Can Your Culture Make Your Company More Innovative?

Well sure, but the issue for many is whether a company needs to change its culture to become more innovative. Much has been written on this topic over the last few decades as the idea of innovation as a driver of competitive value comes in and out of vogue. (To be fair, it is never really out of favor, just not necessarily the idea du jour).

In the 1980s to be innovative one needed to emulate 3M. In the early part of this century the seers suggested you emulate Apple. The problem is both companies have historically been innovators, but they do it very differently. If you attempt to emulate both, you will fail, and if you attempt to emulate something your culture won’t support, you will fail.

What appears to be solid research published a few years back supports an observation I have made over the years (thus I support the research results), and that is that there is more than one way to be an innovative company. Further, I believe that trying to do it other than “your” way will not produce useful results.

It is extremely difficult, if not nearly impossible, to change the culture of a company without changing a substantial number of the people who work in the company. This is impractical for most companies, so unless the culture of your company is anti-innovative, changing the culture should be your last option. The question then is how do you leverage your existing culture to be more innovative.

In their Harvard Business Review article, Wunker and Pohle note from their research that there are four distinct innovation archetypes that produce effective innovation. Further they note that one is not “better” than another. This suggests that your company should select the archetype that most closely aligns with your culture.

The first archetype is the Marketplace of Ideas. This is the approach used by 3M and Google. In this archetype people are free to explore ideas that may be helpful to the company and to use 10%-15% of their time in exploring these ideas. Ideas are presented to decision committees and those committees select the ideas that will be further funded. Just because an idea is rejected does not doom it and the idea champion can continue to work on it (albeit with limited funding) in an attempt to gain support. Post It Notes were famously developed this way. W.L. Gore is an extreme example of this archetype. The key here is that the innovation driver is bottom up, not top down.

The second archetype is the Visionary Leader. Apple has used this archetype since its inception. In this approach the team executes on the leader’s ideas. It is incumbent upon the leader to realistically understand what the company is capable of doing well.

The third archetype is Systematic Innovation. This approach is used by many companies and is the core approach taught by Eureka Ranch. In this approach innovations are focused in support of the company’s strategy and will be incremental, significant or breakthrough in nature depending on the strategy of the company. This approach is top down as opposed to the Marketplace of Ideas, which is bottom up.

The last archetype is the Collaborative approach. In this model, innovations are created by using outside partners. The movie industry uses this approach for most of its innovations. The major studios obtain innovative products from outside developers. Some of the more recent studios such as Lucas Films and Dreamworks do not use this approach. The Spin Toothbrush from Crest (Proctor and Gamble) was developed outside of the company using this approach. The success of this approach requires access to and partnership with innovators outside your company, and that you not have an NIH (Not Invented Here) culture in your company.

When I present these archetypes as part of my presentation, Managing For innovation, some executives ask if they can be a mix of two of these approaches. My response is not and be successfully innovative. Each of these approaches requires a distinctly a different culture and it is likely your culture is better aligned with one than the others. Figure out which one that is and then learn to implement that archetype excellently.

Mitch

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Up Yours: How To Sell At Higher Prices

I’m excited to announce my new e-book on pricing. In a series of 22 short chapters I show you how others have successfully used effective strategies to sell at higher prices. Studies by Harvard and McKinsey prove that the most effective way to increase profits is not by cutting costs, but rather by raising prices.

Many of us are reluctant to do that; usually because we believe that raising prices will cost us lost sales that may be more than the increase in prices generate. The examples in this book can help you see differently what you can do to increase your bottom line.

And, it’s only $4.99 in the Amazon Kindle store.

Mitch

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No Super Bowl Ad Review This Year

I didn’t watch the Super Bowl this year so I’m not going to review the ads as I’ve done the last several years. I didn’t watch the Super Bowl for three reasons.

  1. I usually always watch so I can review the ads. But since virtually all the ads are run online before the game at this point, who cares. It’s not special anymore.
  2. I don’t hate the Patriots and I have no other affinity for either team.
  3. I am not happy with the NFL and their stand on the National Anthem vs other actions they forbid because they choose to

I’m in a minority of people who didn’t watch the game, but then I am also one of a few people who people who’ve never seen an episode of The Game of Thrones.

My last thoughts on the reduced viewership of the NFL this past season is best summed up by a quote from Yogi Berra: “If people don’t want to come out to the ballpark, nobody is going to stop them.”

Mitch

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How Do You Know If It Is Good Enough?

I found a good article in Entrepreneur Magazine discussing the frustrations of perfection vs good enough. As the title states, the author provides two questions she feels you should ask to help you know when good enough really is. Her questions are valuable, but not the one I would ask.

My question is how does the customer feel about it? As I have mentioned in earlier blog posts, good enough is the metric that matters for customers. Charging for more than your customer wants makes you over-priced. Providing less than the customer needs, wants and demands causes them to look elsewhere. It’s good enough when your target customer says so. Period.

