5 Minutes To New Ideas With Phil McKinney

As a society, we have a problem.    Some years ago, the late Nobel Prize winner Dr. Albert Schweitzer was asked by a reporter, “Doctor, what’s wrong with people today?” The famous doctor was silent for a moment, then he said, “People simply don’t think!”   Why do some not use our brains and think? The brain is a fabulous mechanism. It is capable of processing eight hundred inputs per second for seventy-five years without exhausting itself.   Scientists tell us that humans use approximately 2 percent of the brainpower available to us. We are all equal. We all have the same 2%.    As a society, some of us have chosen not to use this powerful tool. We let others do our thinking for us. Why? Conformity Rollo May, the distinguished psychiatrist, wrote a book called “Man’s Search From Himself,” and in the book, he says, “The opposite of courage in our society is not cowardice .. it is conformity.” And there you have the reason why some people choose not to think for themselves. Conformity.   [QUOTE] If everyone is thinking alike, then no one is thinking. [QUOTE]   They handed over their ability to succeed and fail by conforming to others. Conformity allows them to coast through life or so they believe. They wonder why they are not as successful as others.    Have you wondered why innovators are different? Innovators are anything but conformists - coasters. Innovators are driven to solve problems, to invent, to make life better for everyone.    Why do innovators seem to have the magic touch? Why are Elon Musk or Dean Kamin so successful? They didn’t start out as billionaires. They started out just like the rest of us.    Being a highly successful innovator is available to everyone. No constraint. No skill or ability beyond what you have available to you right now.  Overlooked Secret So what is the overlooked secret to being a successful innovator?   Having goals. Innovators with goals succeed because they know where they are going. They have a focus to apply their 2% of brainpower.    Think of driving a car. If every time you come to a red light you make a left turn, green light you go straight, and at stop signs, you turn right. Where would you end up after driving for an hour? Who knows. Your path is randomly chosen by the timing of lights and the appearance of stop signs.    If on the other hand, you have a destination and load the address into the GPS. You now have a plan to get there. While you may run into obstacles such as traffic or road closures, you can adjust your plan and still arrive at your destination.    Having a goal, like a destination, is the overlooked secret to success for innovators. Without it, your success is based on random chance.    So decide now. What is it you want? Plant your goal in your mind and commit to applying your brain’s 2% to achieving it.    Do you want to invent a solution to a specific problem? Do you want to be an entrepreneur and start a business around one of your innovations? Do you want to be a famous innovation coach?   To succeed, commit to that goal. Reflect on it every day, and it will become a reality.    It not only will -- there is no way it cannot become real.  Don’t Settle For Less We are where we are, because we were willing to settle for less. What is it you are settling for? Each of us lives off the fruit of our goals, because the goals set today, tomorrow, next month, and next year will move your life and determine your future. You are guided by your goals.    The moment you decide on your innovation goal, you are instantly stepping ahead of most everyone else, and you are in that rare group of people who know where you are going. You have set your destination.    Do not concern yourself on how you are going to achieve your goal. Leave that to your human ingenuity, and the power of the self-conscious. All you have to do is know where you are going. The answers as to what to do next will come to you at just the right time.    Setting a goal and having the tenacity to stick with it is hard. Conformity will look easy while sticking to your goal will have its struggles and frustrations.    As Frederick Crane said, “Individuality is the mark of genius. Mediocrity finds safety in conformity.”    You deserve what you are willing to settle for. Are you willing to be mediocre or are you out to change the world with your ideas?

On January 13, 2018, the people of Hawaii woke to a shocking alert on their phones and TVs. An incoming ballistic missile was on its way and that the warning was not a drill. It was 38 minutes later that the alert was retracted. During those 38 minutes -- panic set in. People were trying to figure out what to do. People drove their families to highway tunnels in hopes it would protect them. We can only imagine the fear that raced through the population of more than a million people.  How did this happen? Hawaii Emergency Alert System The alert was accidentally triggered by a state employee who was attempting to perform an internal test. As the Washington Post reported, the user interface for the emergency management system had a drop-down menu with two choices -- TEST MISSILE ALERT and MISSILE ALERT. The two options worded almost identically and with no confirmation required.  It is harder to erase a photograph from your phone that it was to scare the citizens and tourists in Hawaii. The designer did not consider the confusion of choosing the wrong menu option. There were no signals to the user about the action they were about to take.  What if the same lack of thought and consideration has been applied to airplanes, water treatment facilities, or nuclear power plants? It isn’t restricted to exotic or high-risk areas. You experience these signals every day.   Office Affordance Have you ever walked up to a door and instead of a door handle, you were presented with a flat panel area where the door handle would normally be? What do you do? You push and the door opens.  This signal of the properties of the door, in this case, to push, is called affordance. Affordance can also signal what not to do with the door. With no handle, you are not to pull on the door.  In our office, there is a conference room near my cube. On the glass doors are handles. I invariably grab the handles and pull. What happens? Nothing. To open the door you need to push. So after I pull, then I push. While I’ve been in this conference rooms hundreds of times, I pull each and every time. The visual queue, affordance, overrides my memory of the last time I tried to enter the conference room -- and I pull on the handle.  While we may chuckle at these design oversights, the use of affordance can give customers a clear signal of how-to, and how not to, experience a product or service.  Sony Walkman Affordance In 1980, I got my first Sony Walkman. This innovation had quickly become “the tech” everyone had to have. It allowed you to take your music with you. At the time, I was into DJing and making my version of mixtapes. The walkman allowed me to enjoy my music wherever I went -- to the annoyance of the then-girlfriend and now wife.  What I found intriguing with the Walkman was what it didn’t do -- as much as what it did do. Yes -- it was the first highly portable way to listen to recorded music. What it did not allow you to do was record music.  That’s right -- you could listen to music but you could not record it. Why? Up to that time, every cassette player allowed you to record.  Sony made the clever design decision to not have a feature to signal to customers what it was -- a portable music player. This decision had other benefits including reducing complexity and lower intimidation that technology can sometimes cause.  This design decision by Sony is another example of affordance. It signed what you can and cannot do with a Sony Walkman.  Affordance applies to all kinds of products and services. McDonald’s Affordance Have you ever wondered why McDonald’s does not offer cutlery? I can honestly say that I’ve never been tempted to use a fork and knife to eat a Quarterpounder.  In its early days, McDonald’s didn’t offer cutlery as an affordance signal to its customers in how they were to enjoy their meal -- with their hands.  For companies, paying attention to affordance can create highly differentiated customer experiences that create brand loyalty.  Apple Affordance Apple is one such company. By limiting options, radical simplicity, and clear signaling of what every action will be, Apple has created a cult following.  Ignoring affordance can lead to customer confusion and frustration which will open the doors to others to your market.  Ask yourself -- what affordance signals are you sending to your customers? Maybe it is the front door? Or a user interface in your mobile app or website? Or maybe a feature available or unavailable with your product? How do you find these affordances that you can fix or leverage? By testing with your customers. Remember, you are not a proxy for your customer. Affordance is in the eye of the customer.  Be more like Apple - and less like the Hawaii Emergency Alert system.   

It is normal that no two people are exactly alike. Not even twins. So the word normal should not be confused with the word average. If you leave your fingerprints on something, you might as well leave your name and address since no two people have the same prints.  You hear music and see a sunrise differently from any other person. You might enjoy a movie that your spouse would do anything to avoid. You might like being in a crowd of friends while your spouse prefers an evening being just the two of you.  When you say, “I want my child to be normal,” you don’t mean average, and you shouldn’t. What you mean is that you want your child to grow up with their own abilities, talents, likes, and dislikes. So to be normal is not to be average; it is to be different. But for some reason, we are not comfortable showing our differences because we think society is expecting something we are not. We present one face to the world, as a rule, and another one to ourselves. There are millions of people who feel inadequate just because they’re not like what they think they see around themselves. They’re not inadequate at all. It’s just that they've never understood that we’re not supposed to be like everyone else because no one is. We’re supposed to be ourselves and realize that we are distinct individuals. Face it, we are all quirky. Take a look at the great thought leaders: Socrates stood for hours in the snow, oblivious to the wind and cold, working out a philosophy problem; Churchill walked into the bedroom of the president of the United States with only a towel wrapped around his waist; Einstein could go a whole lifetime without giving a thought to whether or not he needed a haircut. Are these people normal or abnormal? They’re normal. That is the way they do things -- which is their normal.  I’m sure there are lots of people who are keeping themselves from something they’d like to be doing because none of their friends are doing it. The truth of the matter is that they would be normal to follow their own natural inclinations, since no two people are alike, and they are in fact being abnormal in copying their friends.  If you try to conform to the crowd, you’re trying to act as people act on the surface. It isn’t you. What’s normal for you, for me, is not easily discovered. It is not found by looking around at other people. It is found only by inward searching, by the knowledge of “who I am,” not by watching “others.” Each of us is outstanding in some way. Every person on earth has a superpower for something. When we find it, life takes on a new meaning and excitement. When you committed the effort to develop your superpower, a lot of other people will wish they were like you. But they shouldn’t. Being normal is being what you are as an individual. This applies to everyone including those that society labels as “not normal” such as those on the autism spectrum. Rather than someone on the autism spectrum trying to act like people who society thinks of as “being normal”, what is wrong with them being themselves and acting their normal? We as a society have defined normal based on some artificial standard we see around ourselves. Society has never understood that we’re not supposed to be like everyone else because no one is. We need to realize that each person is a distinct individual. So what are the steps to being content with being ourselves?  Everybody Knows: You can't be all things to all people. You can't do all things at once. You can't do all things equally well. You can't do all things better than everyone else. Your humanity is showing just like everyone else's. So: You have to find out who you are and be that. You have to decide what comes first, and do that. You have to discover your strengths, and use them. You have to learn not to compete with others, Because no one else is in the contest of “being you”. Then: You will have learned to accept your own uniqueness. You will have learned to set priorities and make decisions. You will have learned to live with your limitations. You will have learned to give yourself the respect that is due. And you'll be a vital part of society. Dare To Believe: That you are a wonderful, unique person. That you are a once-in-all-history event. That it's more than a right, it's your duty, to be who you are. That appearing normal is not a puzzle you need to solve. And you will be comfortable being your unique self and not someone else.   Each and one of us is a mystery and a miracle. What a shame it is to try to paint over the amazing you with a likeness of someone else.  To be normal is to be ourselves — and never to be average.   

My grandfather had an old saying when I was growing up, “Never burn a bridge." At the time, I thought it was a strange saying. It was only later that I realized what he was saying. No matter how someone treats you, don't get angry and never retaliate as to destroy the relationship. Great leaders keep cool even when the attacker is making it personal. Leaders Keep Cool Under Stress The president of a large corporation was confronted by an employee who stormed into his office and said, “I have a thing or two to say to you.” He then angrily poured out his complaints and pent-up feelings. As he did so, the president calmly listened. The employee was surprised that he didn’t get more of a reaction. When he was finished, the president said a simple “Thank you.”  The president had wisely remained cool like Solomon, the writer of Proverbs, who said: “A gentle tongue is a tree of life.” Emerson made the same point when he wrote, “Keep cool, and you command everybody.” The person who winds up in charge is the one who can remain calm and in control under the most intense pressure. There are strength and power in stillness and quietness. It is the most universally important quality of great leaders — they are unflappable. Leaders know that they don’t make the best decisions when made with emotions or in the heat of anger.  Leader's Most Valuable Lesson If a person can learn to remain calm in situations of stress, they have discovered one of a leader's most valuable lessons — one that the vast majority of people never learn. Earlier in my career, I was on a trip overseas, when I saw two drivers whose trucks came face-to-face in a narrow street. Neither would back up to let the other by. So what did they do? They started blowing their horns and yelling profanities at each other. After a few minutes of watching this spectacle, I went on to my meeting. When I returned a few hours later, they were in the same place, still blocking each other, red in the face yelling at each other. I wonder if they are still there. They were the perfect representations of what happens when anger and emotion overcome reason — nothing constructive happens. Logic says that when they had first seen each other, one of them should have immediately backed up and both could have been on their way.  Losing Your Cool While it is easy to point out the flaws in others, we need to recognize when we have fallen short. My mom, a fellow redhead, said I got a double helping of the “red-headed temper.” To emphasize the point, she used to tell me a story …  There once was a little boy who had a bad temper. His mother gave him a bag of nails and told him that every time he lost his temper, he must hammer a nail into the back of the fence. The first day the boy had driven 37 nails into the fence. Over the next few weeks, as he learned to control his anger, the number of nails hammered each day gradually dwindled down. He discovered it was easier to hold his temper than to drive those nails into the fence. Controlling His Temper...  Finally, the day came when the boy didn’t lose his temper at all. She then instructed him to pull out one nail for each day he was now able to hold his anger. The days passed, and the young boy was able to tell his mother that all the nails were gone. The mother took his son by the hand and led him to the fence. She said, “You have done well, but look at the holes in the fence. The fence will never be the same. When you say things in anger, they leave a scar just like the holes in the fence. It won’t matter how many times you say your sorry. The holes are still there.”  The little boy then understood how powerful his words were. He looked up at his mother and said, “I hope you can forgive me mother, for the holes I put in you.” “Of course I can,” said the mother. Don't Get Angry Every day, I strive to follow my grandfathers' warning to stay calm, don’t get angry, and never burn a bridge no matter how someone acts, says, or treats me.  “Keep cool, and you command everyone.” Emerson was right. Even a youngster, who keeps his composure in the face of raving parents, makes them look ridiculous.

