Scott Anthony on how to kill innovation

Here is an article written by Scott Anthony for the Harvard Business blog. (It looks much longer than it reads. Also, frankly, I could not decide what to delete.) To check out other articles and resources and/or sign up for a free subscription to Harvard Business Daily Alerts, please visit dailyalert@email.harvardbusiness.org.

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I had an epiphany recently. The setting: a multi-billion dollar global giant. The topic of discussion: innovation. My epiphany: A simple two-word phrase that can hamstring innovation.

“What about.…”

I was helping a cross-functional group review a few ideas to create new growth businesses. Like many early-stage propositions, the ideas blended intriguing potential with high degrees of uncertainty.

About 15 minutes into the review, the questions began to come in.

What about the competitive landscape? Can we model the impact of someone entering the space early?

What about the market size? Are we sure these numbers are right?” another wondered.

What about the regulatory regime. Are these timelines really realistic?

They were important questions, and robust answers would help bring each opportunity into sharper focus. And the group’s intentions were good — figure out which opportunity was the most attractive so that the company could direct its resources appropriately.

The problem, though, is what follows “What about…” questions. The next step from almost any discussion like this one is to conduct further research. And, “What about…” questions never stop. Each answer generates questions whose answers lead to further questions. It could become infinite.

Even if you do analyze your questions, frequently the analytical work, no matter how robust, proves wrong because of something that can’t be anticipated. To borrow a phrase from the great military strategist Helmuth von Moltke: “No business plan ever survived its first encounter with the market.”

Further, the greater the demands for comprehensive answers to “What about…” questions, the greater the pull of existing markets populated by powerful incumbents. After all, it’s difficult to question the size of the market that already exists — even if history shows that those markets aren’t the best targets for growth-seeking companies.

It’s just hard to have robust answers about an unknown future state. Too frequently, taking the time to answer “What about…” questions doesn’t bring you any closer to achieving the goal of creating booming growth businesses.

This is part of a category of “abundance” problems that makes it paradoxically hard for resource-rich companies to “pave the first mile” of growth (a broader theme I’ll be exploring more deeply in future posts).

Resource-rich companies have the “luxury” of researching and researching problems. That can be a huge benefit in known markets where precision matters. But it can be a huge deficit in unknown markets where precision is impossible and attempts to create it through analysis are quixotic. Entrepreneurs don’t have the luxury of asking “What about…” questions, and in disruptive circumstances that works in their favor.

So what’s the alternative? Substitute early action for never-ending analysis. Figure out the quickest, cheapest way to do something market-facing to start the iterative process that so frequently typifies innovation. Be prepared to make quick decisions, but have the driver of the decision be in-market data, not conceptual analysis. In other words, go small and learn. Pitch (or even sell) your idea to colleagues. Open up a kiosk in a shopping mall for a week. Create a quick-and-dirty website describing your idea. Be prepared to make quick decisions.

The future can’t be analytically derived. Of course it’s almost always valuable to think comprehensively about a new idea. But maintain a healthy balance between analysis and action. If you get stuck in “What about…” loops, you’ll never get the results you seek.

Scott Anthony is the Managing Director of Innosight Ventures and author of three books on innovation, the latest being The Silver Lining: An Innovation Playbook for Uncertain Times.

Book Review: Inside Larry & Sergey’s Brain

Inside Larry and Sergey’s Brain
Richard L. Brandt
Portfolio/The Penguin Group (2009)

When discussing Google’s supernetwork and its significance (and potential vulnerability) as a competitive advantage, Brandt observes, “Anyone who uses an application from Google is tapping into this incredible store of computing power. This is the main reason Google’s competitors have such a hard time matching the company’s capabilities. And it allows Google to enter any business that Larry, Sergey, or their ambitious team of computer scientists find interesting…Google is changing the rules of business, from news delivery to PC computing to books to watching video…And business that deals in the collection and dissemination of information is in danger of having its infrastructure collapse its feet like Wile E. Coyote standing on an overhanging cliff. Larry and Sergey move like roadrunners, charging ahead with their visionary plans, saying nothing about where they’re headed, or why. There’s a good reason for that. They often don’t know where they’re going until they get there.”

Brandt probably had about as much access as could be obtained to Page and Brin, to their past and current Google associates, and to the shared journey that Page and Brin took from when they first met at Stanford until Brandt provided the manuscript of this book to his publisher. Brandt responds to a number of questions most readers probably have and does so while carefully examining (no small feat) the interdependence that continues to guide and inform, indeed drive the collaborative efforts of Page and Brin.

1. What do they share in common? How are they significantly different?
2. How and why have they worked so effectively together for so many years?
3. What do their respective family backgrounds reveal about their values?
4. What were their expectations when Google was launched in December of 1998?
5. How has it since then become a media giant?
6. When and why was Eric Schmidt hired to become Google’s CEO?
7. What is his division of authority and responsibility with Page and Brin?
8. To what extent (if any) have Page and Brin changed in terms of their ambitions for Google?
9. What are the most serious challenges that Google now faces?
10. How will it probably respond to them?

Re Google’s origin, “It seems today that it was always inevitable that Larry and Sergey would turn their search engine into a company. But that was not the case. ‘Larry has a million ideas,’ says his early partner Craig Silverstein. ‘If he didn’t make a company out of this, he’d be happy to make it out of something else later. If they had found someone who took their work seriously, and wanted to own it and offered the right price, they would have sold. We didn’t find that so we said, ‘OK, we’ll do it ourselves.’ In 1998, they began looking for investors to get them started.” (Page 48)

Of all the volumes in the “Inside [Someone's] Brain” series, I think this one provides more and better information about its subject than do any of the others. Not only does Richard Brandt explore (to the extent anyone can) the two minds that have created what Google has become thus far; in addition, he has examined the global as well as historical context within which that process of creation occurred. Bravo!

