Transcript

Kurt
WELCOME TO THE IN90 Academy, where you will learn how to turn your ideas into reality in only 90 days. I'm your innovation coach, Kurt Baumberger. Let's get started.

I'm here with our Storytelling and Interview coach, Bob Rathbun.

Bob
Hey Kurt, what's our topic today?

Kurt
Well, in this podcast we're going to talk about the five secrets to build executive support for your idea. We're going to explain why it's important to use a vulnerability map to demonstrate how dangerous it is to just make incremental improvements. Then we're going to go over the IN90 framework; a Design Thinking approach to systematically strip out idea risk, product risk and market risk. The third thing we're going to talk about is the importance of being visual to get excitement and interest in your idea. Fourth, we're going to talk about how to select a big problem to tackle. And the fifth thing is how to use Agile Development to turn your idea into something tangible in 90 days. If you leverage all these secrets, you'll be in a great position to secure an Executive Champion.

Bob
Kurt, before we get started, this has been going on for eons. Why is it so hard to get executive support for a new idea?

Kurt
It's really pretty simple. Executives are risk averse. They only have so much political capital that they're willing to put at risk for your new idea. So if they're going to be successful over time, they want to bet on sure things.

But here's the rub. Innovation is a journey into the unknown. Innovation is completely uncharted. So how can you have innovation and a sure thing at the same time? That's the conundrum.

There have been lots of books written about it called The Innovators Dilemma. Fundamentally, it comes down to executives only feeling safe with product improvement, performance enhancements or a bunch of small little changes disguised as innovation . Executives see innovation as dangerous and as good stewards of the organization they are afraid to lead the organization down an irresponsible path.

Doing something that's different is scary. It's dark and dangerous out there in the unknown. Executives don't want to be the person that falls on their sword. It boiled down to wanting innovation but lacking the courage to do it.

One of the things I find very funny is hearing clients say they want to be as innovative as Apple.

Bob
Really?

Kurt
What they don't understand is that when Apple changes their operating system, they do it on every single device in every country around the world and they do it all at the same time. That is an incredible appetite for risk. When you put it in that perspective, then you realize that you may not actually have what it takes to be like Apple.

But they still want to learn what Apple does so they can replicate it. And there's some value in that approach, but, ultimately, you've got to figure out what your organization can take and what it can actually deliver. Getting executive support is understanding the environment in which you're operating. That's the first and most important thing. Know thyself.

Bob
It seems like executives experience two different types of fears. There's the fear of the unknown - I don't know what the innovation should be like, what it looks like, what it feels like or what it tastes like. Then, there's the other fear of looking around at all their buddies in other businesses that have been disrupted and saying, "I can't have that happen to me! I can't be out of business in five years from now." Do you sense there are two different types of fears?

Kurt
I'd say there are those two fears and a third one. The fear of being disrupted is something called the Black Swan theory. The Black Swan theory is a metaphor that describes an event that comes as a surprise and has a major effect. The importance of the metaphor lies in the analogy to the fragility of any system of thought that can be undone once its fundamental postulates are disproved. In other words, if one thing about your theory of thought is wrong, then the whole thing falls apart. That's the problem with taking a narrow view of the world. Yet, that's what most executives do.

The second fear is very common. I've hear many executives say, "I don't know what I don't know." The only way to know is to bring in somebody from the outside because you need somebody with a fresh set of eyes to look at your business and its problems. The ideal outsider is someone who can look across industries and then look deep within your core functions.

The folks at IDEO consulting and Stanford University call these people "T shape thinkers". If you imagine the top of the "T" that runs horizontally, that's having the experience of looking at a lot of different industries to see what's happening. The base of the "T" that runs vertically, that's having deep subject matter functional expertise. These are the people who can tell you what you don't know and can tell you where the Black Swans likely to come from.

The third fear comes from the fact that over 80 percent of CEOs claim innovation is one of their top three strategic priorities. Yet, only 6 percent of those same CEOs believe that they have the people to execute. Think about that. A CEO has a very important strategic initiative for their company, but I doesn't believe the company can achieve it.

They don't believe they have the people. They don't believe they have the process. They don't think they're going to be able to execute any big ideas. That represents an anxiety producing gap between need and capability. And it's not just the CEOs that feel it. Everybody in the organization feels it.