The world is made up of ‘yes’ people and ‘no’ people. We need more optimistic -- more hopeful people who find a way to say yes to non-obvious ideas. During Thomas Jefferson's presidency in the early 1800’s, he and a group of travelers were crossing a river that had overflowed its banks. Each man crossed on horseback fighting for his life. A lone traveler watched the group traverse the treacherous river and then asked President Jefferson to take him across. The president agreed without hesitation, the man climbed on, and the two made it safely to the other side of the river where somebody asked him: "Why did you select the President to ask this favor?" The man was shocked, admitting he had no idea it was the President of the United States who had carried him safely across. "All I know," he said, "is that on some of your faces was written the answer 'No' and on some of them was the answer ‘Yes.’ His was a ‘Yes’ face." There are times to say no, of course. But success belongs to the people who say, thoughtfully and hopefully, “Yes - let’s try it.” These individuals have thrown their hat in the rings and are part of the answer rather than part of the problem. When we say ‘no’ to a non-obvious concept that might become a great idea, we shield ourselves of responsibility should the idea fail. We give the impression that we have superior knowledge compared to everyone else as to the outcome. In reality, our objective with our ‘no’ is to reduce risk by maintaining order and the status quo. However, the unintended consequence of our ‘no’ is the impeding of what might have been a great idea.  Why is it that 95% of the people in a typical organization believes it is their responsibility to say no?  They are playing the role of the anti-risk innovation antibody. There is no risk by saying no. Projects that are rejected with a ‘no’ can't fail since they never got a chance.  If later the idea turned out to be a breakthrough innovation executed by some other organization, nobody will remember who said no. Why are we afraid of being wrong about a new idea?  Most ‘no’ people seem to live under a suffocating dread that they might be wrong or make a mistake. Perhaps their parents punished them for every little mistake. ‘Yes,’ people use their best judgment but realize that failure and mistakes are part of living and growing and are always a possibility when something new is tried. I recall one high profile project that was not successful. Someone on the original evaluation team came up to me and said, “I knew that wasn’t going to work.” My reply was “No you didn’t know it wasn’t going to work. You just hoped it wouldn’t” As innovators, we should be the ones that most often say “yes - let's try it and see if the idea works”.  When we say ‘yes’ to someone else’s idea, we are committing to them that we are willing to invest all of ourselves to their idea. That is a powerful message to send to someone who is taking the risk and putting their idea out in the open for support or for rejection.  Google’s Executive Chairman, Eric Schmidt shared how important it is to say yes more often which included the following mantra:  “Find a way to say yes to things. Say yes to invitations to a new country. Say yes to meeting new friends. Say yes to learning a new language, picking up a new sport. Yes is how you get your first job, and your next job. Yes is how you find your spouse and even your kids. Even if it’s a bit edgy, a bit out of your comfort zone, saying yes means you will do something new, meet someone new and make a difference in your life, and likely in others’ lives as well… Yes is a tiny word that can do big things. Say it often.” During an innovation project, you will say yes or no 100's of times. However, without that first yes, we have nothing. That idea is dead on the spot.  So take a risk, be willing to be wrong, and say ‘yes’ to a new idea. If the idea is not working out, then stop it and say ‘yes’ to the next idea.  There are times to say no, of course. But success belongs to the people who say “Yes - let’s try it.” Those organizations who say ‘yes’ more often than ‘no’ are more willing to throw their hat in the ring and be part of the answer. Ask yourself --- are you a ‘yes’ or a ‘no’ person in your organization?    I’m Phil McKinney and thank for listening.

When I was growing up, one time my grandmother baked a fantastic German Chocolate cake. I can see it now -- that moist chocolate cake and rich icing. It was great and everyone in the family let her know how great it was. We devoured the cake. But from that time on, we could count on a German Chocolate cake as THE dessert every time we would visit. It became a little boring. Needless to say, I never told her that.  Everyone wants and needs change. But on the other hand, we enjoy doing what we do well that has reinforced by others expressing their appreciation. We all have experienced applauding a small child's, or in my case grandchildren’s, performance -- perhaps a somersault or a dance -- only to have the child repeat it over and over again until we could jump up and run out of the room screaming. We as adults are no different. We tend to limit ourselves to the things we learn to do well. It’s easier for one thing, and it beats the risk of trying something new. When it comes to innovation, this plays out in spades. When a new innovation team achieves some level of success -- such as the creation of a new product or service -- they jump to the assumption that it was the process that enabled them to achieve success. Or maybe it was the way that one brainstorm session was run and therefore all future brainstorming should be done the exact same way. Or maybe it was the evaluation and idea selection process that was key for its success so all future idea evaluations should be done in the exact same way.  Just as the enthusiastic applause for a child puts the child on auto-repeat, success to an innovation team does the same. We create a habit of repeating the exact same steps in what we believe is the perfect innovation process. When that happens, its the first indication that an innovation team is on the glide path to mediocrity.  It was NOT the process that enabled success. It was the idea. And building rigid repetitive processes are NOT conducive to creating a stimulating environment for generating new and exciting ideas.  It’s easy to fall into uninteresting grooves of habit. And the only way to avoid it, to keep change and creativity in our lives, is to do it deliberately. To achieve sustained innovation success, it is a good idea to break up the patterns from time to time. It will stimulate you and the team resulting in a new, fresh outlook on things. Remember -- no habit has any real hold on you other than the hold you have on it.  Habits and routines have a way of sneaking up on us. It starts off with us finding a way of doing things that become easily repeatable -- comfortable. Soon it becomes the way “we innovate”. Samuel Johnson, in 1784, put habit in its right context, “The chains of habit are too weak to be noticed until they are too strong to be broken.” Be on guard to avoid the habit trap. Innovation is about being disruptive. So disrupt how you do everything -- including how you innovate. If you can apply innovation to products, services, sales, marketing, HR, finance -- why not innovate the way you innovate?  Turn the habit mirror on yourself. We are quick to criticize the expense report process as being too rigid and in need of innovation. Could others say the same about your innovation frameworks and processes?  Does this mean you change your innovation frameworks and processes after each project? No. What it does mean is to be deliberate in trying new things. Do not allow the feeling of the safe to hold you back from taking risks.  There are things you would like to leave as is. But German Chocolate cake -- or anything else -- gets old and boring fast.  We need a change in our lives. It’s a basic human need. If we don’t get it, the concrete starts to harden. We need to be willing to change ourselves first and through it, influence others that change is what is needed if we are to keep moving forward.   Most people who drive cars to work leave at the same time and follow the same route, after having the same thing for breakfast. Arriving on the job, they continue the routine.  So start tomorrow. Have something different for breakfast. Leave earlier and take a different route to work. You might see something that could spark a great idea and also see some interesting parts of the town or the countryside. We all can do things to get us out of our ruts .. and avoid the habit trap.   I’m Phil McKinney and thanks for listening

I find it interesting that we usually get from other people exactly what we expect of them. If we are looking for friendship, we will likely receive it. If our attitude is that of indifference, we will get indifference. And if we are looking for a fight, we will in all likelihood find ourselves in the middle of a fight. The longer I live, the more I realize the impact of attitude has on me.  When it comes to success, attitude is more important than what happened in the past, more than your education, more than money, more than circumstances, and more than what other people think or say or do. It is more important than giftedness or skill. Attitude will make or break an organization. The remarkable thing is we have a choice every day regarding the attitude we will embrace for that day. And once we make that choice, we need to recognize that our attitude not only impacts us but will also lift or drag down others that we will engage with every day.  Can attitude really have that much impact on our success? Yes. An article in a leading research publication describes how a researcher tested the importance of attitude.  Testing For Attitude A psychologist is seated at a desk. There is a knock on his office door. The psychologist says, “Come in.” A student enters. The psychologist says, “Sit down, please. I am going to read you a set of instructions. I am not permitted to say anything that is not in the instructions, nor can I answer any instructions about this experiment. OK?” The student is then given the test.  After the student has completed the test and left the office, there is another knock on the door. The psychologist says exactly the same words to a second student. The only difference is that this time he smiles as he says the words. He smiles in a friendly fashion. The only difference between the two episodes is the smile.  Will the smile affect the results of the experiment? Yes.  It not only can but does -- in the laboratory, in the classroom and everywhere else in life. All other things being equal, the student who receives his instructions with a friendly smile will do better on the test than he would without the smile. The smile indicates that all is well and that the experimenter expects the student to perform satisfactorily, without any trouble. The student will live up to the expectations. He will fulfill the prophecy.  Without a smile, the situation becomes more tense. The serious expression on the part of the experimenter carries a ceratin forboding, a lack of confidence in the student’s ability to perform in a satisfactory manner. The student will not perform as well under this circumstance.  Impact of Attitude These test, carefully conducted and measured, indicates the tremendous importance of attitude. Our attitude towards others tells them what we expect from them, and they will give us what we expect: they will fulfill the prophecy. We do this with ourselves, too. This is why those who say, “I’ll never be able to do that,” or, “With my luck, the whole thing will end in failure,” are unnecessarily handicapping themselves. Expecting to fail, they will increase their chances of failure.  The parent or spouse who keeps repeating to their family that they never do anything right, who continually criticizes and magnifies mistakes, is setting the stage for the family members failure in life. William James said that it is the attitude at the beginning of a difficult task that will, more than anything else, determine the outcome.  That is why the manager or coach of a baseball or football team is so important. The right kind of coach can make a great team using ordinary athletes. They will do what the coach expects of them.  Innovation Attitude This same impact from attitude applies to innovation. When an innovation leader projects an attitude of success, it sets the expectation that the team will be successful in delivering innovations that will lead to high impact products and services.  One way to set this expectation is to craft a BHAG - a bold harry audacious goal. The best BHAG I have ever heard was when President John F Kennedy shared that “Before the end of the decade, we will deliver a man to the moon and return him safely.” He had no idea how this could be done, but he was convinced that it could and should be done -- and projected an attitude of success.  It was a rallying cry that pulled people together to deliver on the expectation was set before them.  Seldom does an individual or a team exceed their own expectations.  What are your expectations? Aim high. Now have the attitude that goes with that expectation.    I’m Phil McKinney .. and thanks for listening.