That being said, there is a challenge. What was good enough yesterday may not be good enough tomorrow. Many years ago I worked with a company that provided equipment services to hospitals. Average turn-around time was a week. This company did it in 2-days for about the same amount of money. They raised the bar. The challenge for the CEO came when a competitor came in with 24 hour response. His initial comment was: “Those customers don’t remember how bad it used to be.” Doesn’t matter, the game is changing.

UPS delivered in 2 weeks with no tracking. Fed Ex adding overnight and tracking. They changed the definition of good enough. Amazon got us all used to free shipping and 2-day delivery, which is becoming 1-day in many cases.

Good enough is a moving target. Stay connected to your customers and you won’t miss out or focus in the wrong areas so you add costs without adding value.

Mitch

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Back to the Future in Retail

As you may know, Amazon is moving more and more into brick and mortar. They are opening book stores, while others are closing. They bought Whole Foods, which may soon no longer be referred to as “whole paycheck,” and they are opening convenience stores.

The convenience stores, Amazon Go, are fully automated. You simply pick the items you want and walk out. Using an app, the “store” knows what you bought and they bill you via your credit card. Now that is true convenience.

Amazon is clearly doing what most other retailers have stopped doing and that is understanding what retail customers want in their in-store experience. Different shoppers in different stores want different experiences, and most retailers have stopped understanding that, and their sales show the results.

Perhaps more importantly, Amazon Go is doing something Sears pioneered over 100 years ago, long since forgot and their closing stores reflect it: the vast majority of customers are honest and it doesn’t pay to treat them as thieves to prevent the very few from cheating you. Thus was created the “satisfaction guaranteed, or your money back.” Younger readers may not recognize that slogan as Sears long ago abandoned the idea along with many (now most) of their customers.

Amazon Go gets it, as evidenced by a CNBC shopping experience.  They ended up with a single serve yogurt in their bag they weren’t charged for. They reported it to Amazon and the VP’s response was pure ‘old day Sears’: “First and foremost, enjoy the yogurt on us,” Puerini said. “It happens so rarely that we didn’t even bother building in a feature for customers to tell us it happened. So thanks for being honest and telling us.”

Next time you hear about the demise of brick and mortar, consider what I have said for years: It’s self-inflicted.

Mitch

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Maybe It Isn’t Slipping Away, It’s Being Pushed Away?

Yesterday I posted about a recent (current) experience with the once great company, FedEx. Turns out some of what I reported yesterday was wrong, which only makes things worse.

The package was not sitting in Sacramento for 2+ days without moving. That was me misunderstanding the graphic display of information provided by the FedEx tracking system. I discovered this when the package actually got to Sacramento yesterday afternoon. If you take a look at the tracking report below, you can see what I am talking about. (You’ll need to click on the image to get it bigger so you can see what I am talking about.)

Turns out the package has not been in Sacramento since Sunday but rather on its way there. This becomes clear when you see that last night it arrived in Sacramento. This is a BIG difference. And here is my question (without regard to what I believe is a confusing display of tracking information), why did a level one and a level two customer service person tell me they did not know why the package was in Sacramento since Sunday. It wasn’t! The fact that I misunderstand the information is what it is, but how could two customer service people trained and employed by FedEx not know that the package was not actually in Sacramento?

Does FedEx have a training or a performance standards problem? I doubt they know because I doubt they even know this silliness is going on. Why? Simple, they have no ability to know because there is no feedback mechanism in their system. Without feedback how would they know?

It used to be the recipient was equally important to FedEx as the shipper because the recipient could also become a shipper. Not really anymore. Most big shippers know and use (or not) FedEx. Until and unless enough people complain about FedEx they won’t care. And when that finally happens, what will they do? The same thing all entrenched, established companies with dominant market share do when people have had enough … scramble to fix it assuming they can and it isn’t too late.

BTW, the FedEx logo is upside down on purpose. That is the international sign of a vessel in distress.

Mitch

 

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When Greatness Slips Away

FedEx used to be a great company. When it absolutely, positively had to be there overnight… And if you wanted to know what was going on with your package, great people were there to help. Now they seem to be morphing into the USPS. What happened? Is it just inevitable that great companies can’t sustain it once they get bigger? Maybe it’s tougher, but I don’t accept that its inevitable.

Today FedEx has a great online package tracking system. But what happens if the online system makes no sense? For example, why has my package been sitting in the Sacramento facility for 2 full days, going on 3 without moving towards me. After all, it is only about 2 hours away.

Calling FedEx, a clearly off-shored person simply reads me what is on the website about my package. When I explain to her that I can read that, she says, well that’s all I can do. So is her purpose just to help those without internet access? When I pushed, she offered to get someone else to help me.

That person, also read me what was on the website. When I asked why it was in Sacramento for 2+ days she said because of the weather (that was also on the website, but the weather is in Memphis, not Sacramento). When I pointed this out she offered to open a case, which would take 48 hours to resolve. Since the package is promised in 36, I said never mind. Two people no more helpful than customer service at USPS.

Why would I pay extra to ship it FedEx anymore? I can get “don’t care” service from USPS for a lot less.

What happened to FedEx?

Mitch

 

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