Innovator's DNA Read online

  FIGURE 1-3

  The business- and executive-skill life cycles

  The Discovery- and Delivery-Skills Matrix: How Innovators Stack Up

  To test the assertion that innovative executives have a different set of skills than typical executives, we used our innovator’s-DNA assessment to measure the percentile rank of a sample of high-profile innovative entrepreneurs (founder CEOs of companies on Businessweek’s list of the top one hundred most innovative companies) on both the five discovery skills (associating, questioning, observing, networking, experimenting) and the four delivery or execution skills (analyzing, planning, detail-oriented implementing, and self-disciplined executing). We averaged their percentile rank scores across the five discovery skills to get an overall percentile rank, and then did the same thing across the four delivery skills to get an overall percentile rank. We refer to the overall percentile rank across the five discovery skills as the “discovery quotient” or DQ. While intellectual quotient (or IQ) tests are designed to measure general intelligence and emotional quotient (or EQ) assessments measure emotional intelligence (ability to identify, assess, and control the emotions of ourselves and others), discovery quotient (DQ) is designed to measure our ability to discover ideas for new ventures, products, and processes.

  Figure 1-4 shows that the high-profile innovative entrepreneurs scored in the eighty-eighth percentile on discovery skills, but only scored in the fifty-sixth percentile on delivery skills. In short, they were just average at execution. We then conducted the same analysis for a sample of nonfounder CEOs (executives who had never started a new business). We found that most senior executives in large organizations were the mirror image of innovative entrepreneurs: they scored around the eightieth percentile on delivery skills, while scoring only above average on discovery skills (sixty-second percentile). In short, they are selected primarily for their execution skills. This focus on execution is even more pronounced in business unit managers and functional managers, who are worse at discovery than typical CEOs. This data shows that innovative organizations are led by individuals with a very high DQ. It also shows that even within an average organization, discovery skills tend to distinguish those who make it to the highest levels of the organization. So if you want to move up, you’d better learn how to innovate.

  FIGURE 1-4

  Discovery- and delivery-skills matrix

  During the growth stage, the innovative entrepreneur may well leave the company, either because she has no interest in scaling the idea (which involves boring and routine work, at least to her) or because she does not have the skills to manage effectively in a large organization. Innovative entrepreneurs are often described as poor managers because they lack the ability to follow through on their new business ideas and are often irrationally overconfident in them. Moreover, they are more likely to make decisions based on hunches and personal biases than on data-driven analysis.13 Not surprisingly, the conventional prescription for these problems is to replace the entrepreneurs with professional managers—individuals with proven skills at delivering results. At this point in the business life cycle, professional managers who are better equipped to scale the business often replace the entrepreneur founders. When such replacement occurs, however, key discovery skills walk away from the top management team.

  With the founder entrepreneur out of the picture, the ensuing growth and maturation stages of the business life cycle begin. In these stages, managers generally make it to the top of the management pyramid through great execution. This may involve generating incremental (sustaining) innovations for existing customers, but the focus is on execution, not building new businesses. Surprisingly few companies in this stage pay systematic attention to the selection or promotion of people with strong discovery skills. As this happens, the lack of discovery skills at the top becomes even more glaring, but it is still not necessarily obvious. (Contrast these common practices with those of Amazon founder Bezos, who systematically asks any new hire, including senior executives, to “tell me about something that you have invented.” Bezos wants to hire people with an inventive attitude—in other words, people like himself.)

  Eventually, for most organizations, the innovations that created the business in the first place complete their life cycle. Growth stalls as the business hits the downward inflection point in the well-known S curve. These mature and declining organizations are typically dominated by executives with excellent delivery skills. Meanwhile, investors demand new growth businesses, but senior executive teams can’t seem to find them because the management ranks are dominated by folks with strong delivery skills. With discovery skills largely absent from the top management team, it becomes increasingly difficult to find new business opportunities to fuel new company growth. The company once again starts to see the imperative for discovery skills.

  In sharp contrast, when entrepreneur founders stay through the growth stage, the company significantly outperforms its peers in growth and profitability.14 An entrepreneurial founder is far more likely to surround herself with executives who are good at discovery, or who at least understand discovery. Could Apple have built new businesses in music (iTunes and iPod) and phones (iPhone) on top of an older computer business without the return of Jobs? We doubt it.

  The key point here is that large companies typically fail at disruptive innovation because the top management team is dominated by individuals who have been selected for delivery skills, not discovery skills. As a result, most executives at large organizations don’t know how to “think different.” It isn’t something that they learn within their company, and it certainly isn’t something they are taught in business school. Business schools teach people how to be deliverers, not discoverers.

  For a moment, consider your company’s track record of rewarding and promoting discovery skills. Does your company actively screen for people who have strong discovery skills? Does your company regularly reward discovery skills through annual performance assessments? If the answers are no, then it is likely that a severe discovery-skill deficit exists at the top ranks of management in your company.

