change management needed and all the transformation efforts and so on. I think sometimes, very frequently – and I think nowadays even more frequently – they belong to the IT and technical organization, because it’s very much leveraging technology.

Alberto has recognized a pattern when it comes to innovative companies:

The examples I have seen as more successful normally are those in which these companies put the innovation function – the initial innovation function, because I think it has to embrace the whole organization – but let’s say the team mobilizing innovation from the very beginning sits very close to the business. Therefore, again, I see the link between marketing – which for me is value creation and value delivery, which is basically business – very much related to innovation.

Doing The Right Things Vs. Doing Things Right

One other part of Alberto’s article that I really liked was the distinction between two key areas of marketing. One is execution; Alberto calls it “doing things right.” The other part is more about forward-thinking, strategic foresight, and business modeling, and that’s what he calls “doing the right things.”

That’s a sentence [distinction] that we use very much in our service design team. I think both steps are needed. It reminds me a little bit of the Double Diamond in service design, the divergence and then the convergence. I think these two elements – designing the right thing, for me it belongs more to marketing. It’s discovering the underlying customer need, the pain, the job to be done, and so on. It’s designing the right thing.

Airline innovation and marketing framework

Source: Alberto Terol Conthe (LinkedIn)

When it comes to figuring out what the right thing is, Alberto mentioned an interesting “Real, Win, Worth” framework.

In 3M we had a heuristic that we used very frequently in designing the right thing, which is Real, Win, Worth. Every time we wanted to address if an opportunity was worth it for 3M, we would first envision if it was real, if there was a market, if there was a customer pain or need to be addressed. Is this opportunity real? The second one was, can we win? Do we have the capabilities in our company to achieve a successful business out of this opportunity? And the third one would be worth. Is it worth it, or would it be so costly or I would have to hire talent that I don’t have? Okay, so there’s opportunity, we could potentially win it, but it’s not worth it. Or it would not support our strategy or whatever. So for me, that’s the designing the right thing – deciding what you’re going to design and what’s out of scope as well, which is also very important.

And then we moved into designing things right. There is more the world of service design, designing a product and service that matches those needs that you have discovered in the designing the right thing. It has much more to do with UX, UI, choosing the right platform for delivering that product or service, choosing the right partners. It’s more the delivery part of the value. You can be very strong in value creation, but you can be very poor in value delivery. Again, execution becomes fundamental in the second part. We always, as service designers, try to keep both areas balanced – designing the right things, choosing the right fights to fight, but then deciding something that was worth it for the customer and appealing.

Top-Down or Bottom-Up?

To me, this concept of doing the right things and doing things right was really interesting. My background, my experience, and also our Diggintravel Airline Digital Optimization research is more about doing things right – how to be agile, how to do growth marketing, how to do digital optimization and conversion optimization. But if you do systematic digital optimization right, with agile loops of analyzing customer needs, managing data, doing structured analytics, trying to find solutions and designing digital products to address those needs, you’re basically moving up to doing the right thing. So, I asked Alberto: how are these things connected?

It’s iterative. You could eventually start defining an arena that you want to fight for. That’s the design the right thing. Then you move into design things right, and then you discover that it’s impossible to deliver value in that field. Then you may decide to reassess if you are fighting for the right opportunity, or you could move into an adjacent opportunity or so on.

I think it’s an iterative process, and moreover, I think when you launch a product – and this is something we very often forget as service designers; we forget about the product when it’s being delivered. I think especially in those first weeks and months and even years after the launch, they should be in hyper-care, and we should be reconsidering every time, every week, following the KPIs, the metrics, and improving the product.

Alberto recognizes the value of applying the principles of experimentation and being agile to the overall business model and overall products, not just the digital side.

I had once a boss that always came with the question, “Are you 100% sure that this product will be successful?” I said, “Come on, I’m not, but this is the Pareto principle. I’m pretty sure that’s the case. I would say I’m 80% confident that it’s the right product for the right market segment. But let’s launch and let’s learn on the go and adjust and adapt.” So I’m very fond of experimentation and agile launching of new products. Otherwise, it’s paralysis by analysis.

Finding new solutions versus optimizing existing ones

A systematic loop of digital optimization is great for incremental improvement, but you have to know whether you’re optimizing the right things.

I think the other element – because you start with A/B testing and improving and these incremental improvements – the reason I was mentioning that designing the right thing is so important is because very often, especially these days, there’s obsession with efficiency. “We have to deliver efficiency gains.” My point is that there’s nothing so useless as doing something very efficiently which is not usable at all, or that we shouldn’t have done at all. We can be executing something beautifully, it’s very efficient, but there is no customer need or there is no market to be addressed. I think therefore we need to keep balance on both aspects.