There is an old saying that goes something like this, “Speaking with passion but without the facts is like making a beautiful dive into an empty pool.”   As John Adam’s famously said, “Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passions, they cannot alter the state of facts and evidence.” To convince or persuade others to support your idea, you have to base your idea on incontestable facts that are readily grasped and understood. When it comes to taking your idea and turning it into disruptive innovation, you need to get people to support and even fund your idea. The willingness of others to support your idea is based on your personal credibility. The easiest way to lose your credibility is to run fast and loose with the facts. I’ve seen many an innovator thinking they needed to make some bold claims and then proceeded to stretch the truth. Their idea was fundable on its own but they lost their credibility and support -- and thus their funding. If the facts are more of a hypothesis, then you should be upfront and say, “In my opinion ...” Ben Franklin was a great one for that. He said that one of the greatest lessons he ever learned in winning others to his ideas was to begin everything he said with the words, “I may be wrong about this, but it seems to me …. “ And the combination of humbleness of attitude, linked with overwhelming logic, quickly had people assuring him that he was absolutely right. To take the stand that you’re right before the hypothesis had had the time to be turned into facts will make sure others will oppose you and your idea. It’s also a sign of immaturity. Speaking with passion but without the facts is like making a beautiful dive into an empty pool, and it has brought many otherwise intelligent people into positions of embarrassment, even disaster. We’ve all been guilty of. I know I have -- still am, on occasion. And I’m always sorry afterward, especially if I’ve been proven wrong. “It seems to me …” are magic words. They soften and clear the way; they open others’ minds and initial opinions toward us and our ideas. And then, if we are proved wrong, we are not so far out on the limb that we can't get back with good grace. But more important than the escape route, it ensures we are not offending others, and it helps brings them around to our way of thinking. When I was writing my book, Beyond The Obvious, I took the advice of others and had the entire manuscript reviewed by one of the leading fact-checkers from a major New York newspaper. I wanted to avoid the post-publication embarrassment of having someone point out some factual error -- or worse, find out I had unintentionally revealed some confidential information of HP or one its clients. The fact-checker was told that every story and reference had to be supported by public information. If it could not be validated with publicly available facts, it was pulled from the manuscript. In hindsight, it was one of the best decisions I ever made. In one story, the fact-checker came back with a change. In a story about innovating under pressure, I used the story of the Apollo 13 disaster and how mission control came together and innovated a solution for the “air scrubber”. In the story, I told how they used items in the command and lunar module to construct a device to remove carbon monoxide. One item I listed was a sock. The fact checker pointed out that I must have based the story on the movie. She was correct but how did she know?  The actual item was a “piece of a towel” and that the sock reference was a mistake in the Apollo 13 film. The film got it wrong and the fact-checker caught it. I fixed the manuscript and have used fact-checkers ever since. The first step to translating your ideas into disruptive innovations is to convince others to see your ideas as you see them. If you present your ideas with humbleness of attitude, linked with overwhelming logic you will be way down the path of attracting the support you need. What part of the story you are telling about your idea is based on absolute truth? Whatever that is, stick with that. Everything else should be presented as the thoughts, dreams, and hypothesis it is. Remember the saying -- make sure your mind is in gear before you set your mouth or pen in motion. And even then, it’s a good idea to proceed with a certain amount of caution so that you don’t run over somebody. I’m Phil McKinney -- and thanks for listening.

As a result of some digital spring cleaning I was doing, I found and was listening to old shows from 2005 - the first year of my podcast. Honestly, given what I know now, I wish could have re-written and re-recorded them. The technology and tools now available to podcasters are far superior to what we had back in those early days. This got me to thinking about how wonderful innovation is and how easy is for us to overlook it. Fifty years ago, we lived in a way that would be considered a burden today. When we catch a glimpse of those days in old movies and TV shows, we laugh and shake our heads. We used to think the cars from back then were great, not to mention the clothes. This looking back reminds us that past routines, past way of doing things, are exactly that -- the past. There is a better way to do almost everything. We must remind ourselves that a thing which has never done before doesn’t mean it cannot be done at all. I can remember when I was a kid before central air conditioning was considered normal. During the hot humid summers in Chicago, the only way to cool the house was with a small window air conditioner in the kitchen.  This then dictated that everyone in the family slept on the tile floor in the kitchen in order to get some relief. Many a night, the five of us, my parents, my brother and my grandmother all crowded into the kitchen or in the doorway trying to catch some cool air so that we could some sleep. How would you like to go back to those days? While is great to be nostalgic about the past, I can’t imagine going without the innovations we have today. Change from innovation is inevitable. Today we take pride and comfort in our modern world, and seldom think twice about it, as I’m sure we seldom did in the old days. Hindesite is 20/20. Could we have predicted the radical changes that occurred over the last 50 years? Think about it. We put a man on the moon, invented the personal computer, launched the internet, introduced mobile phones,  not to mention the millions of apps and tools we now have access to. From personal experience, I give thanks to the innovations that led to central airconditioning becoming a scalable and accessible product for millions around the world. Given our ability to gain perspective of the past, could we predict the innovations that will impact our lives in twenty years? Even 10 years from now, we will look back to today and smile and shake our heads at how primitive we were in so many ways. Our cars of today will look primitive in 10 years, not to mention our clothes. In 10 years, what will you be doing? Where will you be living? What job will you have and what will be your income? Where will you vacation?   What are your plans for the next 10 years? What are your goals? In order for a goal to be effective, it must effect change.  What can you learn during the next 10 years that will change the future? The most effective way to cope with the change is to help create it. The only thing you can know for sure is that everything will change. Can you predict and anticipate some of this change and by doing so, be years ahead of others? If you don’t and others can, you will find yourself at a clear disadvantage by having change surprise you. My grandfather used to tell me a story of two neighbors, Bill and Ted. Bill always brought his dog that loved cats. Ted had a cat that hated dogs. Whenever Bill came to visit Ted, his dog would come along. The dog would chase the cat up the maple tree in Ted’s yard. This same scene would take place every time Bill came to visit. After a couple of years, Ted cut down the tree.  A couple of days later Bill and his dog came to visit. Out around the house ran the cat with the dog right on its tail. Suddenly, about thirty feet in the air, the cat realized that something had changed … Don’t be the cat. Today we smile when thinking about the past, and in the future, we will be smiling back as we think about today. Reminds me of a sign I saw at a roadside gas station: “If you continue as you have in the past, where will you be in five years from now?” Something to think about. I’m Phil McKinney … and thanks for listening.

I was looking through some of my old idea notebooks and came across a quote that I wrote down. It is one of those quotes that cause you to pause and contemplate. To question your own personal motivations. The quote? “Institutions, like vineyards, should be judged by the quality of their vintages.” Its worth think about, isn’t it? “Institutions, like vineyards, should be judged by the quality of their vintages.” An institutions impact should be measured over time just as it takes years if not decades to truly know what the quality of the vintages of a vineyard. You can apply this quote to businesses, schools, universities, charities, a church, a family or a country. I, for one, would rather be connected to an organization that puts out a really great product than an organization that is turning out ordinary products or services. The ability to produce a great product or service is tied the inherent drive to quality from the team that builds it. There is nothing more important than to instill in our ourselves, our children and grandchildren than a love for quality sake. We instinctively look for it in others and admire it when we find it. We want it from the people who deliver the products and services we use. We want it in the education of our children, in the medical care we receive, in the food we eat, in the car we drive, in the clothes we wear, in the books and newspapers we read and in the podcasts we listen to. Quality puts the value into everything. And because we admire it so much, we should most certainly demand it of ourselves in everything we do, because it is what gives us the value that others want from us, too. But we must not stop at ourselves but help those around us to recognize the importance of quality. The result would be a rising up of quality to the benefit of everyone. This reminds me of a story ….. I grew up in Illinois where we are famous for our “Super Sweet” corn - so we know a thing a two about corn. There once was a farmer who grew award-winning corn. Each year he entered his corn in the state fair where it won a blue ribbon. One year a newspaper reporter interviewed him and learned something interesting about how he grew it. The reporter discovered that the farmer shared his seed corn with his neighbors. "How can you afford to share your best seed corn with your neighbors when they are entering corn in competition with yours each year?" the reporter asked. "Why sir," said the farmer, "didn't you know? The wind picks up pollen from the ripening corn and swirls it from field to field. If my neighbors grow inferior corn, cross-pollination will steadily degrade the quality of my corn. If I am to grow good corn, I must help my neighbors grow good corn." He is very much aware of the connectedness of life. His corn cannot improve unless his neighbor's corn also improves. The lesson for each of us is this: if we are to grow good corn, we must help our neighbors grow good corn. So it is with our lives. If we are to improve our quality, we need others around us to improve theirs. And quality is not limited to just a few high profile jobs. There are no unimportant jobs. There isn’t a job of any sort where the quality will not reflect on the person performing the task. Quality is not something you can fake. Time exposes the lack of quality like the geological strata of a canyon. Someone who does not deliver quality to the level expected will be found out. People instinctively know and respect quality when they find it -- or turn away when they are disappointed when they don’t find the quality they expected. So - are you delivering quality in everything we do? Are you helping those around us deliver quality? Or -- are you trying to get by with delivering just the minimum required? Joel Weldon says it best. “What you value is what you think and talk about. And what you think and talk about is what you become.” Thus why I’m talking about quality. You and I need to hold ourselves and each other to the expectation that high quality is what we will deliver in everything we do. Before you say something is done, you need to ask yourself, “Is this up to my standards of quality?” And because the quality is more of a journey than a destination, you should never stop asking ourselves, “How can I improve on the quality of what I do?” This is Phil McKinney and thanks for listening.

Some have put forth what I believe is a false premise -- that creativity and innovation are for the young. Silicon Valley has clearly bought into this premise. If you are over 40, some could rightly argue 35, many of the companies in the valley have taken the position that you are over the hill.   The average age of an employee at leading Silicon Valley companies like Facebook is 28 while Google is 30. My former employer, HP looks like a retirement home with the average age of its employees being 39.   Some of the companies in the valley truly believe that because someone is older, they are less able to be creative -- to be innovative.   Hogwash.   Creativity and innovation know no limits based on age.   A while back, Fortune did a cover story on Warren Buffet. In the process of building his company, Berkshire Hathaway, he has acquired companies of all sizes and industries. Probably one of his more unusual acquisitions would be Nebraska Furniture Mart.   Nebraska Furniture Mart was founded in 1937 by Rose Blumkin, universally known as "Mrs. B.” In 1983, at age 89, Mrs. B sold 80% of Nebraska Furniture Mart to Warren Buffett in a one-page handshake deal. Buffett bought the company without auditing her inventory or books, instead basing the deal on his own shopping experience at the Mart and his respect for the Blumkin family. Mrs. B sold the business due to her belief that if she sold before her death, her children wouldn't fight over the company. She continued to work at the store, putting in her normal 70 hour work week, using an electric scooter to get around. Soon after the sale, Buffett would say, “Put her up against the top graduates of the top business schools or chief executives of the Fortune 500 and, assuming an even start with the same resources, she’d run rings around them.”   Buffet said in his annual report not long after the acquisition that Mrs. B is clearly gathering speed and “may well reach her full potential in another five to ten years. Therefore, I’ve persuaded the Board to scarp our mandatory retirement-at-100 policy. And it is about time,” he adds “With every passing year, this policy has seemed sillier to me.”   Perhaps this was in jest, but Buffet simply does not regard age as having any bearing on how able a person is. Maybe because he has worked over the years with an unusually large number of older executives and treasured their abilities. Buffet said, “Good leaders are so scarce I can’t afford the luxury of letting them go just because they’ve added a year to their age.”   The same applies to when someone starts down the innovation path. You can pick up the creativity mantel at any age.   Van Gogh was late in becoming an artist. He began at the age of 27, well past when other leading artists started learning their craft.  His drive to catch-up for his late start resulted in an enormous output - 840 paintings and 850 drawings and watercolors - were completed during the last 10 years of his life. He painted furiously until the end, doing 70 paintings and more than 30 drawings in the last 70 days of his life.   Someone judging a persons ability to be successful creatively based on age is nothing more than ageism which is a form of bias.   Bias is when a person or organization unfairly show favoritism towards something or someone such as the bias to hire younger staff because a leader believes they are more creative -- more innovative. Bias is one of those things that can crop up without us even be conscious of it.   Reminds me of the story of young American at a banquet who found himself seated next to a Chinese diplomat. Not knowing what to say to a Chinese person, the young man pointed to the first course and asked, “Likee soupee?” The diplomat nodded and smiled.   Later, the Chinese diplomat, Wellington Koo, was called on to speak and delivered an eloquent address in flawless English. As he sat down to the sound of applause, he turned to the young American and said, “Likee speecchee?”   Ask yourself …   If you are a leader, do you or your organization hold a subconscious bias about who can or cannot be creative in your organization? If so, be the change your organization needs.   If you in the “over hill” gang, what is it you would like to do creatively to prove to yourself and others that creativity does not have an expiration date? Then do it.   I’m Phil McKinney … and thanks for listening.

