Nothing could be worse than having your market share taken by a new product or service. After all the hard work and effort you have invested in bringing your idea to market, establishing the market, educating the users, and setting the precedents for customer service and satisfaction, only to have paved the way for your competition to take your place. But it is inevitable that this will happen. There are at least two ways to respond to this inevitability: wait and react and anticipate and be proactive. In this case, planned obsolescence would be a great strategy. Set-up a team that will attempt to create the next product or service on the S-curve in question. Or even create a new S-curve. It depends on the current need(s) of the business. Evaluate the voice of the customer and the voice of society and determine the best approach for the introduction of your products successor. When you are successful you can then control the introduction of the new product thereby protecting any remaining profitability for that being replaced. This is a great strategy and follows Drucker's adage:

"The best way to predict the future is to create it."

Case in point. Sterno, for over 100 years, has had nearly 100% market share for the utilization of ethanol/methanol combustion reactions to heat food in chafing dishes. This practice utilizes huge volumes of their product to heat water that then keeps food warm in buffet and food service situations. Pressures concerning safety (fire hazard) have caused municipalities to pass laws outlawing the use of these products indoors. This would be catastrophic for the long-term survivability of Sterno's products. What do do? Sterno organized a team whose main objective was to create the next generation of the product that would not suffer from the potential safety hazards the current product does. We were able to create a new concept that provided the same necessary functionality. We did it using a CaO exothermic reaction to provide heat for food warming that does not require a flame. Sterno Flameless was born. Sterno is now able to introduce their new product to those markets that demand it while continuing to profit from sales of their traditional product from customers who still prefer it. Planned obsolescence was conducted successfully and because of it Sterno my have almost 100% market share for another 100 years.

After I gave my presentation at the IQPC Six Sigma Summit with Ms. Sally Frettinger from Ventana Medical Systems, I was asked about the cultural implications of the work Sally and I presented. The next day General Colin Powell discussed the intersection of Innovation, Six Sigma, and his leadership style and he repeatedly mentioned the impact that an existing culture will have on being an effective leader. The next day, I gave a lecture at Xerox about deploying Competitive Excellence (CE), and was asked questions about the successful integration of CE with an existing cultural model. Several days, several speakers, different audiences, and the same cultural curiosity. I couldn't help but remember the groundbreaking work of Professor John P. Kotter. Kotter published a preview of his work in a 1995 HBR article and presented his book, Leading Change, in 1996. Kotter identified eight steps for the successful transformation of an organization:

(1) Establish a Sense of Urgency--the "burning platform", if we do what we've always done, we will get what we've always got--and that's no longer good enough
(2) Form a Powerful Guiding Coalition--you need enough "power" to change the entire organization
(3) Create a Vision--the effort must be focused and the organization must be aligned to a single purpose--otherwise, Corporate Brownian Motion will overcome any progress
(4) Communicate the Vision-- necessary to spread the message and communicate the progress towards the goal
(5) Empower Others to Act on the Vision--remove obstacles, modify the infrastructure so that it enables change and the new plan--subsidize what you want more of, tax what you want less of
(6) Create Short Term Wins--set reasonable expectations and generate small victories, win the war one battle at a time
(7) Consolidate and Continue--build momentum with the many, small victories, and continue on this path, stay the course, and
(8) Institutionalize New Approaches--identify the correlation between the new success and the approaches that got you there--adopt practices across your enterprise

A decade later, Kotter's work in this area is still powerful and relevant. As a matter of fact, it will help Ventana, General Powell (in his work with Google, for example), and Xerox not only achieve their objectives, but energize and align each culture so that it is enabled and continues to evolve into the required form that will keep each organization competitive into the new millennium.

One concern of the "innovation community" is the need for massive cultural change to convert old-style, business-as-usual organizations to aggressive, change-hungry, experimental innovation organizations. And the history of cultural change is not good--various studies of corporate change initiatives have failure rates ranging from 50 to 95%---and the bigger the change, the higher the failure rate.

So it was a great pleasure on Dec. 15 to hear the UTC (United Technologies) story from Dr. Ralph Wood, who has been a member of the change team for more than ten years. The discussion was hosted by Dr. Bill Bellows, as one of the "Ongoing Discussions" of the In2:InThinking Network. See www.in2in.org -- I recommend signing up for the newsletter, and for the discussions. To quote from their home page:

"The aim of the In2:InThinking Network is to promote study and awareness of individual and collective thinking about sub-systems, psychology, variation, knowledge, and their interactions - elements recognized as the basis of Dr. W. Edwards Deming's "System of Profound Knowledge (SoPK).

The concept of "inThinking" derives from "thinking about thinking", where thinking is defined as "a way of reasoning." InThinking invites an individual to learn to perceive the patterns of interdependencies surrounding him or her and to reason and judge with this insight."