But experimentation, rapid prototyping and so on – in fact, we had a discussion earlier this week about prototyping. We were discussing research and we want customer research in which we would envision what customers want for a specific product segment. My point was that customers would never come with a solution. That’s the job of the product owner, of the marketeer. Eventually, by prototyping and showing them some mockups, we can show them, “This is the size and the color and the shape that this would have. Are we working in the right direction, or is this something that doesn’t resonate with you at all?” I think all this rapid experimentation makes perfect sense with any product launch.

Connection between design thinking and experimentation

Source: Visual Summary of “Testing Business Ideas” by David J Bland and Alex Osterwalder

Innovation Is More About Attitude and Culture Than It Is About Skills

One of the key insights Alberto shared in our airline innovation talk was in regard to his key learnings. The first thing he mentioned was attitude:

I thought that innovation was more about skills. I think over the years, I’m discovering that it’s far more about attitude. That’s the approach when I’ve been hiring marketeers in 3M, or now service designers at Iberia: bringing people with curiosity, with this sense of observation, with customer obsession – and when I say customer obsession, it’s spending a lot of hours with customers, interacting with them. Not focus groups, which is a controlled environment, but observing customers dealing with our products and services.

Then Alberto mentioned another interesting aspect of innovation and culture.

I would say another totally different topic which is relevant for progressing with innovation in companies is how managers get measured. Maybe in the vision statement in a company, it says that “we would like to be the most innovative.” Okay, let’s go into the KPIs that managers are using. Are they being measured by the business as usual or by exploring the next big thing? Very often, that tells you the culture of innovation which is happening in the company.

I mentioned culture. For example, something I loved about the American approach to innovation – and I experienced that in 3M, but I’ve been talking with friends from HP, Salesforce – I think in American corporations, there’s emotional safety within the teams for putting some time for exploring and trying to discover things out of business as usual. The famous rule of the 15%. There are many different mechanisms for making the teams work on something which is enriching the total knowledge within the company, and they can openly share their findings, and mistakes are allowed and so on. That cultural aspect is fundamental as well.

Sales Velocity and your Innovation Funnel

“Life is like a ten speed bicycle. Most of us have gears we never use”

Charles Schulz

I remember back in my MBA days when our IE Business School professor Rafael Pampillón insisted in the enormous difference between “flow variables” and “stock variables” in Macroeconomy.

While “flow variable” is a variable whose value depends on a period of time rather than an instant (example being the gross domestic product), a “stock variable” is a variable whose value depends on an instant rather than on a period of time (example being foreign debts).

Managers and Executives frequently confuse the two different variables. A quite relevant difference is that while you can “pile” stock variables, flow variables are gone as you enter into a new accounting period of time.

In the sales world, every January you start from scratch. Well, you can argue that you have invested in creating relationships and some assets that eventually will let you grow the next year faster, but the truth is that you need to “pile” again your new sales quota in order to hit your numbers.

Old school sales managers kept some deals “disguised” in December in order to bring them up new and shiny when the new sales year started in January, which was something quite disturbing for me in my early days as a Marketing Manager at 3M, as I was used to go full speed and I couldn’t understand why they didn’t want to play big in December.

So the question is: “how can you try to avoid the artificial interruption of sales cycles and measure results not based on quota attainment during a specific period but based on the health of the opportunities pipeline?» or in other words, how can you use smart flow variables to “stock” sales capabilities?

Back in the Sales world when I was managing a B2B business at 3M, we introduced the concept “Sales Velocity” in our sales enablement tools for sales reps. It was very relevant, as it allowed sales managers to understand the speed at which they were creating new business for 3M.

Sales Velocity is defined as:

And it measures the speed at which you are creating new business and therefore the health of your pipeline. More important, it shows how to drive that pipeline by:

  • Increasing the number of active leads
  • Increasing the average deal size
  • Improving the conversion rate
  • Reducing the conversion time

Now in my current role as Incremental Innovation Lead for Iberia Airlines, I tend to see Sales and Innovation pipelines in quite a similar way. Innovation requires betting on a number of initiatives with the hope they will be successful and fundamentally change the business, which is not far from the Sales Rep. taking care and nurturing his key accounts.

So why are Innovation areas frequently not able to traction real impact initiatives?. Well, let’s go back to the “Sales Velocity” concept and let’s make an analogy with the Innovation world:

ACTIVE LEADS = INNOVATION INNITIATIVES

Are you capable of covering the number of Innovation initiatives that are needed based on your teams bandwidth? Are you able to traction Innovation initiatives across every area within the company or you just left some of them unexplored because they are just impossible to cover with the team you have?

DEAL SIZE = BUSINESS CASE

Are you betting on the right projects or are you focusing on those that you fall in love with although they can’t deliver a significant economic impact? Are you supporting those areas in the company that “shout louder” to capture your attention or do you have a strategic process to cherry pick those which make real sense for the corporation?