I’m not sure who said it first but I’ll give credit to Tony Robbins for the now famous quote -- “You are the average of the five people you spend the most time with” With a slight tweak, you can apply this quote to networks, communities, tribes, and friends you socialize with. If you changed that quote to be … “You are the average of the five social networks where you spend the most time” What would that say about you? Remember that it’s the average. Based on the networks and their communities you chose to be a part of - you become that community. You sound like it. You think like it. What’s worse is that some of these social networks experiment with behavioral manipulation to further influence your “average”. Outside of the online world, we self select our membership into networks such as a church, the company we work for, charities we volunteer at and the friends we spend time with. These all say something about ourselves when we look at them as a quilt of the people that have the biggest influences on us. Who are the five you spend the most time with? What does that say about you?   My Priorities Over the years, I’ve added and trimmed who are my friends and the networks I’m engaged in. Some consciously and some by neglect because of changing priorities. Over the last few months, I took particular stock of networks and groups I’m in and many cases, setup. For example, the Killer Innovations Group over on LinkedIn and Facebook. To be honest, I had become part of the problem and it challenged me to become part of the solution. I asked myself -- was I the person someone wanted to include in their network? Someone who could help raise their “average” rather than dragging it down? Communities take many different forms. Facebook can be viewed as broad and horizontal. It includes friends, families, co-workers, and acquaintances covering a wide range of topics, interests, and opinions. You join because you know each other. A more narrow community would be LinkedIn. You join to connect with co-workers, peers, and influencers in your area of interests. The objective is to build your network on LinkedIn with those who could help advance your career. Groups on these platforms are created to bring together people into more vertical areas such as fans of a specific TV show or maybe a podcast on a particular topic. However, the selection criteria are platform first then topic. This means you are joining a fractured community. If this is a community that you are prioritizing to be one of the magic five that you want to be influenced by and thereby raise your average - you are getting shortchanged.   Next Generation Communities The role of communities has changed. They used to be built around a person, a movie, or maybe a book. The communication style was one-to-many and the return was many-to-one. Not what I would call a community. More like an online fan club. The next generation community is not about a person, a place, a show or a book. It’s about the community and its members. These communities are built on sharing and communicating many-to-many. The result is a healthy community that becomes more self-sufficient while its engagement grows. If you want to influence and be influenced by a community, you want one that is:   Not fractured across platforms Communication and sharing that is many-to-many Vertical in an area of high importance to you   Communities can take many forms from large communities to ones that are ultra-small such as a Mastermind. A mastermind group uses a peer-to-peer mentoring concept to help a small group of around a dozen members share and learn from members experiences. Some masterminds are broader such as all members are CEO’s of small companies while others are more vertical covering such topics as innovation, creativity, and leadership.   Innovation Teamwork As I’ve discussed many times in the past, innovation is a team sport and it requires a community to come together to take a raw idea and turn it into a crazy successful innovation. You can’t do it alone. Teams around innovation can take many forms. It could be a team you are assigned to by the organization you work for. You can invite others to join you in becoming an ad-hoc team around an idea. Or your team could be a combination of these approaches. Whichever approach used, getting people with as varied a background, expertise, thinking styles and diversity as possible is the key to innovation success. I cannot underestimate how important this is.   Community of Innovators   So, if you are not part of a community, you should be. What are you waiting for? An invitation? Well here is your invitation. The one community I hang out in every day is TheInnovators.Community. Yes -- it is one of the 5 that I would hope will influence me. It’s free. It’s not built around one person. The community members include some of the top innovation practitioners in the world. Back to an earlier question I posed, who are the five communities and individuals you spend the most time with? What does that say about you? I’m Phil McKinney - and thanks for listening.

As it says in Psalm 90:10, we are allotted threescore and ten years to do with as we please. Of that, we will spend the equivalent of twenty-three years and four months of it asleep. We will work nineteen years eight months practicing our religion and ten years and two months in recreation. We will spend six years and ten months -- eating and drinking. Six years will be spent traveling. Four years are spent in illness. Time is one of those resources that we never seem to have enough of. It is a perishable resource.  You can’t put it on the shelf for use later. We are given 1440 minutes every day and once it is gone it is gone. While many will just go through their day as they always have, others have found ways to prioritize what is important when it come to time. Travel Time There is a story of a life insurance agency in which the underwriters came to work at 7:00 AM. They leave for home a few minutes before 4:00 PM. By doing that, they reduce their daily travel time from two hours to just 40 minutes. They miss the rush hour traffic. The result is a net profit of well over six hours per week, or 25 hours a month. The yearly savings over a period of 50 weeks is 300 hours. That is the equivalent of more than seven 40-hour weeks. Not a bad way to add seven weeks to the year. An additional benefit, or dividend, is that the hours from seven to nine o’clock in the morning are typically quiet and they can get twice as much work done. So is the work from home person out of luck in finding a way to save time? No. George Bernard would regularly share a valuable lesson about time management. When asked why he wore a beard, he said that at first, it was for vanity, but later, he said, it was common sense. The commonsense reason was that he had written several plays in the time saved by not shaving. For most of us men, shaving takes about an hour a week, or 50 hours a year. That’s a week's worth of work. Unorthodox Time Savings For some reason, people seem curious as to why I wear the same thing every day. Black golf shirt, blue jeans and the same style of cowboy boots I’ve worn for years. Why? As I’ve shared before, early mornings are very precious for me as that is my time to write -- to be creative -- without distraction. My monochromatic style is born out of my desire to reduce or eliminate cognitive load. The thought of getting up in the morning and needing to make yet one more decision such as what color shirt or pants to wear is too much. Switching decision context from thinking about what I’m working on creatively to what color shoes match what I’m wearing disrupts my subconscious mini-brainstorms. By wearing the exact same thing every day, I can keep my subconscious working creatively all the way to work and gain an extra hour of ideas not to mention not losing time standing in my closet wondering what to wear. The added benefit? I can pack for a trip in half the time it used to take me.   Time For Innovation When it comes to translating ideas to innovations, time limiting the early efforts on an idea forces everyone to make sure that the idea is worth this highly valuable resource. If the idea is worth it great, put more time behind it. If not, then stop and reallocate the resources to the next best idea. This is what is called managing your opportunity cost. Opportunity Cost How should you think about opportunity costs? David Henderson of the Hoover Institue describes it as looking at the value of the next-highest-valued alternative use of that resource. If, for example, you spend time and money going to a movie, you cannot spend that time reading a book, and you cannot spend the money on something else. If your next-best alternative to seeing the movie is reading the book, then the opportunity cost of seeing the movie is the money spent plus the pleasure you forgo by not reading the book.   So, if you mismanage the time your team works on innovation, whatever they are not able to work on is your opportunity cost. Is It Worth It? You need to step back and ask yourself the hard question. Is what we are working on right now worth the opportunity cost of not working on something else?   What ways could you help your teams save time from things of low value so they have more time to work on activities of higher value? Maybe one or two fewer meetings a week?   How will you prioritize your 1440 minutes today?  

Your idea was rejected. Criticized. Dumped on. You were told to give up. I have yet to find anyone who likes to have their ideas rejected. But if you want to succeed in innovation, you have to put yourself and your ideas out there which means you will get rejected. You have no other choice. The alternative is to avoid rejection and criticism which translates into 100% chance that your idea will never become a reality. To set the proper expectation, your ideas will be rejected far more times than they will be accepted. In Silicon Valley, there are entrepreneurs who talked to 100’s of VC’s pitching their ideas before they got one to fund it. In my experience, the first indication that you may be on to something great is when everyone is calling you and your idea crazy. If Elon Musk and Dean Kamen have people criticizing their ideas and calling them crazy, how can you expect anything less about your ideas? Why does rejection hurt so much? As humans, we like to be liked and when the rejection is about something personal such as our creativity and ideas, it hurts. We take it personally since the idea is the output of our personal hard work and imagination. Our ideas are pieces of ourselves. Renoir’s Perseverance The great painter Renoir was laughed at and rejected not only by the public but also by his fellow artists. Today, we look at a painting by Renoir and marvel that anything so fine and beautiful could ever have been an object of scorn. When he brought one of his canvases to one of the most prominent Parisian teachers, the expert glanced at the work as said, “You are, I presume, dabbling in the paint to amuse yourself.” Renoir replied, “Of course. When it ceases to amuse me, I will stop painting.” Everything he painted amused and delighted him, and he painted everything. Even Manet said to Monet, “Renoir has no talent at all. You, who is his friend, should tell him kindly to give up painting.” A group of artists who were rejected by the establishment formed their own association in self-defense. Do you know who they were? In the group were Degas, Pissarro, Monet, Cezanne, and Renoir -- five of the greatest artists at all time, all doing what they believed in, in the face of total rejection. Have Faith Throughout the cycles of criticism, you have to have faith and trust that the steps you are taking will lead to achieving your vision for your idea. Steve Jobs describes this faith as, “You can't connect the dots looking forward; you can only connect them looking backward. So you have to trust that the dots will somehow connect in your future.” Trust your dream, your vision and make progress every day towards achieving your goal. Trust that the dots will connect. For The Pleasure of It Since we’re on the subject of Renoir, in his later life he suffered terribly from rheumatism, especially in his hands. He lived in constant pain. When one of Renoir’s friends visited the aging painter, he saw that every stroke was causing renewed pain. He asked, “Why do you still have to work? Why continue to torture yourself?” Renoir answered, “The pain passes, but the pleasure of creation, remains.” One day, when he was 78 and quite famous and successful, he said, “I am still making progress.” He died the next day. This is the mark of the innovator -- still making progress, still learning, still innovating as long as he lives, despite pain or criticism. He’s not innovating for the approval of others. He is innovating because he must -- because it gives him pleasure and satisfaction. If Renoir was driven purely by the acceptance of others, he most likely would have hung up his paintbrushes given the constant barrage of criticism he received from the so-called experts and even his friends. The world would have lost the opportunity to admire his great works. When Do You Stop? The innovators who I coach and mentor who are struggling with rejection often ask me when they should give up.  At what point should they accept the rejection and stop trying? My answer is -- never! As long as you have a dream, something you truly believe in and wish to achieve, then keep going. By not giving up and turning your idea into a game-changing innovation that becomes a market success, you will silence your critics -- for a brief moment. There are many examples, including JK Rowling, who continue to receive rejections after they achieved success. Rejection and criticism never go away. Killer Question Search for that Renoir inside of you and ask yourself; What are you willing to innovate even in the face of criticism and rejection? What area have you been wanting to innovate but were too afraid to start? Don’t be afraid of possible rejection and criticism. Get used to it. It is part of the life as an innovator. I’m Phil McKinney and thanks for listening.

Want to know the secret to take ideas and make them real innovations? It is what I call the “daffodil principle” which I learned/stole from an article published by Jaroldeen Edwards. In one of the small mountain communities in the Sierra foothills, there is a church. If you take the time to pull off the road and walk around the side of the church, you will see a hand-lettered sign pointing to the "Daffodil Garden." A quick walk down the path and you will see the most unbelievable sight. It looked as though someone had taken a basket of daffodil bulbs and tossed them across the mountainside. The flowers were planted in patterns of orange, white, lemon, pink, and saffron. Each different-colored variety was planted as a group across the five acres of flowers in the garden. I can imagine your first question. Who took the time to create this 5-acre garden? This was done by just one woman. On the patio of her house is a poster; "Answers to the Questions I Know You Are Asking". The first answer was, "50,000 bulbs,".The second answer was, "One at a time, by one woman. Two hands, two feet, and very little brain." The third answer was, "Began in 1958."   The Daffodil Principle There it is, The Daffodil Principle. For me, the moment I heard this story for the first time was life-changing. I thought of this woman, who, for decades, had planted one bulb at a time to bring her vision to an obscure mountain area. Think about that for a moment. Her planting one bulb at a time, year after year, had changed the world around her. She had created something of incredible beauty, and inspiration. The principle her daffodil garden taught is one of the greatest principles of success. That is, learning to move toward our goals and desires one step at a time -- often just one baby-step at a time -- and learning to:   Love the doing Learning to use the accumulation of time   When we multiply tiny pieces of time with small increments of daily effort, we can change the world. Why did this principal have such a significant impact on me? It is that reminder that if we do what needs to be done each day, no matter how small the step, we will make progress towards our goal. When it comes to taking ideas and turning them into innovations, the impact from accumulating effort, no matter how small, can be the difference between “try” and “success”. Getting Around The Procrastination I’m not saying that it is easy.  For me, it’s easier to procrastinate. I’m a world-class professional procrastinator. Just ask my wife. Yet, I’ve had to put in place some learned habits to ensure that what needs to get done - gets done. Yet each week, I know that the scripts for my radio show will not write themselves. So what do I do? I get up at 5 AM every morning, just as I’m doing at this very moment, and I spend about an hour on the scripts. In any given week, I put in 8 to 10 hours on each script for the one-hour radio show and then I record the show over the weekend. Then repeat it each week for 14 years. My radio show and podcasts are my examples of the “Daffodil Principal”. Starting in 2005, doing the small daily tasks that lead to each episode of the show. Fifty shows each year builds a season. We are now in our 15th season. In late 2009, the back catalog of the shows was discovered by my agent, Marc Gerald, who then helped translate that into a book deal. The book then opened the door to have the podcast become a nationally syndicated talk radio show on BizTalk Radio. All of this came about by getting up each morning and spending one-hour a day writing scripts and stories for my podcast and radio show. While I was successful in applying the Daffodil Principal to my show, there are many ideas that I failed to apply the principal to and as a result, didn’t see them become a reality. Applying the Daffodil Principal doesn’t require special skill. Just having a goal and then having the commitment and tenacity to do the daily tasks that need to be done, no matter how small the step is. What if? The hard question we should ask ourselves … What if I had taken one of my ideas decades ago and had worked away at it 'one bulb at a time' through all those years? Just think of what might have been achieved! So what is stopping you from creating your version of the “daffodil garden”? It is not too late. Start tomorrow. I’m Phil McKinney and thanks for listening.

