Commentary by Jack Hipple

Front End of Innovation Conference 2010 Day 2

Keynnote: "Innovation is Successful Only When it is "On Code" (Clotaire Rapaille, Archetypes Discoveries Worldwide and Author: The Culture Code: An Ingenious Way to Understand Why People Around the World Live and Buy as They Do

Clotaire made an extremely interesting presentation on the internal "coding" of our thinking and brains, meaning why people do what they do and why they frequently say one thing and do another. An individual's "code"is defined as why they accept or reject new ideas and types of innovation. An example he started with is the difference in approaches to the challenges and opportunities in airline travel. The airplane builders, in trying to improve the qualitry of the air travel experience are thinking in terms of leg room and food service where the big issue in the mind of an airplane user is the time involved (travel, security, etc.) getting on to the plane much more than the flight itself, which in many cases is much shorter than the comiing and going from the airport. No airport at all is what would be desired. He also mentioned the different strategies employed by Boeing and Airbus with Boeing's smaller, but longer range 787 providing more non-stop capability. He suggested that we go beyond getting out of the box and get rid of the box (airport?). (TRIZ folks: Ideal Final Result: Something performs its function and doesn't exist!). Clotaire says that our code of analysis and reference is imprinted early on from our experiences and there's no second chance for a first experience. He pointed out his surprise that in the US conference rooms usually have no windows vs. lots of windows elsewhere. He pointed out the most important code within us is the one related to survival. In this regard, we have 3 brains: reptilian (both an inside version relating to food, care, etc. and an outside, and emotional one). He used the example of the very sucessful PT Cruiser from Chrysler as an example of a product appealing to both inside and outside codes of our brains. The exterior design was very round, shapely, and "feminine" (appealing to our emotional side) while the inside was more like an Al Capone escape vehicle. It was an example of a love/hate car crossing two codes in our brains. Digitial watches vs. hand watches in another example of appealing to different "codes". Then we have the cortex analytical part connecting with other people and facts, data, reality, statistics, and prices. This last part ontrols the other two functions and cleans the plate ccasionally (men and women very diffrent about this). Men tend to react to the aroma of coffee vs. its taste and a mother relates it to breakfast and feeding the family. An innovation in this area must be "on code"--aroma. He related this to the eleimination of the PT Cruiser when Chrysler was taken over by Daimler Benz who did not see the need for a "feminine" code product. He also speculated about the changes in store now that Fiat, an Italian company, was the owner. Chrysler employees must feel very schizophrenic! The American "code" is that they do not want smaller cars. From Geneva in Europe you can be in Italy, France, etc. within 30 minutes or at most 3 hours. In America we can drive for a week and still be in one country. Space and efficiency are both important. That's the "code". In Japan minimal space is the norm--there is no word in the Japanese language that we would interpret as "privacy".

Innovation has to make life simple. Adding one step of complication causes a 20% loss in market. No cables for anything! Approach a car and it starts!

Corporations have cultures and replicate themselves without awareness and then cannot adapt. Terrorists have no structure (vs. the Panzers in WWII Germany). With little investment, big results are achieved. The 9/11 incident involved the purchase of 10 plane tickets.

We don't use outside resources enough to break our "codes". Having seven engineers on a "brainstorming" team is 6 too many, he says. Find a priest, a baker, a car dealer, etc. Multi-cultural diversity to understand "codes" is important. The Japanese perception of cleanliness in a bathroom is different than a Chinese perception since Chinese bathrooms are so much smaller and the focus in on how clean the celliing is since that's the only thing that can be seen. (When was the last time you looked at your bathroom ceiling?). The Japanese and Americans have very different "codes" about time.

It takes only one second to create history. December 6 and 8, 1945 were distincly different for both the US and Japan. He made other comparisons of Japanese and American "codes". Doing things right the first time in the US is "boring. Americans don't read instructions--they make mistakes. The Japanese read the instructions 500 times. We frequently don't use the additive strengths of the different "codes" in people. Be suspicious of any CEO who only knows one language.

