Tom Peters: Whats the one key ingredient for Adaptive organisations?

Adaptivity is more or less a 100% function of the workforce and how it is recruited and developed and encouraged and appreciated—or not. – Tom Peters



The outside-in perspective

From Reorganize for Resilience: Putting Customers at the Center of Your Business by Ranjay Gulati:

“Those companies built around an inside-out mind-set—those pushing out products and services to the marketplace based on a narrow viewpoint of their customers that looks at them only through the narrow lens of their products—are less resilient in turbulent times than those organized around an outside-in mind-set that starts with the marketplace, then looks to deliver creatively on market opportunities. Outside-in orientation maximizes customer value—and produces more supple organizations.

“Embracing an outside-in perspective—focusing on creatively delivering something of value to customers instead of obsessing over pushing your product portfolio—builds an inherent flexibility into organizations. While this perspective is beneficial under all market conditions, its advantages become particularly acute in adverse and turbulent markets, making you inherently more responsive to market shifts, a competence that’s especially important in markets where firms must radically alter what they produce, what they sell, and how they sell it. Rallying around customer problems thus results in the resilience that protects businesses from economic storms.”

A key reason why I believe that Innovation starts with people and not products.

Innovation is a team sport

In Lattice work of social innovation I discussed the various disciplines and models we need to create better outcomes and solve the tough problems in the world.

For this, you need more than one person. A team.

Jeffrey Phillips makes a good case for a team rather than a superman.

No man is an island, and very few of us can manage all of the tasks necessary to develop a new idea from initial need to final commercialization.  Anyone who suggests otherwise is simply missing the point or overlooking a lot of contributions from others.

People who point to Steve Jobs fail to realize that he had a number of important collaborators, including Wozniak (who did all the initial engineering) to Jonathan Ive (who did a lot of the design for the “i” products) to a wealth of people in marketing, engineering, and manufacturing.  Jobs was an important contributor and demonstrates the engagement we’d like to see from many CEOs, but Apple isn’t and wasn’t a one-man show.  It takes hundreds of people to manage the creation of a new product; Jobs was merely a very brilliant front man for the enterprise, and a good innovator himself

The meaning of design

Ben @ Stratechery  writes eloquently about what design thinking is. It’s key to innovation and creating value to customers. All our work, whether policy formulation, Strategy, innovation starts from this.

Approaching a problem with a design thinking mindset, however, certainly takes into account what a customer says, but simply as one input among many. In this approach, observing the way people really live, developing a deep understanding of the real problems they have, and gaining an appreciation of the “hacks” they devise to overcome them can deliver an understanding of prospective customers’ needs that is more accurate than what any of those prospective customers could ever articulate on their own.

And then, from that understanding, an entirely new, highly differentiated product can be delivered that surprises and delights.2 From a business perspective, the emotion and attachment said product inspires breaks down price sensitivity and builds brand attachment, and inspires the sort of viral marketing that can’t be bought.

The brands that resonate, that people love – most famously Apple, of course, but there are other examples3 – are those that suprise and delight. In fact, those words are a central tenet at Apple, and one of the primary standards by which all products are measured. What few appreciate, though, is that when Steve Jobs bragged about not doing market research or not holding focus groups, he was not saying Apple did less than the competition; rather, they did so much more.

It is this lack of understanding and appreciation for the very hard work and deep thinking required to surprise and delight that leads to countless companies and Steve-Jobs-wannabes crashing-and-burning, even as they declare their fealty to design. What they don’t understand is that design is not just about looking good, or working well, or even being easy-to-use. The most fundamental part of design is truly understanding your customers at a deeper level than they even understand themselves. Moreover, to truly be design-centric is harder than being market-centric. Things like surveys and focus groups persist because, while the products that result may not inspire love, they don’t inspire hate – or worse, apathy – either.

Google’s People Problem

Interesting commentary Om Malik on Google’s latest moonshot – Smart contact lenses for people with Diabetes.