  You Can Learn to “Think Different”

  In this chapter, we’ve tried to convince you that creativity is not just a genetic predisposition; it is an active endeavor. Apple’s slogan “Think Different” was inspiring but incomplete. Innovators must consistently “act different” to “think different.” We acknowledge that genetics are at work within innovators, and that some have superior natural ability at associational thinking. However, even if two individuals have the same genetic creative ability, one will be more successful at creative problem-solving if he or she more frequently engages in the discovery skills we have identified. We believe that by understanding—and engaging in—the five discovery skills, you can find ways to more successfully develop the creative spark within yourself and others. Read on as we describe how to master the five discovery skills in order to become a more innovative thinker.

  Discovery- and Delivery-Skills Quiz: What’s Your Profile?

  To get a quick snapshot of your discovery/delivery-skills profile, take the following self-assessment survey (1 = strongly disagree; 2 = somewhat disagree; 3 = neither agree nor disagree; 4 = somewhat agree; 5 = strongly agree). Remember to answer based on your actual behaviors, not what you would like to do.

  Frequently, my ideas or perspectives diverge radically from others’ perspectives.

  I am very careful to avoid making any mistakes in my work.

  I regularly ask questions that challenge the status quo.

  I am extremely well organized at work.

  New ideas often come to me when I am directly observing how people interact with products and services.

  I must have everything finished “just right” when completing a work assignment.

  I often find solutions to problems by drawing on solutions or ideas developed in other industries, fields, or disciplines.

  I never jump into new projects and ventures and act quickly
without carefully thinking through all of the issues.

  I frequently experiment to create new ways of doing things.

  I always follow through to complete a task, no matter what the obstacles.

  I regularly talk with a diverse set of people (e.g., from different business functions, organizations, industries, and geographies) to find and refine new ideas.

  I excel at breaking down a goal or plan into the microtasks required to achieve them.

  I attend conferences (on my areas of expertise as well as unrelated areas) to meet new people and understand what issues are facing them.

  I pay careful attention to details at work to ensure that nothing is overlooked.

  I actively seek to identify emerging trends by reading books, articles, magazines, blogs, and so on.

  I hold myself and others strictly accountable for getting results.

  I frequently ask “what if” questions that provoke exploration of new possibilities and frontiers.

  I consistently follow through on all commitments and finish what I’ve started.

  I regularly observe the activities of customers, suppliers, or other organizations to get new ideas.

  I consistently create detailed plans to get work done.

  To score your survey:

  Add your score on the odd-numbered items. You score very high on discovery skills if your total score is 45 or above, high on discovery if your score is 40 to 44, moderate to high on discovery if your score is 35 to 39, moderate to low if your score is 30 to 34. You score low on discovery if your score is 29 or less.

  Add your score on the even-numbered items. You score very high on delivery skills if your total score is 45 or above, high on delivery if your score is 40 to 44, moderate to high on delivery if your score is 35 to 39, moderate to low if your score is 30 to 34. You score low on delivery if your score is 29 or less.

  We have drawn this short survey from a more systematic seventy-item assessment (either a self-assessment or a 360-degree assessment) that we have developed to assess an individual’s discovery skills and delivery skills. You can do this assessment through our website at https://www.InnovatorsDNA.com. Should you decide to complete an assessment, you will receive a development guide to walk you through your results and help you design a skill-development plan. Your assessment will provide you with your DQ and percentile data for each discovery and delivery skill to let you compare your scores with the over five thousand executives and innovators in our data set.

  4

  Discovery Skill #3

  Observing

  “Observation is the big game changer in our company.”

  —Scott Cook, founder, Intuit

  MOST INNOVATORS ARE intense observers. They carefully watch the world around them, and as they observe how things work, they often become sensitized to what doesn’t work. They may also observe that people in a different environment have found a different—often superior—way to solve a problem. As they engage in these types of observations, they begin to connect common threads across unconnected data, which may provoke uncommon business ideas. Such observations often engage multiple senses and are frequently prompted by compelling questions.

  Consider, for example, how Doug Dietz, an industrial designer at General Electric, gained a powerful insight that inspired the creation of an entirely different MRI scanner. After two long years of leading the design of GE’s newest MRI machine, Dietz could barely contain his excitement as he almost ran through the hospital and made his way to the imaging rooms. “I was so excited to see this first product that we installed,” recalls Dietz. “I was very proud. I was just a proud papa basically.”1 When Dietz arrived at the room, the technologist informed him that a patient was coming in and asked if they could visit after the patient’s scan. So Dietz stepped into the hallway and saw a young family approaching. As they got closer, Dietz could see that a young girl, around the age of seven, was crying. Her father leaned down and said, “Remember, we talked about this. You can be brave.”

