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  Like Monsanto, Beiersdorf Group (number 14 on our original list), maker of Eucerin and a host of other skin-care products, invests considerable resources in experimenting with new products—and has done so since 1911, when it first launched Nivea facial cream. Beiersdorf develops most products at its Hamburg research center, the largest and most advanced of its kind in Germany (and perhaps the world). The research center’s work is symbolized by the unusual architecture of the auditorium—known by resident researchers as the “philosopher’s stone”—which is modeled on the structure of a skin cell.

  The Hamburg research center incorporates a test center where Beiersdorf tries out the effectiveness and tolerance of new skin products on some six thousand volunteers every year. The test center contains dozens of bathrooms and examination rooms with technology that can measure even the smallest changes in skin-cell structure. This facility enables testers to use products under real-life conditions, and enables Beiersdorf researchers to carefully monitor and document the effectiveness of various products. In one case, Beiersdorf discovered that testers weren’t getting the necessary UV protection from sunscreen because they weren’t applying it properly and, in most cases, they applied far too little. By experimenting with customers using sunscreen (and by using an innovative method by which the amount of UV protection on the skin is made visible and can be measured), Beiersdorf researchers made adjustments in consumer education and the products themselves to help customers achieve optimal protection.

  Of course, customer experiments happen only after Beiersdorf runs its own experiments. It tests each raw material and each combination of substances—including full cosmetic formulas—using special methods to ensure that they pose no health threat and are compatible with skin. It does this by testing cell cultures, as opposed to conducting animal testing (typical in other companies). Beiersdorf’s experimenting processes help it launch between 150 to 200 new products and apply for 120 to 150 new patents each year.

  Amazon’s Bezos also imprinted his penchant for experimenting on his company. “You need to do as many experiments per unit of time as possible,” says Bezos. “Innovation is part and parcel with going down blind alleys. You can’t have one without the other. But every once in a while, you go down an alley and it opens up into this huge, broad avenue . . . it makes all the blind alleys worthwhile.” One way Amazon conducts small experiments is by offering a pilot product or service to half of its customers and compares their response with the basic customer satisfaction of the other half. In similar fashion, Google has institutionalized experiments by using “beta” labels to release products early and often for public trials, allowing Google to quickly get direct customer feedback. It pursues innovation by having hundreds of small teams pursue—and pilot—new projects simultaneously. No wonder Google creates so many innovative new product and service offerings.

  Combining Discovery Processes to Produce Innovations

  Although we can deploy innovators’-DNA skills as separate processes to spark new ideas within teams or organizations, we can also use them in a connected way as a system. Innovation design firm IDEO does just that in teams. Kelley attributes IDEO’s success at innovating to its team processes. “We’re experts on the process of how you design stuff,” Kelley says. “We don’t care if you give us a toothbrush, a tractor, a space shuttle, a chair; we want to figure out how to innovate by applying our process.”4 So what processes does IDEO rely on to innovate? IDEO teams start with a questioning process, move to observing and networking processes to gather data about their initial questions, and conclude with an experimenting process where innovative ideas emerge and evolve through rapid prototyping. In 1999 the late-night news show Nightline highlighted how IDEO used these processes to completely redesign a shopping cart in five furious days. Today, IDEO takes the same approach in its quest for more innovative products and services with a variety of clients. For example, the processes formed the core of IDEO’s recent work with Zyliss, a maker of kitchen products, to completely redesign its kitchen gadget line, from cheese graters to pizza cutters to mandolines (slicers).

  Process #1: Questioning

  The IDEO project team began its quest for an innovative cheese grater (or pizza cutter, or mandoline) by asking a series of diverse questions to better understand the problems associated with using traditional cheese graters. What are the problems with cheese graters? What don’t people like about existing cheese graters? How important is safety? What other things do people want to grate with a cheese grater? Who are the “extreme users” of cheese graters (highly skilled and highly unskilled users) and how do their needs differ? As far as kitchen gadgets go, extreme users are cooks and chefs (those using kitchen gadgets for hours each day) as well as first-time or rare users of kitchen gadgets, such as college students, children, or the elderly.

  While IDEO’s team didn’t use our QuestionStorming method per se (see chapter 3), the team’s initial process looked very similar and centered on asking questions to better understand what to look for as it shifted to the data-gathering phase of observing and networking. As the team members asked questions, they wrote them on small sticky notes to easily rearrange and prioritize them. Matt Adams, a project leader at IDEO, told us, “By having the right questions, it becomes clearer how you might go about answering those questions.” Then the IDEO team gained a much better sense of “what to ask, how to ask it, and what kinds of people to ask” as it moved to the next processes, observing and networking.

  Process #2: Observing

  This phase involved sending the IDEO design-team members out into the field where they observed and documented customer experience firsthand. “Our process is to go in and try to really understand the people that you are designing for,” says Kelley. “We try and look for a latent customer need, a need that’s not been seen before or expressed in some way.”5 So the Zyliss team spent hours and hours observing various product users, particularly extreme users, in Germany, France, and the United States, trying to intuit what they were thinking and feeling. Team members took photos and videos of customers using kitchen gadgets to document what they noticed.