Ralph focused on UTC's conversion from a conventional business in trouble with both the SEC and the EPA, to a performance culture, where the visible artifacts of the company (results, operational systems, policies, processes, measurement systems, behaviors, …) are aligned with the purpose and guiding principles of the organization. It has been a long journey, and there have been a lot of lessons learned along the way.

The good news for the rest of us is that the journey is still going on. Many changes have been made, and many are still being made. The usual success story statistics are all there--stock price is up, defect rate is down, employee satisfaction is up, employee retention is up, customer satisfaction is up. I can draw one TRIZ lesson from Ralph's story: The basic TRIZ principle that "Somebody, someplace, has already solved your problem" is very visible at UTC. Ralph told several stories of how they took Steven Covey's Seven Habits of Highly Effective People and converted them into seven behaviors for a highly effective company.

Thanks to Ralph and Bill for all the work to organize the discussion. My suggestion to our readers is to see the Ongoing Discussion section of www.in2in.org for the Ralph's notes, and for future programs.

Archeologists sometimes find artifacts that are not consistent with the collection of technologies discovered for a certain period and/or culture. These finds are termed "out-of-place artifacts" (OOPARTS). The pyramids are often cited as a fantastic example of this phenomenon. Also classified as OOPARTS are the voltaic cells found in Babylon, the electron tubes found in Dendera, the Ashoka Pillar found in Delhi, India, and the navigational calculator found in Antikythera. These items demonstrate capabilities thought to have been advanced from where the culture was technologically and, therefore, not possible. They demonstrate a discontinuity in our understanding of a particular capability set.

Continuous innovation is the logical progression of what is. It may be the addition of features or functions based on an existing platform. Typically the development and manufacture of these derivative devices is only slightly more complex than the previous generation. These types of innovations are great for preserving or extending the profitability period of a portfolio. As the portfolio matures, the need for a discontinuity increases. The organization must innovate in new areas that are unrelated to previous work. The type of creativity that generates great derivative products is not suited for the generation of a discontinuity. Strategic Systematic Innovation (SSI) is required. SSI is the set of capabilities that will empower an organization to produce a concept that is discontinuous from all others. While leveraging core competencies, a novel portfolio can be created. This discontinuous portfolio creates a new profitability curve and minimizes the risk associated with a limited and mature portfolio. The discontinuity is the way to evolve your organization.

Without a systematic approach for the intentional creation of discontinuities (or disruptive innovations), the organization is left to the mercy of fiat and chance. This is not an envious position to be in. You want your innovation to be a regular and habitual product of the systematic application of principles, methods, and discipline (just like your quality and production capabilities). You don't want innovation at your organization to be classified as an OOPART by the business archeologists of tomorrow, do you?

The innovation maverick is that individual who perceives the way forward in an organization through the creation of innovative concepts. When an organization is in the entrepreneurial phase, the maverick is the driving force for the commercialization of the key idea. The maverick works in this chaotic period as problems are identified and then solved with few boundary conditions or constraints. As the company stabalizes and moves towards system and discipline, the maverick finds himself lost and overlooked as constraints are placed that restrict his ideal modus operandi.

Now the maverick is the focus of much of managment's time and effort, but for very different reasons. Management is constantly telling the maverick that the problems of today are more important than the problems of tomorrow and that the status quo must be maintained. There isn't usually any strategic or cultural support for off-topic innovation anymore. If the concept doesn't address the problem of today then it becomes a problem itself. This frustrates eveyone and the maverick most of all.

Something has to be done so that the mavericks maintain their ability to contribute as the needs of the organization evolve. The organization needs to realize the cultural and strategic importance of looking ahead. The organization needs to realize the value of balancing the needs of today with the needs of tomorrow. The organization needs to bring system and order to the innovative process as well, as the type of innovation that was successful before will not produce the same results at he current level of organizational maturity. The mavericks need method and a focused set of strategic priorities in order to ply their trade effectively. The organization and the maverick have to mature together for mutual survivability.

On Tuesday Chairman and CEO Samuel J. Palmisano announced that IBM would invest $100 million on ten new and innovative ideas that resulted from an online brainstorming session called InnovationJam.

InnovationJam, which was billed as the "largest-ever brainstorming session," is said to have brought together 150,000 people in 104 countries. It included two 72-hour sessions and produced more than 46,000 ideas. Now that's a lot of digital Post-it notes.

The top ten ideas that were selected near-, mid- and long-term development include:

1. Smart Healthcare Payment Systems
2. Simplified Business Engines
3. Real-time Translation Services
4. Intelligent Utility Networks
5. 3D Internet
6. "Digital Me"
7. Branchless Banking for the Masses
8. Integrated Mass Transit Information System
9. Electronic Health Record System
10. "Big Green"

How is IBM going to be executing on this innovation? Their press release said, "Consistent with the open, collaborative nature of innovation, IBM intends to partner with multiple clients and universities to bring these ideas to market quickly." I seriously hope they're considering more than just outsourcing as their path to innovation success.

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