Twelve words. Millions of 11-year-old boys, and now young girls, learn it when they join Boy Scouts. It was something that I had to memorize in order to earn my first step along the way to my Eagle Scout medal. Each weekly meeting started with everyone saying them aloud. We were expected to follow them at all times. When a person achieves Eagle, they stand in front of people attending their Court of Honor and recite them and committing to continuing to follow them. This could sound like indoctrination or maybe even a cult. Some organizations could take a lesson on how to establish and then reinforce a culture within their organization. A culture must reinforce its core values and the Boy Scouts did that at every opportunity which for me meant more than 500 times standing with my peers and adults and reciting these words from memory. So what are these twelve words?  The Scout Law. A Scout is Trustworthy, Loyal, Helpful, Friendly, Courteous, Kind, Obedient, Cheerful, Thrifty, Brave, Clean, and Reverent. Over the years I found myself returning to them again and again whenever I ran into those ethical dilemmas we all find ourselves in. Why? Through experience, when I stayed true to the law, things just went better in life and -- it was the right thing to do. Following a series of high profile ethical lapses that occurred at companies like Enron, a number of universities and colleges added ethics courses to their MBA curriculums. Why MBA courses? The theory being that their graduates would become the future corporate leaders and these courses would then create ethical corporations. Most recently engineering and science majors are following suit. The logical reaction of high profile cases like Theranose, the shocking increase in the number of scientific research work that has been retracted for fraudulent results and more recently the ethical lapses in the use of personal information at social media and search companies. Will these new courses suddenly transform ethics in business, science, and engineering? I’m afraid not. Waiting until someone is college age to start teaching them ethics puts way too much of a burden on the course instructors. If we want to ingrain the societal expectation of ethical behavior, the foundations of ethics are something that a person internalizes and commits to over many years. I don’t believe one or two courses is enough. Is the Scout Law just some random words aimed at creating a false ideal - or is is there some basis to why these specific 12 words? The law came from the Bushido code of the Japanese Samurai, laws of honor of the American Indians, the code of chivalry of European knights, and from the Zulu fighters that the founder of Boy Scouts, Lord Baden-Powell, had fought against. What does this talk of ethics have to do with innovation and creativity? With the possibility that artificial intelligence (AI) and other technologies being used unethically, we are being asked to confront the ethics of what we invent. Is an innovation ethical or unethical? It could be argued that any innovation could be created with the best of intentions but applied and used unethically. Chlorine is used in many industrial and household items that are beneficial yet in WWI it was used as a chemical weapon. Is chlorine ethical or unethical? It's not the innovation but how we use the innovation that defines its ethics. What standard should we use as a global society to define ethics? We sometimes just need to recommit and remind ourselves of what it means to be a positive ethical contributor to society, to be someone who others see as setting a standard rather than blindly following others. To be someone our kids and grandkids look up to. Why not the Scout Law or something close to it? I’m fully committed to the Scout Law given my years in Scouting. Like all previous Eagle Scouts, I recited the Scout Law during my Court of Honor as an 18-year-old and committed to following it. Here is a modified version of the Scout Law for all of us … I commit to being Trustworthy, Loyal, Helpful, Friendly, Courteous, Kind, Obedient, Cheerful, Thrifty, Brave, Clean, and Reverent. Am I perfect? No! If each of us held each other accountable in a loyal, helpful, friendly, courteous and kind way, society would be a better place. To understand what I mean by each word in the Scout Law, I will be including an expanded definition in my blog post for this episode. What standard of ethics have you defined for yourself and your team? Does your team know the ethics you expect from them? Do you hold everyone, yourself included, in your organization to that standard? As the saying goes, You get the team you deserve based on the worst actions you permit to happen. Let’s set the standard for ethics in innovation. I’m Phil McKinney and thanks for listening.

I really enjoy getting behind this microphone. It is my personal creative outlet that is separate from the day job. What was it that got me to start back in 2005? Like all things, I got inspired. My inspiration was when my mentor, Bob Davis, lent me my first self-help set of cassette tapes created by Earl Nightingale. If you are not familiar with Earl Nightingale, he produced a spoken word record, The Strangest Secret, which sold more than a million copies, making it the first spoken-word recording to achieve Gold Record status. As we say the rest was history. Those cassettes put me on a path of continuous learning in a format that made it easy to consume during my 1-hour commute in Chicago traffic. A few months later after listening to that first cassette, Earl launched a monthly series he called “Insight”. A monthly subscription was $70 which was a lot of money for someone starting their first job in 1982. I signed up immediately. On those monthly cassettes, Earl challenged his subscribers, to think, to reflect, to motivate and to be willing to change. The content was what I needed to hear. I’ve kept every single cassette and still have them in my office. Years later, I was having a discussion with Bob Davis about how could I pay him back for the time he invested in me that led to my career success. He laughed and said I couldn’t pay it back, I needed to pay it forward. Find others who I could invest in. A challenge I wasn’t quite sure how to deliver against. Then I got inspired. I thought back to Earl and how he impacted me and asked how I could do the same by sharing my experiences and lessons learned with others. When I looked around, there wasn’t an easy way to produce something like what Earl did with Insight without great expense. So - I put the idea on the back burner. Then I stumbled upon a small group experimenting with audio being distributed via RSS feeds over the internet. The lightbulb went off. I figured I could produce a recording and then distribute it using this new approach. So I jumped in. Launching The Podcast On March 5, 2005 - I produced the first episode of what we now call a podcast. I produced that first show using a crappy little microphone plugged into my laptop setting in the bathroom at a Marriott Resort in Arizona .. and I loved it. Bob and Earl’s inspiration in my life had come full circle. I had found a way to pay-it-forward. I’m nowhere near the impact of Earl Nightingale - but I’m trying my best -- and creatively it challenges me and keeps me learning. True inspiration goes deep. It changes us. It transforms us. What some people call inspiration isn’t. Some things we may think is an inspiration isn’t because of how brief of time we work at it. What some call inspiration may be the “new shiny object” that we try and then figure out its not something we are that interested in. For me, that’s photography. I have this long-standing love-hate relationship. I come back to photography repeatedly but then just as quickly lose interest. Ask my family. I have storage cards full of images that no one has ever seen. Earl Nightingale’s Inspiration So what inspired Earl Nightingale? When he was seventeen years old he joined the United States Marine Corps. Earl was on the USS Arizona during the attack on Pearl Harbor and was one of fifteen Marines aboard that survived. Following his close call in the war, Earl was inspired while reading Think and Grow Rich by Napoleon Hill when he realized that the six words he read were the answer to the question he had been looking for! What are those six words? , 'we become what we think about'. He realized that he had been reading the same truth over and over again, from the New Testament...to the works of Emerson. 'We become what we think about.' 'As ye sow, so shall ye reap...' Those six words became the foundation for his career success. Later he was challenged to share that insight with others and that is what led to his recording of The Strangest Secret. He went on to record more than 7,000 radio programs, 250 audio programs as well as television programs and videos. Earl passed away in 1989 however he is still inspiring others through his spoken word. What Inspires You Creatively? We all have a story about how someone or something has creatively inspired us? What is your creative inspiration? How are you translating your creative inspiration into having an impact?   Send me a note and share your creative inspiration story. I would love to hear it. I’m Phil McKinney -- and thanks for listening.

The inspiration for innovation takes all forms. For some its music. For others its art. And for others its data. When I was CTO, Mark Hurd, the CEO at HP at the time, had a quote that was ingrained into everything the executive team did. “If you stare at the numbers long enough, they will eventually confess.”  Mark Hurd  The expectation was that as an executive you knew “your numbers”. It was not unusual to have Mark stop me in the hall and ask about the R&D investment levels last quarter for the top three competitors, customer net promoter scores for our top 5 products or the reverse supply chain levels from retail returns. While Mark’s focus on the numbers was well-meaning, I always felt that it caused blind spots when it came to understanding the shift, changes, and unspoken needs and wants of our customers. It looked at numbers as single elements to be managed individually. It also had the built-in assumption that the numbers were fact and that they never misled. Years later, I came across this story that caused me to reflect back on these times at HP. Misleading Innovation Decisions During WWII, the Navy tried to determine where they needed to armor their aircraft to ensure they and their crew came back home. They started tracking each and every bullet hole from each plane in the navy. With this data, they ran an analysis to see if there were any trends of where planes had been shot up. Based on the analysis, the conclusion was that they needed to increase the armor on the wingtips, on the top of the central body, and around the elevators. That’s where the data told them their planes were getting shot up.Abraham Wald, a statistician, disagreed. He thought they should put more armor in the nose area, engines, and the underside of the fuselage. Everyone immediately thought his proposal was crazy. That’s not where the planes were getting shot.Except - Mr. Wald realized what the others didn’t. What the Navy thought it had done was analyze where aircraft were suffering the most damage. What they had actually done was analyze where aircraft could suffer the most damage and still make it back. What about the places where the planes in their analysis were not shot? Put simply, planes that had been shot there crashed. They weren’t looking at the whole sample set, they only looked at the planes, and crews that survived. Did The Data Lie or Just Mislead? The data didn’t lie. The planes did get shot in the locations identified during the analysis. The data, however, did mislead. It was only part of the entire data set that should have been looked at. While data can be incredibly helpful when developing ideas that will become future innovations, we need to apply human insight and skepticism. Throwing in your gut feel may also be a good idea. If something seems incredibly obvious, that begs the question as to why and what is missing.  Rarely are things that cut and dry. That obvious. Go beyond the obvious and use your curiosity to ask that next question so that you can dig deeper and uncover some insight that others are not seeing. Be careful of assumptions. Be careful of using past experience or even what we think we see and then filling in the missing data. Impact on HP So what happened with the Mark Hurd approach at HP? With the emphasis on your numbers being compared to your competitors, it became clear that if your numbers were not “better” than theirs’ then you weren’t running your part of the business appropriately. The result was some bad business decisions such as cutting HP’s R&D spend to match the R&D spend of our Asia Pacific based competitors. I always found it interesting that the focus was always on cutting. Why wasn’t the decision made to increase the R&D spend to match that of Apple? That is a story is for another time. While I pushed back hard on this approach and specifically what was being done to R&D spend, my one regret was not pushing back even harder or finding a way to convince Mark and others on the folly of the approach. I didn’t find a way to play the “Abraham Wald” role at HP. One key lesson that I did learn from this experience was that the context of the information you are using to make innovation decisions is just as important as the data. Killer Question How could you challenge yourself and your team to take the “Abraham Wald” approach with the aircraft analysis?  How can you go beyond the obvious and uncover an insight that is not obvious?