  Through observations, the team captured many problems with using traditional kitchen gadgets. For example, they saw that traditional cheese graters easily clogged, were hard to clean, and often required considerable dexterity for safe use. They noticed that the mandoline, a slicer well beloved by advanced cooks, presented severe safety hazards due to extremely sharp blades being exposed. They looked for ways to optimize ergonomics (ease of use), cleanability, and functionality. For example, they carefully observed hand and arm movements to make subtle adjustments in handle shape or tool angle for tremendous ergonomic benefit.

  Process #3: Networking

  As IDEO team members observed, they also talked to as many product users as they could about kitchen gadgets they were using. In particular, they visited with users while they were operating a particular kitchen gadget, because this is when users are most likely to offer ideas or insights about things they like and hate about it. Team members especially liked to talk to “experts” (e.g., full-time professional chefs or highly competent home cooks). They are the most demanding and difficult-to-please users and often have great product-improvement suggestions.

  Through unscripted conversations, IDEO team members gained critical insights for designing novel kitchen gadgets. They tried to gain deep empathy to the point that they could champion a particular user, such as a chef. They tried to understand what she loves, what her challenges are, and what’s really important to her, so they could share that person’s story later with other team members. Peter Killman, a project leader at IDEO, says that during the observing and networking phase, IDEO teams “go out to the four corners of the earth and come back with the golden keys of innovation.”6 Those keys, observation and idea networking, help unlock the doors to innovative ideas.

  Process #4: Brainstorming Solutions and Associating—the Deep Dive

  The
next phase involved bringing all the insights acquired through observation and interviews back to a brainstorming session that IDEO calls a “Deep Dive.” During the Deep Dive brainstorming session, everyone openly shared all the knowledge acquired during the data-collection phase (called “downloading”). It’s basically a storytelling session with lots of details about individual lives, in which team members capture insights, observations, quotes, and details and share photos, videos, and notes.

  The team leader facilitated the discussion, but there are no real titles or hierarchy at IDEO. Status comes from creating the best ideas, and everyone gets an equal opportunity to talk. After they shared ideas, the team members brainstormed design solutions to the problems they’d witnessed. To actively support associational thinking during the brainstorming phase, IDEO maintains a Tech Box at every office (full of a fantastic range of odd, unrelated things, from model airplanes to Slinkies). The team leaders spread the items out in front of the team to stimulate associational thinking as they brainstorm innovative product designs.

  Process #5: Prototyping (Experimenting)

  The final phase was “rapid prototyping,” in which designers built working models of the best kitchen-gadget ideas that emerged from the brainstorming session. Kelley describes the value of a prototype as follows: “You know the expression ‘a picture is worth a thousand words.’ Well, if a picture is worth a thousand words, then a prototype is worth about a million words . . . Prototyping is really a way of getting the iterative nature of this design going through feedback from others. If you build a prototype, other people will help you.”7

  IDEO took its kitchen-gadget prototypes to a variety of different product users—from chefs to college students to children—for feedback. For example, the new cheese-grater design has a large drum to grate cheese as it rolls and can grate more cheese (or chocolate or nuts) with less cranking. An optimized, clog-resistant tooth pattern provides maximum grating with minimal resistance for older users and people with small hands. The foldable and opposable hand crank makes for efficient drawer storage and for easy use by right- and left-handed users. These innovations are refined with each new prototype because IDEO “builds to think and thinks to build,” as Matt Adams put it. Taking the prototype out for a test drive is the fastest way to get great feedback on new product ideas.

  Systematically using an iterative process of questioning, observing, networking, and prototyping, IDEO successfully generates one new innovative design after another. IDEO’s processes encourage, support, and rely on innovation from everyone on the team. It’s no surprise then that John Foster, former head of talent and organization at IDEO, believes that “leadership is a group outcome,” especially innovative leadership.

  Our research shows that the DNA of innovative organizations mirrors the DNA of innovative individuals. Just as inventive people systematically engage in questioning, observing, networking, and experimenting to spark new ideas, innovative organizations and teams systematically develop processes that encourage and develop these same skills in employees. Moreover, as the IDEO example demonstrated, they systematically combine these processes into an overall process for generating novel solutions to problems. By creating organizational processes that mirror their individual discovery behaviors, innovative leaders can build their personal innovator’s DNA into their organizations.

  10

  Putting the Innovator’s DNA into Practice

  Philosophies

  “At Amazon we want to have the scope and scale of a large company, but the heart and spirit of a small one . . . If you want an inventive environment, you need multiple paths to ‘yes.’”

  —Jeff Bezos, founder and CEO, Amazon

  WHAT FOUNDATIONAL PHILOSOPHIES permeate the world’s most innovative companies? To tackle this question, we first explored the inner world of their entrepreneurial founders and senior executive teams. We asked about the philosophies and beliefs that kept their personal innovator’s-DNA skills in perpetual motion. The most frequent answer was, “I don’t know. It’s just the way I am.” They simply took it for granted that innovation was their job, not someone else’s. It was a core part of who they were. They devoted significant time and energy to hunting down new ideas. They pursued a range of innovative results, from incremental to disruptive, and didn’t see themselves as taking extreme risks in the process.