In the US we are only interested in what's impossible. That's what we need to ask our teams to do (Note to TRIZniks: the Ideal Final Result)

Jim reviewed his research in the use of collective random intelligence highlighting a study done by placing an oxen on display and asking all passerbys to guess its weight. After collecting hundreds of ballots, the "average" guess was 1197 pounds vs. the actual 1198 pounds. No one guess was correct but the average was. We need to tap into colective intelligence and reach across all inputs. He pointed out that studies have shown that crowd predictions on elections are more accurate than Gallup polls 75% of the time. How do we make sure we "reach across"? Use diveristy (multi-cultural, age, gender, type of training) and expand the range and type of diversity you're considering. Everyone is not making the same mistakes!

Most meetings are echo chambers. He related how the term "devil's advocate" came about. In the early days of the Roman Catholic church's practice of naming "saints", there was great concern about the significance of this decision and a single dissenter was always included in the discussions and just as importantly, the "dissenter" was constantly changed. People dissatisfied with their "team" experience tend to be ones who like consensus and prefere homogeneious teams that can reach consensus easily. Good decisions arise from conflict. This needs to be made explicit at the start (Personal input here--if we made more proactive use of psychological assessment tools, this would be much easier). Imitation and group think are potentially dangerous in innovation. He mentioned a study done in Times Square where one person looked up at the top of a building and 5% of the surrounding crowd looked up. When 5 people looked up, 20% of the crowd did. When 8 people looked up, 45% did.

Be careful about oral responses and talkative people in group decision meetings. Knowledge and incites come from unexpected sources and people and leaders cannot dictate this in advance.

This group discussed their individual company approaches and processes for corporate wide idea collection. Avery Dennison has an "idea bank" which collects employee input and ranks against business needs. Award systems are used but not strictly related to dollar impact. There are special rewards for ideas relating to REPLACING current products and businesses. (Personal note: that's a great idea!). Motorola has an inventory of 16,000 ideas via an Open Idea Market. No special rewards, relying on WIIFM, helping, sharing. Clorox makes heavy use of both internal and external social media.

This session used a very interesting format which may be of value to you. The speakers were on a small stage in chairs, and after their brief oral (no slides)presentations took questions. The person asking the question was invited to join the panelists and participate in the Q/A, providing a "build" on the idea inputs. It suggested to me a possible format to replace the management lecturing presentations followed by Q/A in many companies. The employee asking the question would join the management group, replacing a manager who then beome part of the "audience". Might provide some interesting dynamics!

Sony described their efforts in future scenario planning, primarily based on bundled functionality and bundled services. As a service provider, Pitney Bowes uses the concept of a "challenge architect" in thinking about the service process they provide. They see the "democratization" of innovation. This is a reinforcement of trends mentioned by many other speakers. They use a RGB framework to categorize ideas (red--now, green--procede, blue--blue sky concept). They listen to the "voice of the retailer". Sony pointed out the change in photography trends as an electronic camera allows the user to take many more pictures and then delete them later (Personal TRIZ note: cheap and disposable principle). This is a miniature version of the information age challenge of having too much information and trying to sort what is valuable.

Dr. Vandebroek sumarized Xerox's corporate strategy as combining the customer's wishes and wants with Xeroxx capabilities to produce breakthrough products, services, and $$. She also mentioned their partnership with Fuji in Japan and mentioned their R&D budget was $1.5B and having 50,000 patents and generating them at a rate of 10/day. Xerox sales are $22B and it employs 130,000 people.Business focus is documents, document management, and business proffess outsourcing.Their Palo Alto Research Center (PARC), formally an only internal Xerox research center now gets 50% of its revenue from outside Xerox. Their R&D budget is split approximately in thirds: exploration, incubation of new businesses, and current commercial product lines. They use Customer Innovation Councils with P&G, cited as an example. They collaborate on space design, types of printers, solid ink waste. One of these efforts reduced printer power use from 400kwh/day to 70. She mentioned that there are 3 TRILLION pages/yr. being generated and less than 5% has been digitized. There are 9B times more electronic data than is in books

Internally, employees are required to participate in their "dreaming" process. They observe and categorize opportunities by remote knowledge workers and mobile knowledge workers.

They have recently purchased Lulu self-publishing. A book can be published in 5 minutes and downloaded within 20 minutes.