Great leaders - in business, government or society, know that when it comes to others, there is always more than meets the eye. Earl Nightingale once shared a story that reminds us to look beyond what we think is obvious. It seems that the NBC orchestra was about to be formed, David Sarnoff, chairman of the board of NBC, gave one directive: “Do not hire away any players from existing orchestras.” The people in charge managed to put together a superb orchestra -- all except for the first clarinetist. When the great maestro Toscanini was about to arrive from Italy to take over the orchestra, Sarnoff was asked how the problem should be handled. Should Toscanini be left to find about the first clarinetist himself? - or - should they be up front and tell him? Sarnoff said, “Let’s tell him.” His associates said, “You tell him.” Accordingly, a group went down to meet the boat as it arrived in New Your City. In his stateroom, Toscanini greeted Sarnoff and said, “That’s a fine orchestra you got together -- very fine, all except for the first clarinetist.” Sarnoff was taken aback and asked, “Maestro, how did you find out?” Toscanini then said, “I have been listening on a little short-wave radio I had in Milan, and I could tell.” Yes, he could hear the first clarinetist on a little radio in Milan. Toscanini then said, “Take me to the studios.” There the orchestra was rehearsing, and a special dressing room was waiting for him. He sent for the clarinetist, who arrived convinced that he was about to be fired. Toscanini said to him, “You are a good clarinet player, but there are certain things that you do wrong.” Then he began to work with him. The upshot was that the clarinetist stayed with the orchestra for 17 years and became one of the worlds best. As is human nature, we tend to judge people based on who they are today. We fail to take the time and see them as they could be. With the right encouragement, patience, mentoring and a lot of training, you could play a role in helping them become the person you are looking for.   I grew up in Chicago and during summers, I would take the Illinois Central Train to attend weekend seminars at the University of Chicago. During one of those seminars, the instructor quoted a story about Dr. Robert Hutchins, who was chancellor of the University of Chicago back in the 1940s and ’50s. It seems a group was having a discussion about adult education, and someone made the comment that you can’t teach old dog new tricks. To which Dr. Hutchins responded, “Human beings are not dogs, and education is not a bag of tricks.” When it comes to creativity and innovation, there are some who believe that all that is required is to search, find and then learn the “bag of tricks” of creativity to be successful. Or worse -- that everyone should already know the tricks and should be able to walk through the door and perform. This is far too much to expect of a person. A recent Adobe study points out that only 25% of the workforce feel they are skilled and are applying creativity and innovation as part of their job. We need to move beyond the idea that there is a “bag of tricks” and instead educate our people so that they can gain confidence in their ability to be creative - to be innovative. Why don’t you take on the role of teaching others how to be more creativity - more innovative? When you are the student, you learn something but you don’t completely “get it” until you try to teach it to others. When you try to teach something to someone else, you have to take that mess of information and organize it in a way that someone else can understand. In the process, you expand your own understanding and as a result, become better at creativity and innovation. As the lyric from the Phil Collins song, Son of Man, goes, “In learning you will teach and in teaching, you will learn”. In each of us is a deep reservoir of ability, even genius, that we consistently fail to take advantage of. It takes knowledge, practice and time to bring that ability to the surface. Investing in your teams' creative abilities will have a return that far exceeds any other investment you can make. As Dr. Edward de Bono says... There is no doubt that creativity is the most important human resource of all. Without creativity, there would be no progress, and we would be forever repeating the same patterns. So - who is the clarinetist in your orchestra that has the hidden ability to be world-class?

Any writer, syndicated cartoonist, innovator or perhaps a podcast host; sooner or later will run into what some would call writers' block. They find themselves drawing a blank. They have a deadline rapidly approaching and they find themselves with nothing -- not a single good idea.   Writers Block It has happened to me more times that I would care to admit. I have a show script that needs writing and I find myself looking at my laptop with nothing. I go for a walk. I read my emails. I check out my social media. Still nothing.   Then start the excuses to do something else. Anything else than setting there struggling. In some cases, I give up with the anticipation that I’ll try later in the hope that something will inspire me. In the rare case, I discipline myself to get back at it and keep working on it.   The best solution to the problem is to just write. Don’t hesitate - just do it. Set down and write something - anything -- and then keep going.   Do Not Wait For Inspiration I love it when “want to be,” creatives and innovators say that they need to wait until they get inspired -- wait until they can court their muse. Those who make a living on being creative on a deadline would starve or find themselves looking for other work. They do not have the luxury of waiting for inspiration.   I once gave a speech a number of years ago to a group of people who were interested in creating their own podcast. At that point, I had been doing my podcast for around 8 years. One piece of advice I gave them on how to create a strong following of listeners was to be consistent and diligent about putting out their shows. If they found themselves in the position where they had no ideas for a show, set down and publish a show anyway.   While I admit I said this, it has come back to haunt me. Over the 15 years of producing a weekly podcast, there have been many times where I wanted to just skip a week. It would have been easy to rationalize why there was no show this week. But we committed to you our listeners back in 2005 that we would be here for the long haul and we have been.   Establish The Right Work Habits The key to success in producing a podcast is the same as in any other field -- you need to establish the right work habits. And the best way to establish the right habits is to do something you know should be done -- every day. The more you do it, the easier it becomes -- the more confident you become -- and the result of your work gets better every day.   I have found that the more I do what needs to be done every day, the more ideas I get for future shows.   World-class Procrastinator Like most people, I am a world-class procrastinator. We all know that putting something off that we know needs to be done causes us to dread doing it. So once we start down this path, we keep pushing off what needs doing and the task grows larger and larger. Eventually, in desperation, we attack the task and get it done. Upon self-reflection, we admit that it wasn’t that hard and had we just done it, we could have avoided the stress.   Exercise Your Creative Muscle One of the right work habits for creativity and innovation is the daily exercise of your creative muscle (for example “9 Daily Exercises that I Do to Keep My Creative Muscle in Shape”). How? Brainstorm on a personal project. Create music. Take photographs. Do whatever challenges you creatively.  To count it as exercise - you need to do this daily. Not just taking photographs on your two-week vacation once a year.   As any athlete knows, regular exercise is key to achieving success. The same applies to your creative ability. At the same time, how many people do you know who signed up for a gym membership as part of a new year resolution, with all of the intention to use it, to find themselves a few months later not going to the gym? Just as most of us have put off any form of daily physical exercise, I’m willing to guess that you have been putting off exercising your creative muscle.   If you don’t mind taking advice from someone who’s been guilty of the same thing, just do it - now! Just start. Before you know it, you will have completed day 1 of exercising your creative muscle and you will feel proud of yourself.   If every day each of us would do the things we know we really should be doing to exercise our creative muscle, we would always be ahead of the game, instead of lagging forever behind and then having to run like mad to catch up.   So -- what creative exercise are you going to do today?   I’m Phil McKinney - and thanks for listening.

Did you know the opposite of bravery is not cowardice? The opposite of bravery is conformity. Doing everything the same way that everybody else does it, being like everybody else, thinking the same way everybody else does. Conformity is the “safe” approach which actually puts us at more risk. It takes bravery to step out and leave the warm space of conformity — and try something new. Let’s be honest, conformity is comfortable. You know what to expect. You conform to the norms of an office. You conform to the norm of society. It’s predictable.   The World Is Changing The problem is the world out there is changing whether we are ready for it or not. Conformity is not preparing us to compete and succeed. What constitutes success in the future is not the same thing that defined success in the past. When i started my career, success was defined as doing the tasks that our boss assigned to us and doing those well, then getting our performance review, then getting our two to three percent pay increase, and then wake up every morning and repeat. Then repeat it every day for the next 30 years of our career.   Creative Economy In the new emerging creative economy, the definition of success is different. The definition of success in the creative economy is your ability to create ideas that create significant value for the organizations that you are part of. And this creative economy is coming much faster than any of us predicted. The ability to succeed in this new economy is going to be based on learning how to take a natural ability that we all have and use creative thinking and ingenuity to solve problems and identify new opportunities. In a recent study by Adobe, only 25% of the population believe they are creative and applying it in their jobs to create value. Therefore, 75% of the world’s population do not see themselves as creative and are not ready to compete in the creative economy. What does this say about our economic future when only 25% of the workforce is ready?   The Next Generation Creatives It’s not all doom and gloom. I’m not that pessimistic. I think we have a bright and exciting future. Why? My grandkids. My grandkids are a perfect example of being highly creative. I’m amazed at how many different ways they can take a toilet paper roll and turn it into some creative toy. They have no limits to their imagination. Why?  Because they don’t care what you think about them. They are not looking for acceptance. They already have it. In their minds, when they do something incredibly cute and funny, they don’t see us as laughing at them. Instead, they see our joy in what they have created. They don’t understand yet the concept of conformity. They are exploring. They are experimenting. They aren’t letting others tell them, how to think, how to act, what to wear, or what should make them happy. They are avoiding the conformity trap. We all need to do whatever we can to protect ourselves and our kids and our grandkids from this trap. So why do 75% of the population think they are not able to contribute to the creative economy? They don’t see being creative, being innovative, as “being normal”. They believe creativity is a “special gift”. A gift they didn’t get. That is a lie. Everyone is born creative.  Everyone is born to innovate.   Risk of Failure Creativity and innovation require risk and the risk of failure is not comfortable. It takes a lot to step out and share our creativity  — to show off our ideas. As a society, we need your human ingenuity and creativity to solve some of our biggest problems and create opportunities for the future. It was creativity and human ingenuity that came up with the polio vaccine, put the man on the moon, that saved the Apollo 13 astronauts and brought them home safely. It was creativity that invented the microprocessor, which is what’s enabled the electronics that we all are carrying around in our pockets   The Secret to Career Success So what is the secret to career success in the creative economy?? 1) Don’t let conformity control you … 2) Take the risk and use your natural creative ability to solve problems and create opportunities. It sounds simple, doesn’t it? Find that creative courage and be brave and remember, bravery is not the opposite of cowardice; bravery is the opposite of conformity. Stepping out and taking risks is the perfect example of not conforming. So be brave and change the world.

I’ve been in the innovation game for more than 30 years. Hard to believe. With that many years comes loads of experience but also some downsides. As with most things, when you’ve done something for a long time, you tend to fall into a pattern - a rut. You use your experience to recognize a pattern and then immediately apply the answer that worked the last time. That works great in many situations but can create major blind spots when it comes to innovation. Stuck In A Rut How many of us have fallen into our respective ruts? Are you like me and tend to drive the same way to work every day? How about choosing restaurants?  I tend to have a fairly short list of regular places we go to. We all have ruts in both our personal and professional lives. What happens when the rut doesn’t work? You find yourself with a challenge and the answer eludes you. What do you do? You tend to go to your peers of experts to see if maybe they have a rut that leads to a different answer. Fresh Eyes What we need to do is to teach ourselves to see the world around us with fresh eyes. What are fresh eyes? Seeing with fresh eyes is to see something as if it were the first time. No biases. No pre-conceived right/wrong answers. No default expertise that can cloud our perspective on what we are seeing. For instance, we tend to travel the same path to and from work, school or the grocery store. How many of you can name the latest store that opened on that path? We all fall into our rut. We travel the same path every day and don’t notice what’s changed, what is new. We see with old eyes.  We skim our way through life. Old eyes will allow us to walk right past that next great idea or the solution to a problem we have been working on. Let me give you an example from one of my fellow TED speakers Innovating Potato Chips Let’s talk potato chips. A major manufacturer of potato chips was struggling with a problem. Their chips had too much oil on them at the end of the manufacturing process. Their experts felt they could leverage a solution to a similar problem they had with salt. With the “too much salt” problem, they added a step where the chips were shaken to remove the salt. So they applied the same solution to the oil. It didn’t work. So they shook the chips a little harder until the oil came off. But now the chips were broken. What to do? With their experts stumped, the manufacturer decided to crowdsource an idea from people outside their industry looking for fresh eyes. Low and behold a solution to the problem emerged from the most unlikely of people. The solution came from a concert violinist. The violinist looked at the problem and realized that it resembled something that they had seen. When a violin hits certain tones, water will bead up and dance. So - the violinist proposed playing a certain tone that would cause the oil on the potato chips to bead up and jump off the chips. And guess what, it worked! Here was a solution not found by the experts but from an unexpected source. The Innovation Lesson The lesson? Don’t assume that the ideas or the answer will always come from the experts. Sometimes we need to bring in fresh eyes. Honestly ask yourself, are you seeing with fresh eyes or are you suffering from old eyes?  Fooling ourselves into thinking we have this covered can be disastrous not only to you and your career but also for your team and the entire organization. Step 1: Be self-aware that we all see with old eyes Step 2: Build up the habit of looking at everything with fresh eyes Step 3: If we are stuck, ask for fresh eyes from the non-experts. You may just be surprised. Building Fresh Eyes My challenge to all of us, myself included, is to practice seeing with fresh eyes. How? Recognize when we are stuck in a rut and get out. Drive a different way to work -- and on this new route, maybe notice a new restaurant you want to try. Challenge a process you are using -- and try a different way to solve a problem. Ask for someone that is NOT an expert to come and give you feedback on your work with fresh eyes. Just think about it. What could happen if we open ourselves to seeing with fresh eyes? What could we create then?