CONVERSION RATE = IMPLEMENTATION CAPABILITIES

Do you have the right IT capabilities to deliver on the business commitment that you make? Are the systems prepared for the integrations which are needed? Do you have the budget, the Capex, the Opex to support those implementations?

CONVERSION TIME = TIME TO MARKET

Are your internal processes fast enough to deliver according to market needs or are you always one step behind? Are you lost in bureaucracy or are your Innovation squads empowered for fast decision making?

Speed is very often confronted with Control, supported by the famous quote from Mario Andretti “if everything seems under control, you are not going fast enough”, and adopted by Silicon Valley executives for a number of years (“move fast and break things” by Zuckerberg). But that is a very limited vision of speed.

When the right processes to orchestrate Sales Funnels or Innovation Pipelines are implemented, Speed and Control can go together, and that is in my view, the only sustainable way to be in business. Be in charge of your Innovation Funnel and the rest will follow…

Un caballo en el espacio

“If you want something new, you have to stop doing something old.” Peter F. Drucker

La historia de la Carrera Espacial está llena de anécdotas simpáticas en el ámbito de la gestión de la Innovación. Una de las que más me gusta es la de la anchura de los cohetes secundarios de los transbordadores espaciales, y que ilustra perfectamente como el desarrollo de nuevos productos y servicios es a menudo esclavo de decisiones tomadas con mucha anterioridad y que condicionan absolutamente el diseño.

El conjunto de un transbordador espacial está formado por una lanzadera (el habitáculo donde viajan los astronautas y la carga), un depósito de combustible principal, y dos cohetes secundarios que lo impulsan en el momento inicial del lanzamiento. Estos cohetes secundarios eran fabricados en sus orígenes por la empresa Thiokol, en el estado de Utah, y debían viajar por carretera hasta Cabo Cañaveral.

La carretera que une Utah con Florida atraviesa una serie de túneles en las Montañas Rocosas, construidos en la época de la expansión del ferrocarril en Estados Unidos durante la segunda mitad del siglo XIX. Durante la construcción de estas vías férreas, se tomó como referencia el ancho estándar del ferrocarril británico, que era de 4 pies y 8,5 pulgadas de ancho. A su vez, esta anchura venía heredada de los diseños de Stephenson basados en los carros empleados en la minería inglesa, que iban de los 1,4 a los 1,5 metros aproximadamente de ancho. ¿Y de dónde venía esa anchura empleada en las explotaciones mineras? Pues de los primeros diseños romanos y antes griegos, que ya en el siglo VI a.C. empleaban vagones para extraer el mineral en Corinto.

¿Y por qué las civilizaciones romana y antes griega utilizaron esa medida estándar? Como en casi todos los diseños primitivos, la usabilidad jugaba un papel clave, y en el momento en el que se juntaron dos animales de carga mediante un yugo para poder arrastrar un carro, quedó fijada la anchura estándar de todos los medios de transporte futuros. Los 1,4 metros de separación, garantizaban que las ruedas de los carros rodaran por el exterior de las pisadas de los animales evitando su desestabilización, y al mismo tiempo eran lo suficientemente estrechos como para no dificultar el cruce en los caminos.

Así es, la anchura de la grupa de dos caballos o dos bueyes marcaría para siempre el diseño de las vías de transporte de mercancías, incluyendo el ancho de los cohetes secundarios de los transbordadores espaciales que debían de ser transportados de Utah a Florida. Es curioso pensar en cientos de ingenieros de la NASA diseñando los vehículos más sofisticados que nos llevarían como civilización al espacio, y que uno de los condicionantes fundamentales de su diseño fuera lo que miden dos animales de carga puestos uno junto al otro.

Reflexionaba sobre este y otros asuntos en relación a las medidas que los gobiernos están tomando para enfrentar la segunda ola de contagios del COVID19 y cómo en vez de aprender de la primera ola y tomar decisiones diferentes y más adecuadas a la sociedad de la información en la que vivimos, retomamos el viajo camino del confinamiento total, que es más propio de la época de la peste medieval que de la época en la que vivimos. En vez de diseñar nuevas vías, retomamos la “calzada romana” que ya transitamos en los meses de Marzo a Mayo.

Aquellos que nos dedicamos en cuerpo y alma a la innovación, debemos estar atentos y no caer en esa tendencia tan humana a recorrer las mismas carreteras que ya hicimos en el pasado y en otras circunstancias.

A este fenómeno de basar decisiones actuales en decisiones anteriores en el curso de la historia se le denomina Path dependece y tiene que ver con la influencia que tiene en la toma de decisiones actuales, la experiencia previa y cómo fue la toma de decisiones en otras circunstancias (que incluso pueden haber dejado de ser relevantes).