  Not surprisingly, the same innovators worked equally hard to infuse a parallel set of taken-for-granted philosophies deep into every nook and cranny of their companies’ culture (just as Bezos did at Amazon). They recognized that a culture is most powerful when widely shared and deeply held. So how did they do this? They knew that their own innovation example was an important first step to building a highly innovative company. They also realized it was impossible to personally lead or participate in every team and that they would have limited direct contact with most employees (especially as their companies grew). Given this, they worked hard to instill a deep, companywide commitment to innovation. Not only did their companies pay attention to picking innovative people and putting innovative processes into place, they also lived by a set of key innovation philosophies.

  Here’s what innovative entrepreneurs and executives told us about their innovation philosophies. We heard that innovation is everyone’s job. We learned that disruptive innovation is part of their companies’ innovation portfolio. We found out that having lots of small project teams, properly organized, is central to the way their companies took innovative ideas to market. Finally, we realized that they do take more risks than other companies in the pursuit of innovation, but they take actions that mitigate those risks, thereby turning them into “smart risks.” These four philosophies permeate the world’s most innovative companies and are not only expressed through words but punctuated powerfully through reinforcing actions.

  Philosophy #1: Innovation Is Everyone’s Job, Not Just R&D’s

  Innovation is obviously R&D’s job. We’ve never seen any company question this. However, we have witnessed significant debate in companies around the world about whether innovation is everyone’s job. In one organization, we found the chairman and CEO pitted against each other on this issue. The chairman was convinced that everyone should innovate, while the CEO took the opposite stance, believing that only R&D or consumer marketing should spend energy on innovation. While this debate raged at the top, the company launched a new initiative to focus everyone on spending some of their workweek discovering new products, services, and processes. It was no surprise that few employees jumped at the chance to innovate until they saw senior-level executives settle their debate.

  In rejecting the limiting belief that innovation is R&D’s job alone, leaders of highly innovative companies—such as Jeff Bezos, Elon Musk, and Marc Benioff—work hard to instill “innovation is everyone’s job” as a guiding organizational philosophy. When Steve Jobs returned to Apple after a twelve-year hiatus, he launched the “Think Different” advertising campaign. The ad paid tribute to a wide range of innovators, saying, “Here’s to the crazy ones. The misfits. The rebels. The troublemakers . . . the ones who see things differently. They’re not fond of rules. And they have no respect for the status quo . . . they change things. They push the human race forward.”

  The Emmy award–winning Think Different campaign was hailed as one of the most innovative of all time, largely because it inspired people. What most people don’t realize, though, is that the campaign targeted Apple employees as much as the company’s customers. “The whole purpose of the ‘Think Different’ campaign was that people had forgotten what Apple stood for, including the employees,” said Jobs. “We thought long and hard about how you tell somebody what you stand for, what your values are, and it occurred to us that if you don’t know somebody very well, you can ask them, ‘Who are your heroes?’ You can learn a lot about people by hearing who their heroes are. So we said, ‘Okay, we’ll tell them who our heroes are.’” To reestablish Apple’s innovativeness, Jobs knew tha
t every employee needed this message: “Our heroes are innovators. We stand for innovation. If you want to work at Apple, we expect you to be an innovator who wants to change the world.”1

  Arne Sorenson, CEO of Marriott International (number 20 on our 2018 most innovative companies list), argues that to be successful at his job he must create a culture that gives his team permission to innovate. “I think it’s critical that you communicate ‘You have permission to innovate. We’re going to reward you for innovating. We’re not going to penalize you for mistakes,’” Sorensen told us. “Today we have over 6,700 hotels around the world, and these represent 6,700 living labs. Each of them is led by leaders and motivated people, and if they feel like they have permission to innovate in their properties, they’re going to learn things that we can tap into and say, ‘What are the best ideas that are coming through that system?’”

  Of course, bold actions must follow bold statements to reinforce the message. P&G’s A. G. Lafley pursued the “we innovate” philosophy when he remarked, “The P&G of five or six years ago depended on eight thousand scientists and engineers for the vast majority of innovation. The P&G we’re trying to unleash today asks all hundred thousand-plus of us to be innovators.” To reinforce his commitment to organizationwide innovation, he actively solicited ideas from throughout the company, and if the concept showed promise, he put it into development. For example, Lafley backed a successful hair-care product line for women of color because a few African American employees explained to him that existing products didn’t work well and “we can do better.” P&G did better, launching a successful new line, Pantene Pro-V Relaxed & Natural. Lafley’s actions set the tone for a we-innovate philosophy to take hold. Yet key leaders’ personal actions alone are not enough. We saw that highly innovative companies, compared with typical companies, reinforce this philosophy by giving people more time and resources to innovate.