You may think that everything's OK, but if you go out for a cocktail after work and sit around with your buddies, they're worried. They're wondering, "What if this happens? What if that happens?" The whole organization becomes insecure and, as an executive, you've got to give people the creative confidence to bring their ideas forward.

If you don't instill that confidence, then ideas are never going to get the support that they need to blossom and grow. Executives need to recognize they are not there to manage, but lead. They are a leader of people and they need to provide a safe environment for their people to follow them. And if you're operating in a culture where people are afraid or they feel like the consequences of doing something innovative are going to be negative, then there's no incentive to stick your neck out. The leader can say all they want, but the people aren't going to follow if they are fearful.

Bob
Is one of the sources of fear the speed with which change comes about these days?

Kurt
Absolutely. There's a reserach finding that over 90 percent of projects die after their 91st day of life. So unless you are able to deliver something quickly, then you're not going to create the political capital necessary to move things forward.

Google does something that's very interesting. They decide how long a project should take and give people who are on the project team access to a war room for all their materials. But they put an expiration date on the card key granting access to that room. And it's called an "expiration date."

Everytime a project team member swipes their card to gain access, they will see how many days they have left on the project. So not only do you feel internal pressure to perform, there is now an external reminder that days there are only "x" number of days before this projects is over. Team members start thinking, "We've got to deliver. We've got to build up some wins." It changes the mental model that people need to have to think about innovation - speed matters.

Unless you move quickly and deliver those quick wins, then you're out of luck. Because over time, priorities change or budgets change. Project teams disintegrate because somebody gets promoted, or somebody might become ill, or somebody might retire, or somebody might take another job or whatever. The team breaks up. Unless you deliver quickly, you're not going to create the momentum that the executive needs to invest more resources. And building quick wins is critical. You've got to find a way to build in quick wins in order to keep your executive support.

Bob
We're talking about getting and keeping executive support. Kurt, you've shared with us great thinking that's on the cutting edge to build executive confidence. Is there another way to build executive support beyond moving fast? How can you build something that's tangible? How can we show, "Here's where we are. Here's what we've built. Here's where we're going"?

Kurt
One thing organizations and executives love is process. If you think about it, every organization is structured to optimize their processes to deliver value efficiently and effectively. When you give them an innovation process that shows them how they can systematically strip out risk, then they feel a lot more confident in it. Innovation no longer happens in a "black box."

There's a process we use called the IN90 framework. It is designed to strip out three kinds of risk. The first risk getting stripped out is the idea or the concept risk. In other words, do you have a good idea? Because not all ideas are good ideas. I know we say there are no bad ideas in brainstorming sessions, but that's not true. Not all ideas are good ideas. You have to see if your idea resonates with people. We call this process finding out, "What's desirable?" You need to determine what people want or need that will make their lives significantly better.

The next step in the process is to determine, "What's feasible?" So we have an organization that has certain assets, but it also has certain processes and it has certain technologies and it has certain people. What you need to do is find out how is your innovation going to dovetail with what's already there because you want to build something that's feasible that can be executed and that will strip out all of the product risk.

The last risk is viability risk. Can we make money and can we deliver on this thing? When you're looking at viability, you're really looking hard at cost structures and revenue streams. And I say cost structures "plural" because how you deliver today can come in many different forms. If you're distributing everything over the Internet, your cost structure might be very low. But you may also need to deliver the same thing in person or go through a retail channel. Each channels has a different cost structure. So you've got to look at multiple cost structures and the associated revenue.

Next, you've got to focus on who's going to adopt your product first. And you want to make sure they are "Lighthouse Customers." We call them lighthouse customers because they show the light and people can actually see what they're doing and they tend to follow and benchmark against them. These are the customers you need to co-create with because of their power as an influencer. They will help you set up the next group to adopt your innovation.

As an example when I was working on the Nissan LEAF, the first people that came onboard wanted to buy the Nissan LEAF because they wanted to do something good for Mother Earth. They thought electric vehicles were great things and a fantastic way to demonstrate how they cared about the earth. Nissan sold tens of thousands of cars that way. But the next group to buy wanted to know a little bit more. They wanted to know "How far can I go in this earth saving vehicle? Where can I plug in to get recharged? How exactly does this vehicle work?" They were a little more practical but not overly into the weeds on why I should buy this thing. And, this group bought fifty thousand to one hundred thousand more Nissan LEAF vechicles.