Un ejemplo clásico de esta dependencia estudiado en todas las escuelas de negocio, fue el desarrollo del videocassette en los años 70. Dos efectos fundamentales diferentes del criterio de la excelencia del producto impulsaron que la industria adoptara el estándar VHS frente al BETA, cuya tecnología era superior (calidad de imagen, sonido y velocidad de grabación):

Network effect: la apuesta de JVC por licenciar el estándar VHS a cualquier fabricante de reproductores de vídeo, unido a su inferior precio, permitió una velocidad de adopción más rápida que el estándar BETA impulsado por Sony. Esa expansión generaba una serie de externalidades positivas para el usuario al comprar un reproductor VHS, ya que podía intercambiar películas con más amigos y encontraba mayor facilidad para alquilarlas en el vídeoclub. Ese “efecto red” derivado de la estrategia comercial de JVC, probablemente fue el factor desencadenante de esa “path dependence” que supuso finalmente la desaparición de BETA (de poseer el 100% del mercado en 1975 a ser discontinuado en 1988).

Bandwagon effect: los fabricantes de reproductores de vídeo se fueron “sumando al carro” de VHS tomando la decisión en cascada de adoptar esa tecnología sabiéndola “caballo ganador”. Desde el punto de vista de la psicología cognitiva, resulta mucho más sencillo tomar una decisión que se observa que han tomado otros antes, incluso aunque se dude de que sea la correcta (“¿dónde va Vicente?, donde va la gente”).

Algunos autores hablan de una tercera palanca, que fue la decisión de Sony de no licenciar su solución BETA a empresas de la industria de la pornografía, limitando la adopción de su formato (este última palanca, vamos a dejarla en el terreno de la leyenda 😉 ).

Volviendo al ámbito de la Innovación, esta “Path dependency” y sus palancas “Network effect” y “Bandwagon effect” condicionan muchos fenómenos, suponiendo grandes barreras al desarrollo de nuevos productos y servicios, como por ejemplo:

ADOPCIÓN DE TECNOLOGÍA NO ÓPTIMA: Casos como el de VHS hay muchos, por ejemplo la estandarización del teclado “QWERTY” en nuestros ordenadores, que lejos de ser el más rápido, su diseño buscaba proactivamente que fuera más lento para evitar que las máquinas de escribir se atascaran.

PERSISTENCIA DE TECNOLOGÍA LEGACY: Grandes sistemas de información que en su día cumplieron una misión crítica, quedan obsoletos y aun así no son reemplazados sino “parcheados” con n-cientos evolutivos. Las barreras de salida de esos sistemas son tan grandes que nunca se encuentra la oportunidad adecuada para adoptar una política “zero base” y construir un sistema adecuado a las circunstancias actuales. Además, cada vez la decisión de salir de esa espiral descendente es más compleja, porque como dicen los americanos ya se ha “arrojado mucho dinero bueno sobre dinero malo” y ningún ejecutivo quiere reconocer que esos costes hundidos no deberían condicionar la decisión a tomar a fecha de hoy.

“FEATURITIS” y “EFECTO RATCHET: Ocurre cuando un responsable de producto no es capaz de ir eliminando “features” (funcionalidad) a su producto a medida que va incorporando otras nuevas, con el temor de que algún usuario se sienta decepcionado por esa utilidad que algún día pudo darle. A veces ocurre porque el responsable del lanzamiento cae presa de los intereses de diferentes áreas corporativas y trata de elaborar un producto que satisfaga a todos, con el resultado de que no satisface a ninguno. Al final, el producto es una especie de Frankenstein o “feature creep” que limita la usabilidad y lo desposiciona en el mercado. Incluir esa funcionalidad pudo ser lo adecuado en el pasado, pero con cada nuevo lanzamiento habría que replantearse si lo sigue siendo (lo que se conoce como “pruning”).

Sin embargo, a veces los efectos de esa “cadena de decisiones” pasadas tiene efectos muy positivos en el ámbito de la Innovación:

ATRACCIÓN DEL TALENTO: Al diseñador de productos y servicios brillante, le interesará trabajar en proyectos y organizaciones con equipos potentes en los que pueda aprender. Tomar por lo tanto decisiones de contratación de “high-flyers” en los inicios puede suponer crear un polo de atracción de talento posterior muy relevante, como ocurre en la actualidad con proyectos de emprendimiento. El halo de excelencia de esos primeros fichajes atrae como moscas a la miel a profesionales de primer órden, aunque el éxito de esa start-up genere mucha incertidumbre. Un efecto similar sucede en la creación de polos de tecnología como Silicon Valley alrededor de la Universidad de Standford.

MARIPOSAS DE LA INNOVACIÓN: Las “Innovation Butterflyes” ocurren, conforme a la teoría del “efecto mariposa”, cuando decisiones iniciales desencadenan resultados inesperados en cadena. Algunas compañías como 3M han explotado el potencial de estas “mariposas” con magníficos resultados, pivotando tecnologías que inicialmente surgieron en un mercado y resolviendo dolores de clientes en otras industrias. Estos fenómenos se entienden mal con corrientes de gestión basadas en el control y en la planificación financiera, donde cada mínimo esfuerzo en innovación debe ir encaminado a un retorno concreto, medible y cierto por adelantado.