I’m an innovation guy.    It may not say so on my business card, but that’s what I do.    I encourage people, whether inside HP or in my meetings with customers around the world, to accept that they and their product are going to have to change.    No matter how popular and successful your work is, things change.    The economy shifts; your customers’ needs evolve; technologies become redundant.    We’ve talked about this in earlier chapters, but looking forward, preparing for the inevitable evolutions in your business and your product are crucial if you’re going to succeed.       Amazon has been brilliant at refining What they do and How they do it to reflect the changing criteria of Who they’re doing it for.    This kind of flexibility is to be expected in the formative and pliable early years of a business or industry.    What’s impressive is that Amazon has retained that spirit even as they’ve solidified into the cornerstone of the digital marketplace.       The first phase of the Amazon era addressed readers’ criteria and hassles in the mid-’90s.    They made it easy to buy any book, no matter how niche or obscure, thereby undercutting Borders and Barnes & Noble to offer a cheaper product and saving you a trip to the mall in the process.    Mission accomplished.    This very simple What—cheaper books, huge selection, delivered to your door—worked.    Since then, they’ve diversified the products offered to the point where they are essentially an online department store.    They’ve experimented with everything from a search engine—A9 (built on the Google platform, but not a hit)—to allowing small booksellers a chance to list their books on the site.    Their Amazon Mechanical Turk service allows individuals to make money by offering their services in tiny increments of time.    Have five minutes free? Make a little money transcribing a two-minute podcast.       Whether any of these Whats are really a good idea is up for debate.    Amazon’s detractors argue that they are diluting their core message and product.    I’d counter that they are taking risks and exploring new uses for their existing infrastructure.    Much of Amazon’s explorations in creating new value are based around a tweak of this Killer Question, which goes something like “Is there unused space in my existing infrastructure that could be filled?”   Amazon has vastly more server capacity than they generally need in order to address requirements at peak times such as the Christmas holiday season or Black Friday.    As a result, they have taken their cue from companies like Rackspace and Media Temple and have begun renting their servers to provide infrastructure for third-party websites.    Their leap from selling books and other retail goods to getting into the computing infrastructure business has been unexpected.    But it has worked well.    Amazon S3 is very successful, and lots of start-ups use it.    As long as you have a credit card number, you can have servers and storage.    Amazon can easily allocate you more space on the servers as your business grows and needs more capacity.      The lesson here is to avoid being pigeonholed into one set of services.    Take a look at any underused resources you have available.    Is there a way that you could offer these to your customers as an auxiliary service to your main business?  Finding ways to offer underused resources as a service and see income where there would otherwise be none is brilliant.    These explorations might not yield big payoffs, but the point is that you need to be constantly looking at new ways to stay ahead of the trends that are shaping your industry.       [Sparking Points]  Are there year-round or seasonally based un- or underused assets or capabilities in your company (real estate, capacity, distribution, etc.)?  What customers, partners, or suppliers could benefit from having access to those assets?  What business model would you need in order to promote, sell, or support a set of products or services around these unused assets? 

On October 4, 1957, Russia launched a beach-ball-sized satellite named Sputnik, which orbited the Earth in just over ninety-six minutes. The previous frontrunner in the space race, the United States, was now the runner up. Our only competitor had trounced us, seemingly out of nowhere. A month later the Russians sent up Laika, a small stray terrier collected from the streets of Moscow, in Sputnik II. The dog became the first living creature sent into space, and an instant celebrity back on Earth.   The “Sputnik moment” ended up being a huge benefit for our long-term space goals. The US government was shocked and embarrassed that Soviet Russia managed to beat us into space. President Kennedy retaliated by greatly increasing funding for space travel. In 1958 NASA was founded, and the United States has led the way ever since. We all need Sputnik moments. Yes, they can be alarming, but they are also invigorating. A Sputnikmoment is the catalyst for change because seeing your enemy get ahead is the greatest motivator there is. It makes you see that you have to seriously improve your game if you want to win. A Sputnikmoment makes you realize that if you don’t change, you’re going to get left behind—and soon. Have you ever had a Sputnik moment?   Sparking Points   What future predictions can you make based on the innovation rate for your industry (e.g., Moore’s law in the computer industry)? What decisions would you make today if you knew that the rate of innovation would double? What “impossible” idea (product, service, solution) have you been ignoring because it can’t happen? What would need to be done to make it happen?

I’ve never shopped at the online craft marketplace Etsy.com or even any of its competitors.  Not an area of interest for me as I’m not often in the market for hand-knitted iPod cozies, customized guitar cables, or the like.  As for my wife and daughters – they are big fans and very loyal and passionate users.    And they are not alone. Since 2005 Etsy.com has signed up 2 million merchants and 35 million users.  Their annual sales figures in 2017 were $3.2 BILLION.    Even more interesting to me is not just the passion – but the level of passion that Etsy inspires.    Etsy provides a way for talented people who produce quirky goods to go global.    A young woman who customizes invitations out of vintage postcards would have struggled to find enough business before Etsy existed.    By partnering with the website she can benefit from its all-encompassing reach and make contact with enough serious customers to sustain and grow her business.    On one level Etsy provides a very simple service—allowing vendors to reach people who might not otherwise be aware of their products and make sales.    On a deeper level though, it allows entrepreneurs and customers who are passionate about something—often very niche—to find one another.  At the same time, Etsy provides the hope of freedom from the nine-to-five, and the opportunity for thousands of ambitious entrepreneurs to share their innovations with the world.    Etsy doesn’t promise its users success; it simply offers them a fair shot.    The gamble and risk is all theirs.    There is no physical exchange of goods between Etsy and its users, and the website makes its money by charging a commission on sales.    The irony is that many users who break down the actual time they spend making a product versus what they can sell it for find they are lucky to make minimum wage.    Other users find that their quirky one-offs are copied by factories or larger operations who can then undercut their prices on other, more commercial, retail sites.    The relationship between Etsy and the store holder can be turbulent; users love the site, but some are growing increasingly frustrated that the core premise—you can only sell what you yourself make, crafting supplies, or vintage items—limits their potential profits.  There is no way to scale your offerings which keeps merchants artificially constrained.     This ceiling means that the vast majority of users are doing this for one reason: passion.    They love what they do, and they love/hate the website that allows them to do it.  Passion makes the relationship between organization and customer volatile.    Some companies can survive it (think of the outrage that briefly but noisily roils around every iteration of Facebook’s operating agreement)   Others misjudge the depths of their customers’ feelings and can come perilously close to crumbling because of it.    The Dutch bank ING enraged their customers by paying bonuses to bosses after it had been bailed out by the government.    The banks’ customers were so angered that they rallied on Twitter and threatened to withdraw their deposits en masse.    Eventually the bank reversed its position, the bonuses were rescinded, and order was restored.  It will be interesting to see what Etsy evolves into, and whether it can keep users  passionate in a positive way as it continues to grow at an accelerated rate.    It’s possible Etsy will see them grow resentful, much like the original eBay sellers who railed against changes in the site’s fee policy.    For now this very simple exchange is enough to cement their customer’s passion and loyalty.    Can you say the same about your business?  So ask yourself ..  Who is passionate about my product or something it relates to?  Challenge yourself to think deeper about how your customer thinks about your product ..   [Sparking Points]  Do you or your product inspire an emotional reaction from your customers?   Do they feel like they couldn’t get by without what you do?  Why or why not?  Can you tell the difference between a customer who feels frustrated that he has to use your product, and one who is grateful that your product is there and available to him?   What are you doing to understand this emotional connection?    This emotional connection has its pros and cons.  On the pro side – its key to market success as you look to differentiate yourself from your competitors  On the con side -- if you upset that passion, you may find it turn into anger and aimed at you..  

What is surprisingly inconvenient about my product?    The designers and engineers who work at HP face many challenges in getting their ideas signed off on.    It’s a long process from an idea to a finished prototype.    Before any product can hit the market, it faces one final test.    I take the prototype home, give it to my wife, and say, “Tell me what you think.”   Now, my wife is an extremely smart and focused individual, but she is emphatically not a techie.    She doesn’t care how a gadget works; she just wants it to work.  Her lack of specialized knowledge has been hugely valuable to me over the years.    If I test a new product, I can troubleshoot it almost without thinking.    I might not even notice a glitch that could cause major hassles for an end consumer because the fix is second-nature to me.    On the other hand, if my wife can’t get a product to work, the first thing she does is call me up and yell at me, which is a great incentive to get our products as flawless as possible.  Back in 2007, she was relocating her stained-glass studio to California from our former home on the East Coast.    She was a little nervous about the drive.    Luckily, I had just been given the first working model for the latest GPS device that HP was about to go into production on .    I gave her a quick lesson, and off she went.    Three days later she calls me from the road, almost speechless with rage.    The GPS looked great and had the lasted hardware features anyone could want.    What it didn’t have was accurate maps.    Every time my wife searched for rest stops, it came up empty.  When she finally made it out west, she met me for lunch at the HP cafeteria.    The head of our division that developed the product came up and asked her what she thought.    Her response?   “Well, it was clearly designed by a guy; I stopped at every crummy gas-station bathroom between here and Kentucky!”   The GPS was super-fast, looked great, but had completely missed the mark on why people buy GPS devices, which is based almost purely the quality of the maps and the points of interests along the way.    Great hardware can’t compensate for faulty software.  The GPS device failed the wife test, and it had failed my test too.    It was sent back to the drawing board.  There are two ways to uncover these kinds of potential annoyances in your new or existing products.    One is to observe your customers and see what they are doing with your product and what their experience with it is.    The other is, use the product yourself.    Either way, you need to be fanatical about constantly improving the product and getting rid of the problems you uncover.    Keep in mind that I’ve observed major differences between how men and women handle these issues.    Guys have ego wrapped up in their new devices; they won’t let the gadget win.    A woman will give it three chances; if she tries to use a new product three times and it doesn’t work, she’ll take it back to the store because she doesn’t have any interest in fighting with the product and winning.    Men are much more likely to keep tinkering with the device and, if all else fails, stick it in the garage and forget about it.    If it doesn’t work for a woman, she’ll let you know, and you’ll have a returned product on your store shelves.    This is one of the reasons I rely so heavily on the wife test; my wife is a zero-tolerance consumer.    If you don’t have a zero-tolerance consumer, you need to find one and embrace them.    Have them test your products and give you the unvarnished truth about your products’ real usefulness and value.    That way – you can answer the question ---   What is surprisingly inconvenient about my product?    But don’t stop there .. ask yourself ..     [Sparking Points]   How do you uncover what customers perceive to be inconvenient about your product?   Are you aware of the inconveniences?  Do you use your own product or service?  What’s your version of the wife test?    Go beyond the obvious by ignoring your own likes and dislikes about any given product. You are NOT the best gauge of your customer. Get up – and go talk to them.  