Well, now Nissan is trying to reach more mainstream consumers. This group is saying, "OK, what I really want to know is how much am I saving in gas versus electricity? What tax incentives are out there? What other benefits exist like driving in the HOV lane? What's the residual value?" The mainstream consumers are getting down into the nitty gritty. For this group of consumers, the value proposition has changed significantly. The first value proposition centered on taking care of the earth. The second value proposition focused on a smart way to get around town because it's easy and simple. The third value proposition needed to demonstrate a clear economic case versus a gas powered vehicle.

These changing value propositions need to be laid out so you can show how you'll strip out risk over the length of the product lifecycle. When executives see that there's a very clear process of moving forward, it gives them comfort and when they have comfort, then they suddenly have confidence and when they have confidence then they can have conviction. But they'll never move from comfort to confidence to conviction unless you show them the process. The process drives everything.

Bob
What you're really speaking about in this particular lesson is the value of the feedback that you're getting along the way.

Kurt
Absolutely. Because when you are putting things out there and you're experimenting, what you're really trying to do is find out what's wrong with your idea, not what's right with it. And yet, so many products and services get paraded out into the marketplace and market researchers want to know well what do you like about it. They ask questions like: What's your propensity to buy? How often do you think you'd buy? What would trigger you to buy? Well, those questions never give you any answers that you can believe. Usually people want to be nice and say, "Oh yeah, I'll think about it" or "Yeah, I'd consider that." But that's not how they're really going to behave.

What you want to know is what they don't like about your idea and why they don't like it. People can articulate what they don't like very clearly. This helps you learn what to change as you go through a series of prototypes. You need to understand that 50 percent of what you're assuming in your first prototype is going to be right and that means 50 percent is going to be wrong. But if you just go into the marketplace knowing 50 percent will be wrong, then you're really creating a learning environment. If your mindset is focused on "what I can learn" from taking this prototype out into the market that will help inform my second prototype, then you'll be able to make a quantum leap in improvements in your second prototype. We know that the feedback on your second prototype will help you make a quantum leap on your third prototype. After your third prototype, we find you will mostly be making just incremental improvements.

But you have to be able to be willing to be wrong in order to be right. And that's the conundrum that executives often don't like. They don't like being wrong. But it's incumbent upon them to lead this culture shift from a fear of failure to make it more of a learning environment. They need to be asking, "What are we learning? How can we be significantly better in the next version? How can we be patient enough to reach version 3.0 when you've pretty much commercialized your idea? How can we hold back everyone rushing to find ways to be more systematically efficient and more productive on delivery? After all, this is what people in large organization do best. But unless you're patient enough along the way, you're not going to make the quantum leaps in your original idea that may end up being nothing like you had thought about it.

Bob
Why is being visual so important?

Kurt
You know there's the saying "a picture is worth a thousand words." But when executives are uncertain about a decision, they need to really see what's the problem. When you're trying to figure out what's desirable and you're going out into the marketplace, you should take pictures - a lot of pictures - and you want to combine theses pictures with verbatim quotes along with a picture of the person that you're interviewing. This suddenly humanizes the problem. It's easy to look at numbers. It's hard to look at actual visual depictions.

Kurt
In the movie "The Post," the characters talked about the pain and agony of the Vietnam War. Well, as we know, the government was measuring success in terms of body counts. That's a number. But if you translate the number into something visual and you show pain and suffering and the challenges people face, this visual depiction gives a radically different perspective on what was going on. And that's just one example of where you when you make it visual, people can relate to the emotional problem instead of the rational problem.

And most organizations act rationally, but it's the emotion that drives purchases. People buy passion. And there's margin in passion. For example, if people feel strongly about a sports team, they will spend an unimaginable amount of money because they want to be part of something bigger than themselves. And it's that passion causing them to spend. It may be irrational passion, but it's that emotional passion that really drives everything in entertainment and certainly other industries. As a leader or someone in search of an executive support, the most important to do is figure out how can you make people feel passionately about your idea. And that's why making it visual is so important. You need to stop relying on PowerPoint and start tangibly, visibly, and emotionally showing your idea. Only then will people become passionate. And when they become passionate, then they become inspired. Innovative ideas have enough people trying to kill them and you need to inspiration to get your idea to the next level.

(Full transcript coming soon)

Rath
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