Personalmente me aplico un principio en la gestión en áreas de innovación que me permite reflexionar y en su caso escapar del “Path dependence” y consiste en aplicarse lo que el genial Mark Twain pregonaba: “Cada vez que te encuentres del lado de la mayoría, es tiempo de hacer una pausa y reflexionar”. Me permite salir de la corriente de pensamiento dominante y no caer en el “pensamiento grupal”, aunque ya te adelanto amigo lector, que a menudo genera profundo desgaste y grandes decepciones. Ser un libre pensador no es cómodo, pero ¿quién dijo que innovar fuera fácil?

My view on 3M as an Innovation Powerhouse

Having worked for 3M for most of my professional life, transitioning from Product Design to Service Design almost a couple of years ago was a pivoting time in my life.

Ever since then, I’ve been reflecting on the skills, methodology and attitude that 3M taught me and helped me so much during my transition to Iberia Airlines.

Some days ago, I decided to merge the talent of my current Service Design team at Iberia with the vast Innovation knowledge from my former colleagues at 3M by visiting the 3M Innovation Center in Madrid. It was a highly pleasant evening and it was beautiful to see that, when in 3M facilities, I still feel at home.

The following lines are a distilled and very personal view on what makes 3M such a massively powerful innovation engine. Why has 3M been an Innovation paradigm for so many years?

1.     Embrace failing as part of succeeding

Nowadays this attitude is a kind of mainstream mantra. It’s always quoted in “manager wannabes” airport business books. But when it comes to real business life, very few companies stay strong holding this principle.

3M has been one of those companies from the very beginning. One of the most influential 3M executives, William McKnight, has a number of quotes that are not surprising when formulated by modern executives like Steve Jobs but were absolutely innovative at McKnites time back in the 50s.

“As our business grows, it becomes increasingly necessary to delegate responsibility and to encourage men and women to exercise their initiative. This requires considerable tolerance. Those men and women, to whom we delegate authority and responsibility, if they are good people, are going to want to do their jobs in their own way. Mistakes will be made. But if a person is essentially right, the mistakes he or she makes are not as serious in the long run as the mistakes management will make if it undertakes to tell those in authority exactly how they must do their jobs. Management that is destructively critical when mistakes are made kills initiative. And it’s essential that we have many people with initiative if we are to continue to grow.”

Back in my 3M days, I have to say I never felt scared of committing any mistake as empowerment from senior managers was always a key cultural pillar.

2.     Avoid the “silo mentality”. You are as strong as your network is

Back in 1968 Dr. Spencer Silver was trying to find a super powerful acrylic adhesive without much success. But he managed to understand the quite unique characteristics of the adhesive he had just created: it left very few residues and it was pressure-sensitive.

Years later, another 3M researcher called Art Fry thought about Dr. Silver adhesive when trying to attach the bookmarks he used for guiding himself along with his hymnal while singing in the church choir. Post-It had been accidentally invented.

Shouldn’t Silver and Fry been in contact nor their investigations available to each other, Post-It would have never been conceptualized and this iconic product from the ’80s and ’90s wouldn’t have existed.

During my time at 3M, I always felt supported by a massive network of colleagues just at my fingertips. It was a matter of calling or emailing them and I always got some kind of help.

3.     Ensure pivoting is in your DNA

3M is the acronym for “Minnesota Mining Manufacturing”. The company started as a mining corporation, exploiting corundum. But soon the founders discovered that the mineral coming out of the mine was of much less quality and decided to pivot and produce sanding paper. Sanding was at that time dangerous as the particles created were inhaled by the workers. So 3M invented “Wetordry”, a waterproof paper that eliminated dust from the sanding process. The mineral that was not valuable from a mining perspective had become a key ingredient of the sanding paper industry.

A key lesson from this 3M beginning is the power of pivoting on your core strengths and embrace change when needed.

Ever since then the story of 3M if full of key investments and exits from businesses that were not fully aligned with core competencies.

While in 3M, I had the opportunity to reinvent myself a number of times: businesses, geographies, roles and responsibilities. Every 2-3 years a beautiful opportunity emerged and pivoting was possible.

4.     Understand that there is no Innovation without customer demand

A former Sales Manager at 3M always said that “the best product sample is the one a customer buys” meaning that there is no way to understand customer propensity to buying by giving free products to them. Or like the old Marketing quote says “don’t tell me what you would buy, just show me your ticket”.

Customers lie every time. Sometimes intentionally and sometimes without purpose but just because we are all biased when confronting a “would you buy this?” type of question during customer research.