  As the family entered the MRI-scanning room, Dietz couldn’t help but follow. He watched as the young girl entered the room, looked at the machine, and froze. Dietz had just been in the same room looking proudly at his creation. But now, for the first time, he saw the room from the eyes of a crying seven-year-old girl. “I had just been in that room doing my happy dance,” says Dietz. “Now, looking at it from her angle, I realize this is something totally different. On the wall is that horrible warning sticker. It’s got the magnet and the big exclamation point. It’s got that yellow and black tape on the thing, almost like an accident scene. Everything looks really beige. It’s got this weird colored flooring and just everything’s bleached out. Then the room itself is kind of dark and it has those flickering fluorescent lights. The machine itself that I designed basically looked like a brick with a hole in it. Then, of course, an MRI machine makes just a terrible noise.”2

  What happened next changed Dietz’s life forever. “The little girl just starts to really cry,” he recalls. “She’s just breaking down. I’m standing behind and I see these parents. They’re looking at each other and they don’t know how they’re going to get their child through this. That was a huge awakening for me.”3

  This observation prompted Dietz to do some research. How many young children were having a similar type of experience? And what could be done about it? Dietz learned the sad truth that 80 percent of children (under the age of eight) needing this type of scan had to be sedated in order to get a quality scan. To get a good scan the patient had to lie still. But lying still when you are crying is next to impossible. So Dietz set out to design an MRI-scan experience that would eliminate the trauma.

  He started by putting together a team that studied environments in which children were not afraid to explore. He undertook observations at day-care centers and children’s museums, such as the Betty Brinn Museum in his hometown of Milwaukee. He initiated brainstorming sessions with the museum director and her staff while at the museum. He and his team brainstormed with day-care workers, hospital radiologists, nurses, and child-life specialists. They even had children of grade-school age participate in the process of designing a completely different MRI-scan experience. And when he was done, Dietz created the GE Adventure Series scanners—which provide a scanning experience that is like no other.

  Dietz loves describing the different “adventures” that GE has created for scanning patients—and he calls each one his “favorite.” In one room, a light-blue sky is painted on the walls and is cascading down to the scanner, which has graphics that make it appear like a hollowed-out log or canoe on water. Behind the scanner is a waterfall that cascades off the wall and comes down underneath the scanner, and there’s a koi pond that comes out below. Says Dietz,

  What’s magical about this room is when you go in there we tickle all the senses. We have aromatherapy in there, and we have a water scent that’s a nice soothing scent, has a little lavender that is kind of relaxing. The scanner table actually looks like it lowers down into the water, and it’s a hollowed-out canoe. There’s a reason they are laying down on their back in this hollowed-out log, and then they [hospital staff] tell them, “This is kind of like a boat, and you need to hold still. It’s real important, so you don’t rock the boat.” Then this is the magic. If you really hold still, the fish will start jumping over the top of you. These kids are like statues, they’re frozen. And of course, our detectors there slowly start to go around and these kids see the fish jumping and they just love it.4

  Dietz and his team have created a pirate adventure, a beach adventure (with piña-colada aroma), a camp adventure, and a space adventure. Dietz reports that sedation rates have dropped from 80 percent to less than 1 percent. This lowers costs but also saves time, allowing hospitals to increase their patient volume, because they are able to do more scans in a day. Patient-satisfaction scores have increased by 92 percent. But while Dietz is gratified by the numbers—and the burst of sales for GE Adventure Series
scanners—he says that he doesn’t measure success as a result of those positives. He measures success by turning tears to smiles. Indeed, Dietz knew the experience had really worked one day as he watched a little girl tug on her mom’s shirt after the scan. “The little girl keeps coming up and she’s pulling on her mom’s shirt,” Dietz recalls. “About on the second or third time, the mom interrupts and she goes, ‘What is it, honey?’ The little girl looks up at her mom and she says, ‘Can we come back tomorrow?’”5

  A Framework for Observing: Look for the “Job” and a Better Way to Do It

  IDEO’s Tom Kelley, author of The Art of Innovation, has written that “the anthropologist’s role is the single biggest source of innovation at IDEO.”6 Why does he believe this? Anthropologists have developed techniques to study humans in their natural environments and learn from their behavior. Pretending that you are an anthropologist can be especially powerful when you watch someone in a particular circumstance trying to “do a job,” to use Clayton Christensen’s terminology in The Innovator’s Solution and Competing Against Luck. Christensen has argued that customers—people and companies—have “jobs” that arise regularly and need to get done. When customers become aware of a job that they need to get done, they look around for a product or service that they can “hire.” When people have a job to do, they set out to hire something or someone to do the job as effectively, conveniently, and inexpensively as possible. Observing someone in a particular circumstance can lead to insights about a job to be done—and a better way to do it.