Executive Insights: Tachi Yamada (Bill & Melinda Gates Foundation)

Tachi Yamada

Adam Bryant conducts interviews of senior-level executives that appear in his “Corner Office” column each week in the SundayBusiness section of The New York Times. Here are a few insights provided by Tachi Yamada, president of the Global Health Program at the Bill & Melinda Gates Foundation.

Bryant: Talk about how you hire.

Yamada: You have to have people in an organization who are willing to embrace change, because if they don’t, what you have is an organization that’s constantly fighting to stay at the status quo. And, of course, that leads to stagnation. It’s also an unsustainable model.

I’ve made an observation about people. There are people who have moved. Take somebody who’s a child of an army officer — they will have moved 10 times in their lives. Then there are people who’ve been born and raised and educated and employed in one town their whole lives. Who do you think is willing to change?

I think that in this modern world, you really have t be sure that your work force has the experience of being elsewhere. That experience then has the ability to ensure that you will be comfortable with change.

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To read the complete interview and Bryant’s interviews of other executives, please visit nytimes.com/corneroffice.

If You are “In Transition” in Dallas (and elsewhere) — check these out

If you are “in transition” in the Dallas area, let me encourage you to check out this web page by Lauren Babis, Unemployed in Dallas.  Lauren lists a number of regularly scheduled events in the Dallas area that might be helpful to you.

And if you are looking for a blog that speaks to your issues with regular, helpful posts, check out Doug Caldwell’s blog here.

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Note:  Though the First Friday Book Synopsis is not a networking event designed for those “in transition,” we always have a few people who attend who are in that chapter in their lives.  Here’s how Lauren Babis describes our event:

First Friday Book Synopsis
This is not a resource for the unemployed, so it costs money. On the positive side, most people you meet here have jobs which is really good for networking. Plus you get “cliff’s notes on steroids” of two business books and a really good breakfast.

I Invite You to Attend the First Friday Book Synopsis this Friday — Books: Switch & 59 Seconds

This Friday is our March First Friday Book Synopsis.  And, this will conclude our 12th year of gatherings.  In April, we will begin our 13th year for the First Friday Book Synopsis.  With a few “extra” presentations that we have done for companies and organizations, Karl Krayer and I have now read and presented synopses of over 300 business books.  There aren’t many best sellers that we have missed in these dozen years.  I admit that I am biased, but I think that people who attend our events really do receive valuable, useful business information and challenge.  (Not to mention great networking, and a really delicious breakfast).

If you live in the Dallas area, I invite you to attend our event this Friday.  We meet at the Park City Club, near Northwest Highway and the Tollway in Dallas.  Here are the two books for this Friday:

Book #1:
59 Seconds: Think a Little, Change a Lot by Richard Wiseman.  Synopsis presented by Karl Krayer.  (read about this book on Amazon.com here).

Book #2:
Switch: How to Change Things When Change Is Hard by Chip Heath and Dan Heath.  Synopsis presented by Randy Mayeux.  Read about this book at Amazon.com here, and especially read Bob Morris’ review on our blog here (and on the Amazon site here).  (Bob really liked this book, and so do I).

I hope you will join us for our gathering this Friday.  You can register (and pay in advance) for the event here.

(Many of our synopses are available to purchase, with handout + audio, at our companion web site, 15minutebusinessbooks.com).

Where will People Work? — more on “the” question for business leaders of this era

News item: Long-Term Joblessness “Off the Charts” Hitting Middle Class Particularly Hard; Millions of Such Jobs Gone Forever: The once prosperous and gainfully-employed middle class is being hit especially hard.  Here is an excerpt:

For those who once worked in the auto industry, housing and manufacturing, new jobs could be a long time coming, Lakshman Achuthan, managing director of the Economic Cycle Research Institute adds, pointing out that, “Ten years ago, we had 18 million or so people in manufacturing; now, it’s a little over 10 million. So you have 8 million jobs gone and they are not coming back, ever.”

News item:  Despite Lack Of Work, Millennial Generation Remains Buoyant

The recession has created a dismal employment picture for 18- to 29-year olds, the worst since 1972. But despite that harsh economic reality, today’s “Millennials” remain bizarrely rosy about their prospects.

One factor could be that, for a large chunk of these young people, the vicissitudes of adult life have yet to set in. According to the survey, 36 percent of all 18- to 29-year-olds depend on their parents for financial assistance. For 18 to 24 year olds, it’s 50 percent.

Indeed, one-in-six older Millennials, age 22 and older, has boomeranged back to a parent’s home on account of the recession.

On the bright side, the Pew survey suggests that this generation is shaping up to be among the most educated in recent history. 54 percent of all of Millennials currently attend or have attended college, compared to 49 percent of Generation Xers at a similar age.

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I have written a few times about what I believe to be the number one problem we face – where will people work? (Read this post here and this one here).  We know we are losing manufacturing jobs — and, basically, jobs in every area of work that in the past were done by “strong, strapping men.”  For example, it used to take hard physical labor provided by physically strong men to load and unload ships.  Now it takes a handful of people sitting at computer terminals to load and unload containers.

But, “don’t worry,” people say.  We are becoming better educated, and the jobs of the future will be filled with the educated, who will be ready for these new jobs.  And yet, in the second article referenced above, the Millennials are better educated, and they still can’t find the kind of work that sustains, much less builds, a true middle class.  (Have you been following the difficulties of the most current law school graduates?  It is not a pretty picture).

As I said, this is the question of this era.  Where will people work?