The only way to check customer demand is in real life, and 3M always had very clear that without customer demand there is no valuable innovation.

Coming back to the Post-It story, a very clever movement that Art Fry made was probing his boss that there was a real demand for his product. He gave free Post-It samples to assistants in several business units and when they were running out of samples they came back to Fry asking for some more. He then told them to ask their managers for the product and that way he probed the company that customers were really willing to use the new product.

When working at 3M for every new product launch I would build the RWW Real-Win-Worth model while analyzing the P&L potential impact by answering these questions: Is the opportunity Real? Can 3M win with it vs. competitors? Would it be worth it in terms of profit?

5.     Co-create with customers all the time

Customer co-creation is now mainstream within the Service Design playbook but back in the 30s of the twentieth century was something absolutely new.

Most of the more powerful 3M inventions were conceived by working hand to hand with real users, shadowing them while they were performing their daily tasks and performing ethnographic research (e.g.: masking paper, Scotch tape,…).

There is no lab work powerful enough to replicate the real working conditions of a customer so observation in real life becomes crucial.

During my 13 years at 3M I estimate I have visited more than 500 customers from many industries (automotive, retail, industrial, electronics, public health,…) and countries. Every day in the field was a massive creativity boost.

6.     Embrace a full international vision

Most companies claim to have an international vision, but very few manage to create a full international culture embracing at the same time the key central values of the corporation and the local uniqueness.

As markets and product categories evolve at a worldwide scale, leveraging the power of an international network (labs in more than 36 countries, business in more than 60 countries) is mandatory and facilitates anticipating megatrends and attending global customers demanding a unique value proposition independently from the business site.

Regionalization at 3M has occurred a number of times, adapting the organizational design to the geographies that make more sense from a business perspective.

When traveling around different subsidiaries, I always felt the regional flavor while acknowledging a unique culture of innovation and management.

7.     Invest in Technology Platforms

3M devotes around 6% of the Sales to R&D (1.7 $B), which is not much comparing to other well-known innovation companies. Why this limited investment result in more than 3.000 new patents every year and new products accounting for more than 40% of the total revenue?

The secret is the “Technology Platform” approach to new product invention. Scientists in 3M bring in technical knowledge in more than 46 fields (e.g.: adhesives, additive manufacturing, micro-replication,…) which is later mapped to specific customer pains in what is called “Applications development”.

The beauty of this strategy is that investment in technology platforms development pays off in a number of applications in many industries creating massive synergies.

I still remember my first day at 3M, when I called my wife saying: “Honey, this looks like the James Bond lab, full of inventions with hundreds of applications”.

8.     Fall in love with the problem, not with the solution

With such a bright technology available at your fingertips, it would be easy at 3M to come with a sophisticated technical solution to address a customer pain that was proven later that was not a pain at all.

Design Thinking was always in 3M DNA, with Marketers and Technical communities obsessed with “solving the right problem” before moving into “solving the problem right”.

I remember like if it was yesterday when a senior executive killed my initial product positioning strategy for an automotive aftermarket product family. I was then in love with in my view the smartest solution to an eroding business, but revisiting the issue while calling on additional customers absolutely changed my mind about what the issue really was. The outstanding performance of the product was useless as customers threw it away far ahead reaching its full potential. It was not a product technical challenge but a customer perception challenge.

9.     Creative problem solving is key

“What if…” approach to key customer challenges is a fundamental technique at 3M. The most obvious solution is not always the better one. Exploring other paradigms, embracing technologies from other business practices, calling a colleague from a different sector always pays off.

Moon-shot thinking creates a mindset that defers judgment and creates the right atmosphere for addressing the underlying customer issues and opportunities.

I had the opportunity to participate in several product launches where creative problem solving was applied. For example, car painting is difficult because matching the original paint color is a challenge under interior car body shop light conditions, so why not bringing indoor the natural light tone created by the sun with the support of a “sun light” device?

10.  Hire the best technical community in the World

3M has been led a number of decades by a strong technical community. Managers are necessary to manage, but technicians are the core of 3M innovation powerhouse.

There is not an easy balance between Marketing (responsible for targeting customers) and R&D (responsible for creating outstanding applications), but when squads of both communities worked together, magic happened.

Until now, I have sound respect for the technical community at 3M, always willing to help and create outstanding products to bring value to the company.

*****************

I’m absolutely in love with 3M, as much as I am with my current employer. My new role in Service Design in an airline makes me approach the question “what does 3M need to do in the future to stay at the front line in terms of being an innovation power house?” with new insights from the Service Design industry.

If I would need to choose three elements, it would be:

1.     Embrace ecosystems and Open Innovation

As intelligent as your own employees may be, by definition there will always be more talent out of your company than inside of it. Why would you lose the opportunity to embrace such talent in an “Open Innovation” scheme where internal 3M talented individuals would work shoulder on shoulder with bright corporates and start-ups around?