This talk highlighted the importance of platforms as an innovation engine. A picture of the original Sputnik satellite in 1957 was shown but the point was not the satellite (and its repercussions in the West) but the fact that the signal from this satellite was not hidden. Now satellite signals are use to accurately locate submarines and form the basis for GPS navigation. GPS is now a platform, not just a signal. Ideas are also networks. They start as a network of neurons firing and then making new connections. The history of the Philadelphia Coffee House where Ben Franklin and other early American inventors gathered to not just drink, but to exchange ideas. Platforms build and cross pollinate. We now have Google maps, Twitter, SMS cell phones, HTML, http:, etc Four Square is new business concept using all of these. Clusters, not corporations, are what is important. These are not necessarily exclusive.

The disruption was the flash microchip, but the challenge was culture barriers and roadblocks. In 1975, the first digital image was captured on a TV.The charge coupled device in the late 60's allowed the exploration of image capturing in an electronic fashion. Initially there were no specific business goals. The first digital camera has .01 megapixels, only B/W, and a 120X160 mil active area, and required a custom setup. There was no budget (he had to personally buy the CCD), they had no dedicated space and only 1 technician. The prototype was the size of a toaster, had a digital cassette, and used 16 batteries. With the Kodak "culture" of perfect image quality, the quality of the picture at that point was a major barrier. In 1977, a technical report was written, a patent filed in May 1977, and the first digital camera patent issued in Dec 1978 (#4131919)

The internal reaction was curiousity and caution and there was hesitation to show around. It generated more question than answers (no film? no paper? It's too far out). People don't want to view an image on a TV! How to store the images? (No mass market PC's at that time) How to make reliable? The paradigm is the paper picture is reliable almost forever. The PC, the Internet, wide bandwidth, photoprinting in the home were all paradigm changes. The context of its use was not imagined. In 1976 the question was asked, "when will it impact consumer photography?" In 10-15 years, they went from 10,000 to 1 million pixels and 200X improvement in resolution. There was zero interest in memory cards. There was much more support outside of Kodak than within. The development of digital circuitry in terms of speed, power, and size were just not imagined. Image compression (.jpg) was another enabler. It removed 90% of the image that the eye couldn't see anyway and allowed the introduction of artificats. The D5000 camera introduced in 1989 ran into significant cultural issues ("you can't change film sales", "call it in an image accessory, not a camera"0. The bottom line issues are to understand the corporate culture and view your innovation in their context, have friends (they're had to find!), and be honest and positive with your internal PR. Don't make yourself the issue. Remember all roadblocks are temporary and plan for what's next. Be patient, persevere, and be persistent. The key learning was the need was an image, not the film. Now the internal gospel is "no more film projects"! This was a fascinating presentation by someone who has more patience than anyone I have ever seen make a presentation since Art Fry's Post It Note story.

For those of you who are not aware of or don',t shop at Target, you are not aware of the concept of the "Guest" in the store. At Target, the guest (not the "customer") is at the center. It's an ethos vs. a process. Open innovation is part of Target's DNA along with the emphasis on diversity of intellectuality. Challenges they have been dealing with include balancing the Target store brands vs. the brand names. Their market demographics are getting older and more diverse.

They encourage teams to share results across the company, and strive to diversify the interests and include critical thinkers. Some time ago, they arrived at what they called the "Moment of Truth" and that is that the guest comes first and the vendors/suppliers are second. "Speed is life"--need to learn quickly. "We must not forget what we learned" as the economy gets better--don't let up!

Target now has a Director of Guest Insights to ensure they continue to gather information from the "guests'" perpective.

This division of GE sells CT and MRI machines and has a very engineering focused R&D team. Their challenge is in selling their technologies and products and bringing ethnographic research into their planning. 90% of the time the product technology is there but the design aspects come at the end They have sent a number of their engineers to a design course at Stanford to try to improve the understanding of the product/customer interface to their engineers. In other words, what is the customer "experience"? It's usually not very pleasant, frequently requiring sedation, especially for children under 6 and adults who are claustrophobic. They have made some interesting changes in the design and the experience to try to change the perspective to one of an "adventure" for a child (make it a spaceship with stars projected for example), and introducing comforting sounds and smells, as well as decorations. "We need to get away from the image that we're "torturing people"! Part of the Stanford course involves teaching some basic creativity skills to their engineers to improve their ability to be more right brained in their design thinking to hopefully produce a more user friendly experience, not just a better product.

Day 3 tomorrow!

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