I cannot get over what seems to me a tone-deaf approach by Google’s scientists. It also highlights Google’s fundamental challenge: it fails to think about people as people, instead it treats them as an academic or an engineering problem. Instead of trying to understand the needs of actual people, they emerge with an elegant technological solution.

More from Abdel Ibrahim (HT Daring Fireball):

What Om effectively says in this piece is that while Google is thinking ahead, they aren’t thinking of everyday people.

And I agree. They’re creating a product that has the likelihood of being mass produced as a flying car. The truth is, with all the hurdles, let alone knowing how well it actually works, we have no idea if this will ever see the light of day.


But at least they’re trying, right? Absolutely. I’m glad they are. But it would be awesome if the brilliant minds at Google worked on something everyone reading this would actually want to buy. Not something we probably won’t see for years, maybe even decades.

That’s really what I’d like to see from one of the worlds most innovative companies. Show me a product that I can get excited about and then get in line to buy. Not something that promises incredible achievements, with no proof, and no timetable.

Time will tell how Google goes with this stuff. It does provide an important lesson for you as an innovator.

How do you keep people at the center of your work? What is value to customers? This is the question that we need to answer all the time. In the social space, it is a bit different but very similar. Sometimes it is technology. Take the question, How do solve the “digital divide” problem?. However, the digital divide is not an end by itself. It needs to mean something to people. It needs to create value. When we are working with some of the most disadvantaged people, it is quite important to not just see the differences from our point of view – it will be nice if they had internet and smartphones but more importantly how can we solve the biggest challenges they face and can the internet and smartphones help. People first.


The “C” of strategy

Strategy is about choices. These choices are not easy to make and the question that comes through always is where do you start.

There are basically three Cs that matter – Capabilities, Customers and Competitors (more broadly the environment a.k.a Porters five forces). One view of strategy is that the environment and the structure of the industry matter, hence, look at competitors and other forces. The other view of strategy is your capabilities matter. What are you good at? Make your strategy based on that. The third and more radical view is the focus on customer. As Drucker suggests : The purpose of a business is to create a customer.

In this process, you have a Create role – the vision and values that guide what you and why you do it.The final outcome for social impact work is change. An individual whose life is better because of the work you do.

In summary, you use your create lens to make choices about – Customers, Competitors and Capabilities. Where do you start? Lets take a look at Apple.

Ben Bajarin on Apple’s Strategy:

The broad claims that are made about what Apple should do are almost always based a round competitive reasons. Folks claim that because Apple’s competition is doing something that Apple should also or they will lose. Yet what I love about Apple’s strategy is that it is never around what the competition is doing. Apple marches to beat of their own drum. This is fundamentally mis-understood by so many. In fact, Apple’s strategy is best understood within the view that internally they literally believe they have no competition ( I personally believe this also but that’s the subject of a much longer essay.) Apple has customers not competition. The decisions they make as a company are not based around what their competition is doing but around what is best for their customers. Like it or not, this is their strategy.

In the start up world, the work of Steve Blank, Eric Ries, Ash Maurya and others has pushed forward this idea of focus on customers, not competitors. This is most uncommon for large organisations. In some sense, that is why Apple is special.

For social impact, it is a no brainer. You have to start with customers. You have to think about what is value for them and how you can create change. For that, you have to go outside your office. How do we do that? Lean Startups and Design Thinking.


Is the Age of Efficiency over?

The new year always brings in new thoughts and new plans for me. What about you? What are you thinking about changing in this new year? And, Happy New Year to you.

Victor Hwang writes in Forbes about the underlying spirit behind the start up movement around the world.

The Startup Movement is like a reboot of the human spirit.  Gary Whitehill, who has launched a series of Entrepreneur Weeks around the world, calls the era we are leaving behind the “Age of Efficiency.”  I think he’s right.  We are moving from an economic model that treats individuals as replaceable cogs in an anonymous yet efficient system, to one that recognizes that individuals are the only ones who can make the system better through their innovations, inventions, and creations.