I guess the fear of losing IP on the technology has prevented 3M from this exposure to the external ecosystem, but I believe it has come the time to open themselves to the bright future that external talent can represent.

2.     Boost talent as the key competitive factor

Products and services are not any longer the key competitive factor of a company. They can be bought, copied, replicated, … while individuals cannot.

In the start-up world teams are very often the reason why investors support venture initiatives, as they know the product will very possibly change but the talent of the team will make pivoting fast and cheap possible.

3.     Have an eye on the long run

Strong pressure to meet quarterly earnings targets can result in compromising the long-run strategy. Innovation needs some space to flourish, and fostering such conditions requires senior management to counterbalance short term goals with building the right capabilities for the future.

What was once one of the 3M management principles: “If you put fences around people, you get sheep. Give people the room they need.” needs to get traction again.

If you want to read more:

https://www.3m.com/3M/en_US/company-us/about-3m/research-development/

https://hbr.org/2013/08/the-innovation-mindset-in-acti-3

Corporate Innovation Hacking. Intraemprendedores a escena

Corporate Innovation Hacking

Hablar de “Lean Start-Up” en España es hablar de Mario López de Ávila (@nodosenlared). Desde mucho antes de que el término se hubiera colado en nuestro vocabulario habitual asociado al ecosistema emprendedor, Mario había visto la potencia que esta metodología tenía para los que querían poner en marcha un nuevo proyecto empresarial.

Por eso, cuando Mario me pidió que participase como ponente en la sesión que organizó la semana pasada en IE Business School (Área 31), mi respuesta fue un clarísimo y muy ilusionado “Siiiiiiiiiiii”. Más si cabe conociendo el nivel tan alto de los otros dos ponentes: Susana Jurado (@sjapru) de Telefónica y Antonio López (@antoniolopezg) de Decathlon.

Lo que Mario había organizado era una sesión Meet-Up (magnífico formato, por cierto. Desenfadado, “ligero”, cercano,…) en la que tres profesionales de grandes empresas pudiéramos compartir con un público muy diverso nuestras reflexiones acerca de las metodologías “Lean Start-Up” aplicadas a entornos corporativos.

Arrancó Antonio, poniéndonos al día de cómo usar “Lean” no solo para desarrollar producto sino para resolver nudos gordianos en multitud de frentes empresariales. Me gustó mucho su idea de no tratar de gobernar sistemas complejos, sino aprovechar su movimiento para “bailar” con ellos.

Cerró Susana, con una ponencia muy parecida a la que tuvo la suerte de presentar en el “Lean Start-Up Conference” hace apenas unos meses en San Franciso (os animo a ver el vídeo, que es delicioso). En ella nos ilustró acerca de cómo las metodologías “Lean” han permitido “bailar a un elefante” como es la gran empresa de telecomunicaciones. Entre sus ideas fundamentales destaco la de que “un intraemprendedor no solo debe encontrar hueco para su producto en el mercado sino en la propia empresa”.

Escuchar a ambos fue un auténtico privilegio. Ayuda a demás a sentirse un poco más acompañado y comprobar que también otros profesionales buscan construir con nuevas herramientas “ligeras” un futuro mucho más ágil en la gran empresa.

Mi ponencia se centró en repasar el concepto acuñado por Mario para describir la labor de los intraemprendedores en la gran empresa, lo que él llama el “Corporate Innovation Hacking”. Y lo hice revisando cada uno de los tres términos.

  1. CORPORATE

The three most harmful addictions are heroin, carbohydrates, and a monthly salary”.

Nassim Taleb

¿Qué factor define si una organización es una Corporación ó una Start-Up? ¿Su tamaño, su facturación, su cultura, sus procesos? A veces esta pregunta me recuerda a la vieja paradoja de “¿cuántos pelos se le tienen que caer a alguien para ser considerado calvo?”. ¿Y qué más da?. Existen todo tipo de grises entre la gran corporación y la pequeña start-up. Y por eso mismo unas y otras se miran de reojo envidiándose mutuamente (“El césped siempre crece más verde en el jardín del vecino”). Ambas tienen que aprender la una de la otra.

La gran empresa es consciente de que:

  • Sus modelos de negocio, que pudieron ser en otra época muy eficientes, podrían estar absolutamente agotados.
  • Los ciclos de desarrollo son demasiado largos y complejos como para conseguir un “time to market” adecuado en un mercado hiper competitivo.
  • Las grandes burocracias y estructuras les alejan del cliente, del consumidor, del “destructor” de su producto o servicio.

Por otro lado la Start-Up desea “escalar” y al final si tiene éxito acaba por convertirse en una gran corporación y afectada por sus mismas trabas.