The truth is efficiency or doing things faster, cheaper, better in solving social problems can’t work. We have examples of that everywhere. In the developed world, the child protection challenges, indigenous people’s standard of life, ageing challenges are growing by the day. In the developing world, basic water, electricity, education, primary health are missing. These are challenges that cannot be solved by doing what we are doing faster, cheaper, better. To be effective, we need a different way of solving these problems. That is innovation.

The age of efficiency is clearly over. Part of the work for innovators like you is to sell the need for innovation, the need for effectiveness vs efficiency.

One challenge that you will clearly face straight away is the discussion around cost. One of the assumptions behind efficiency is about driving down costs. But, who says innovation is not about driving down cost? If you look at what IKEA, the global furniture company, includes in its scope for any new product – price of the final product on the shelf. The designer needs to think about raw materials, manufacturing, production, marketing and other costs when creating the product. Cost is a design constraint. That is the best way to think about it. It is part of the innovation output.

So, go ahead, lets make innovation the key focus in 2014 to make the world a better place.

Business model Innovation at large organisations

HBR on why large organisations struggle at business model innovation:

Lack of top management support and attention 

Unlike other innovations, implementing a business model innovation often requires changes that affect multiple parts of the organizations. And while the R&D department can sponsor and push through a new product or technology, rolling out a business model innovation requires direct support from the top management.

Reluctance to experiment

Even the most brilliant business model innovation idea is just that: an idea.  It relies on a lot of assumptions and judgments, and in the absence of a crystal ball, the best tool we have is experiments. But established companies are surprisingly bad at experimenting.

Failure to pivot

Even when the company experiments with a new business model, it often fails to interpret the result of the test correctly and adjust an implementation plan accordingly. What may seem like a failed experiment might carry the message that an adjustment in the planned rollout of business model innovation is needed. And what looks like a successful test might not be really testing the most critical aspect of the business model.

Go outside for strategy

I am facilitating strategy workshops and consulting for organizations in the social sector and in my view for Strategy the most important information and skill we need is to go outside the office and talk to customers. See what’s happening and see their reality. Some organisations are genuinely good at that and some are not.

This is what Drucker said about 40 years back:

“Decision makers need organized information for feedback. They need reports and figures. But unless they build their feedback around direct exposure to reality—unless they discipline themselves to go out and look—they condemn themselves to a sterile dogmatism.”


Empathy as a starting point for innovation

Why co-design


Dana Silvers writing on design thinking and empathy. This matches up exactly with what we do at TACSI. I discussed how Strategy and Innovation in general starts with understanding customers. The starting point of that is Empathy.

Zakaras writes in his Huffington Post response,

In our efforts to solve difficult social problems in particular, we rely too heavily on reason and numbers and econometrics, and not often enough on empathy. And again, by empathy, I don’t just mean our emotions, and I certainly don’t mean feeling sorry — that’s sympathy. I mean the ability to truly understand the perspective of others, and to use that understanding to guide our actions…

Indeed, a great deal of our international development efforts, as well as the now-trendy philanthrocapitalism, have failed precisely because we looked at numbers and didn’t listen to people. Because we designed great mobile apps without bothering to see if women in India would actually use them. Because we don’t often enough approach problems with humility and we seldom solve them by unlocking agency in others.

This notion of truly understanding the perspective of others and using that understanding to guide our actions is exactly how empathy is used in design thinking. In the design thinking process, before you jump to solutions (“we need a mobile app,” “we need to redesign ticket purchase experience,” etc.) you start with building empathy for the people for whom you are designing. You engage with and observe those people and understand their needs and what is important to them before you even talk about your end product or solution.

She touches upon an interesting aspect of how design thinking is different from market research and what outcomes you can expect from this process.

In the design thinking process, empathy is the starting point in a process for innovation. We start with the needs of individuals because designing for individual needs often leads to greater insights and inspiration. The best solutions come out of the best insights into human behavior. When we design for average users, we may make incremental (but certainly valid and important) improvements to existing products, services, or experiences, but we typically won’t end up  with radical insights, innovative game-changers, or re-definitions of complex, messy problems.

This is what we call Radical Innovation, or as Drucker would call in terms of Strategy, What you business should be in the future?

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