Así, mientras que Philips o General Electric crean divisiones “venture” tratando de imitar a las start-ups, compañías como Facebook o Twitter dejaron ya hace mucho tiempo de ser asimilables a esos pequeños proyectos nacidos en un garaje. Unas realizan viajes en la dirección de las otras.

Del mismo modo, grandes figuras del mundo “Lean” como Ries, Blank y Osterwalder comienzan a buscar cómo utilizar sus herramientas en grandes corporaciones, conocedores de que son éstas las que conforman el grueso de la actividad económica mundial.

  1. INNOVATION:

“You can’t do today’s job with yesterday’s methods and be in business tomorrow”

Alfred Chandler

Las grandes empresas tenemos mucho que aprender del mundo “Start-Up” sobre innovación. Estamos demasiado habituadas a asociar el concepto a innovación en producto, a la ventaja tecnológica, al número de patentes.

Sin embargo la innovación puede actuar sobre numerosas palancas distintas del mero producto: el ecosistema, el servicio, la experiencia de usuario, la marca, el canal,… A los que les interesen estos asuntos les recomiendo un repaso al Modelo de Innovación de Doblin que recoge hasta 10 áreas en las que la innovación puede actuar.

Por otra parte, la gran empresa opera muy bien el “business as usual”, el “core business, su negocio habitual. De este modo, no se trataría en absoluto de renegar de él y abandonarlo sino de manejar la corporación a dos ó tres velocidades. Mientras que los profesionales más tradicionales estarían centrados en los productos y mercados actuales, los “Corporate Innovation Hackers” tendrían la oportunidad de desarrollar nuevos mercados y/ó nuevas plataformas tecnológicas en las que ser competitivos en el medio plazo (“Teoría de los 3 Horizontes”). Cuando el ciclo de vida del primer horizonte se hubiera agotado, los horizontes 2 y 3 acudirían al auxilio insuflando nueva energía vital a la corporación y así sucesivamente.

  1. HACKING:

“Cada vez que se encuentre usted del lado de la mayoría, es tiempo de hacer una pausa y reflexionar”

Mark Twain

Me entusiasma este último término (ya le he insistido a Mario en la necesidad de registrar este “palabro” en relación con la innovación corporativa 😉  ). Me encanta porque creo que expresa de una forma muy gráfica tres palancas que utilizamos los intraemprendedores:

  • Utilizamos técnicas poco convencionales.
  • Retamos lo establecido.
  • Buscamos el máximo impacto, pero generando poco ruido.

Tan solo hay un matiz de la palabra “hacking” que considero peligroso, en lo que puede tener que ver con “destruir”. Los intraemprendedores no debemos caer en la tentación de tratar de pelear contra la cultura de nuestras empresas. Sería una lucha agotadora e inútil. No hay culturas buenas o malas sino adecuadas o inadecuadas para cierta misión. El maestro Drucker decía que “la cultura se come a la estrategia para desayunar”, refiriéndose a que si la estrategia no encaja dentro de una cultura empresarial, su ejecución será imposible, la cultura siempre gana.

Hecha esa salvedad, creo que los intraemprendedores = Corporate Innovation Hackers (en terminología de Mario), tenemos la misión de al mismo tiempo:

  • Retar lo establecido
    • Servir de contrapeso a las estructuras más formales de nuestras organizaciones.
    • Acelerar el proceso de toma de decisiones.
    • A veces ser el “hombre bala” que haga propios mensajes que nadie se atreve a mandar.
  • Ayudar a construir
    • Actuar como árbitro, como “casco azul de la ONU” en medio del conflicto.
    • Facilitar, acercar posturas.
  • Garantizar la viabilidad del negocio futuro
    • Eliminando sesgos mentales.
    • Rompiendo el pensamiento grupal.
    • Incorporando visión externa.

Por último, durante la charla hice una reflexión sobre las principales barreras y aceleradores con las que nos encontramos los intraemprendedores en nuestro día a día “corporate”, a saber:

BARRERAS

  • Resistencia al cambio por aversión al riesgo (la organización prefiere fallar por omisión que por acción).
  • Diferentes agendas (por ejemplo un ejecutivo con un mandato cuyo plazo es menor que el de los proyectos que tratamos de impulsar).
  • Falta de recursos (que la corporación se encuentre cómoda mientras que experimentes “con gaseosa”, pero sin una apuesta económica valiente).

ACELERADORES

  • Entregar resultados parciales, adelantar avances, mostrar prototipos que apoyen el resultado final del proyecto.
  • Buscar “sponsors” internos que crean en nuestro proyecto y a partir de ahí replicar en otras áreas.
  • “Hard is soft and soft is hard”. Cultivar las relaciones personales. Escuchar a la organización.

En fin, una experiencia absolutamente deliciosa la de participar en este evento, aprendiendo de los mejores: Mario, Susana y Antonio.

Por un 2015 lleno de “Corporate Innovation Hacking”.

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