  Do you sell atoms or bytes?   Do you think that your answer could change over the next five years? Think about Amazon and the Kindle.    Jeff Bezos asked, What is my role going to be if the nature of books changes? He realized that to stay relevant and necessary his company needed to retain control over something tangible and physical.    There could have been other options.    Amazon could have bet that the reading experience would fully transition to audio, but initially they ultimately gambled that the act of reading was still integral to the enjoyment of a book.  It was later they acquired Audible to ensure they could serve customers no matter the format they chose.    So, how do you stay in control of a experience when your product is going from atoms to bytes?   Think about what a profound change this is.    What would you do if your physical product—one that has been around, unchanged, for hundreds or thousands of years—suddenly seemed headed toward obsolescence?   How do you still keep yourself relevant—an essential part of a transaction or an experience—especially if, like Amazon, you are primarily functioning as the middleman between product and customer?   How do you keep that link alive?  For Amazon, that link is providing the medium that brings the printed word to the reader.    First that medium was books, and now, for many, it’s the Kindle.    Amazon has been smart to keep physical ownership over the process of reading.    Even though a reader may have transferred allegiance to digital media, Amazon is still controlling access to the “thing” in a reader’s hand.    Granted, there are plenty of competitors springing up, all with their own pros and cons, but none has both the sheer heft of Amazon’s catalogue and the huge advantage of having arrived so early on the market.    A Kindle, like the Hoover vacuum cleaner before it, is becoming both the specific name of the product, and a catch-all term for its category—a great place to be.      It will be interesting to see how far Amazon pushes the possibilities of the Kindle, and how its relationships with publishers and authors will develop.    Publishers are no longer in the business of selling paper, yet most still act as though they are.  From my own experience of releasing my book through a big name publisher, I found myself caught just as the flip from print to digital was happening and it was quite evident that they were caught off guard.    For instance -- the publishing industry is still figuring out exactly how to handle pricing on e-books, and especially how e-book pricing can and should be aligned with traditional book pricing in a way that makes sense to the consumer.    Customers are not happy to pay more for a Kindle edition than a hardcover edition of a bestseller. And with the growing number of people listening to audio releases of books, the consumer confusion on pricing is becoming and even bigger issue.    Why is it that some books are more expensive as digital than as hardcovers?    It doesn’t make sense to consumers, and it’s a downright dangerous situation for all concerned if book piracy takes off in the same way that music piracy did a decade ago.  You don’t want to antagonize your customers or make them feel like fools for buying what you are selling.    Offering a digital download for more than a hardcover does just that.  Maybe its too late -- as my book is illegally available for free from some 110 sites around the world  Do not get caught by surprise from a competitor that you didn’t even see coming that going to disrupt your industry .. .   Never stop asking yourself …   How could my product change in five years?  Look deep in to the change dynamics that could give you a weak signal that change is happening.  How? By asking yourself ..     [Sparking Points]   What societal, economic, and demographic changes will affect your customers over the next five years?   Are you missing weak signals about the future of your industry because you feel like the seismic shifts will not affect you?    Change is inevitable .. how you respond is what separates the winners from the losers.   So, which are you?  

Where do we perform product research and development? Where else could this be done?   What is your organization’s philosophy about design and development?   Do you keep everything in-house, or do you outsource as needed?   There are two schools of thoughts on this.    By keeping the design process in-house, a company can build a sense of continuity and cohesion that links the entire family of products together in a satisfying way.    Or you can outsource as needed, hiring talent for specific products and moving on once that product is complete.    Neither is right or wrong; the more important point is to have a rationale for whichever strategy you choose, and to extract the most value from it.       Look at a company like Herman Miller.    Their Aeron chair is an iconic design for the technological age, but it wasn’t designed internally.    Instead, Herman Miller outsourced the design to leading designers that have their own firms.    The famous husband-and-wife team Charles and Ray Eames designed the classic 1950s Eames chair the same way.    The point is that Herman Miller knows what their strengths are: manufacturing and distributing the final product.    They also have a huge amount of practical expertise.    For instance, they have experts in ergonomics, the less obvious details that are critical to the overall comfort and practicality of a product (e.g., the way a chair distributes the body heat generated by the user).    They share this very specialized knowledge with designers, and then throw the company’s expertise into selling the final piece of furniture.    Herman Miller has a very different idea of where design, research, and development should take place.    Herman Miller has adopted the philosophy that it’s more important to ensure that the best and brightest are working on your product, and that this is a higher priority than making sure the work is done in-house.      Also, think back to the DreamScreen project I mentioned in chapter 6.    When we began that project, we were very clear that we were going to make it specifically for India.    So why would you design it in the United States?   If you’re going to design a product for a specific market, then you need to throw out the rules of how it’s been done in the past and do the R&D closer to the customer.    So, we sent a team to India, interviewed 2,600 customers, and drove the R&D from there.    Sometimes you have to put your resources in the right place to get the right results.       You need to be aware of the fact that your team will have gaps in their life experience, their beliefs, and their focus.    This may not matter in 99 percent of the projects you assign them, but there will be times where these gaps are a problem.    Consider the possibility that you need to look outside your walls to find the right brains for specific tasks.    You aren’t going to have 100 percent of the resources you need inside your organization; it’s just too costly to keep these highly specialized people on the bench until you need them.    If you are an employee in one of these specialized departments, you need to be aware of how this shift is going to change your value to your organization.    If you believe there’s a coming transition to the creative economy, then your future worth and career is dependent on your ability to come up with ideas for a number of companies rather than just one.    As soon as you go dry, you are out of luck.      Another element of this Killer Question that you need to consider is the concept of open innovation, which has been a hot topic for the last few years.    Open innovation is the approach where organizations go outside to secure a “funnel” of ideas.    One example is companies who partner with state universities to leverage government-funded research, or companies who sponsor promising high school students in the hope that they will join their workforce after graduation.    The US government is using programs like TopCoder to create open-source idea channels.    Companies like Procter & Gamble post tough engineering problems on dedicated websites and offer prizes for the first person to come up with a solution.      How does this affect you and your business?   No matter what size your organization is, you have to recognize the importance of embracing the open-innovation concept as you source your ideas.    One of the challenges with innovation today is that many people believe that high-impact innovation comes from large companies.    However, the US Small Business Administration reports that while small firms are granted only 8 percent of all patents, they receive 24 percent of all patents issued in the top-100 emerging technologies.    So the source for ideas in the new and emerging areas is strongly influenced by start-ups.    Patents issued to small businesses are not broad, generic patents, but are focused on specific innovations and have the biggest scope and the highest return.    It’s why you see so many examples of large companies acquiring these young innovative start-ups that are focused on a very specific area that is of interest to them.       This means that large companies are looking for sources of innovation outside of their four walls, and they realize that they need to be part of what others are doing, either by partnering with innovative start-ups, acquiring them, or investing in them.    Procter & Gamble has a stated target that 50 percent of their innovations need to come from outside the company, which forces their people to seek out others who are doing interesting stuff, not just to rely on what’s happening at home.        Innovation used to be all about confidentiality, funding your own research and development.    The future is different.    This shift from the knowledge economy to the creative economy requires that organizations think differently about their funnel of innovations.    The fundamental value in the new economy is ideas, and ideas can come from anywhere.    You don’t need machinery or a lot of capital to have ideas.    The creative economy relies on the individual ability to come up with ideas that are interesting and compelling.    The sourcing of those ideas can come from anywhere, and you need to recognize that there are really, really smart people all over the world.    In order to stay in the game, you have to be on the constant lookout for where that next great idea is going to come from.    Because even if you aren’t looking for it, I can guarantee that your competitors are.       [Sparking Points]  Are you doing your R&D 100 percent internally or externally, and do you really understand why you do it this way?   How confident are you that you have the best possible research and development teams working on your projects?   What would be the result if you radically changed your approach to R&D? 

In the traditional R&D process, the product is developed and then handed off to the design team to “wrap” it and make it look pretty.    The drawback is that this approach is out of date; in the last ten years consumers have become much more design-savvy.    Consumers want functional, usable design that highlights ease of use, or a more emotive design that adds a personal connection with the product or in some way broadcasts a statement about the user’s more subtle, hard-to-define beliefs about themselves.    We can all name a handful of companies that are melding form and function in a way that resonates with users and creates a deep-seated brand loyalty.    Look at JetBlue.    They are essentially a low-cost carrier, but their design does a masterful job of suggesting that they provide a full-service experience.    Their terminal at JFK is a flashback to the old-world style of travel—more elegant and sophisticated than its customers would expect it to be, and more pleasant to spend time in compared with the terminals of most of its competitors, the so-called legacy carriers.       It’s important to constantly ask why you develop your product elements in a particular order.    This is especially true if your organization has been in business for a substantial length of time and yet you’re still developing your products in an order that was devised to suit production methods from decades ago.    Ford Motor Company worked with Ideo and the New York–based design firm Smart Design on the Ford Fusion.    This was a daring move for Ford, as the car industry has always believed in keeping new ideas proprietary.    By bringing in outside firms they risked their design being leaked prematurely.    However, they recognized both that they needed to do something bold with the design to reflect the radically new nature of the car and that they didn’t know where to start.      Ford wanted a design that reflected the fact that the hybrid car was something “new.”   Part of this process was realizing that their potential customer base was made up of people with wildly divergent needs and wants.    There were the hard-core “hypermilers,” who kept spreadsheets detailing the performance they got out of every gallon of gas.    There were customers who were concerned about the environment but didn’t think much about it beyond making the decision to go hybrid.    And there were people who simply were looking to lower the amount they spent on gas but weren’t emotionally invested in the environmental aspect of the vehicle.    All of these groups wanted different levels of information and feedback from the dashboard array.    The hypermilers wanted to “keep score” of their gas mileage and monitor how the car was performing at different points during their driving experience.    The less environmentally focused customers wanted a simpler, less distracting display.    The only thing all the potential customers agreed on was that there needed to be an easy-to-find clock display  somewhere on the dash.    So, rather than developing the dashboard last to meet the specs of the car (as it is typically done), the design team reversed the process and started working on the dash long before they even had the car itself designed.    They started off interviewing hundreds of potential customers but quickly realized that no one design was going to make everybody happy.    After multiple rounds of testing they developed a dash that allowed the driver to pick one of four settings that determined what appeared on the display.    Once this concept was finalized, it was sent to the engineers to incorporate into the overall specs of the vehicle.    By reversing the order in which their process was normally done (here’s the car, now figure out how the dashboard works within it), the combined team of Ford, Ideo, and Smart Design were able to come up with a unique experience that reflected the environmental philosophy of the car and give users a customizable experience that was much more likely to please the individuals who purchased the vehicle.         [Sparking Points]  In what order do you develop an idea and its components?   What would happen if you changed that?  How did you make the determination about your customers’ priorities in regards to how you ordered the phases of R&D?  When do you involve design in the R&D? What would be the impact if you change it? 

What emotional, psychological, or status benefits could people derive from using my product? Do you have diamonds stashed away that you reckon you can sell if times ever get tough? Say, a family heirloom, or an engagement ring from a failed marriage? Perhaps you know how much the diamond was appraised for by a reputable seller and feel confident that you can get a reasonable return on your investment.  If so, you’re in for a disappointing surprise.   In the late 1880s, a group of British financiers who’d invested heavily in South African diamond mines grew alarmed at the discovery of vast new supplies of the supposedly scarce gem. They realized that the value of their What—diamonds—was essentially the public’s perception of them as both extremely rare (and thus valuable), and a sign of sophistication and affluence. This belief about what the diamond merchants were selling would be irreparably damaged if the world’s markets were suddenly flooded with the gems. The financiers banded together, formed the De Beers consortium, and have managed and manipulated both the supply of diamonds and the public’s perception of them ever since. In the late 1940s they coined the phrase “A diamond is forever” and persuaded young couples everywhere that the purchase of one was an essential symbol of love and devotion. In the late ’50s, they responded to a glut of tiny diamonds from the Soviet Union by creating the idea of and the market for the “eternity ring.” The eternity ring was promoted as a gift for established couples to celebrate their ongoing commitment. Rather than one large diamond, the ring was comprised of a string of tiny diamonds set in a band. Prior to the eternity ring, customers were more interested in purchasing large diamonds. De Beers was able to convince consumers that these small diamonds were equally desirable by creating the idea that the small diamonds represented the passing of the years. Smart. Even more cleverly, they realized that by marketing diamonds as both investments and emotional signifiers, customers would keep them rather than reselling them down the line. You might part with Grandma’s bond portfolio, but you were far less likely to sell her ring. This sentiment helps keep untold billions of dollars of privately owned diamonds off of the market, thereby keeping the price of “new” diamonds high. Brilliant. However, the actual value of a diamond is negligible. Recently a friend took a loose diamond to a dealer. She had vague plans of buying a twin for it and making earrings for her daughter. The dealer squinted at the stone for a moment and quoted her $7,000 for a diamond that would match. When she balked, he looked up at her, and without blinking an eye offered to buy her stone  for $2,000. She politely declined. The diamond industry has expertly shepherded their customers into thinking and believing certain things about their product. Now, I’m not necessarily advocating this kind of strategic manipulation, but it’s interesting to look at how flexibly and fluidly De Beers is able to revise what their product actually is. By doing this they are able to reflect the realities of the existing marketplace and also create markets where there were none.   De Beers has answered this Killer Question, most recently with the creation of the “right-hand ring.” It was first unveiled in the early 2000s as the luxury goods market was nearing its apex. The right-hand ring is, like most engagement rings, made of diamonds and set in platinum. However, unlike an engagement ring, it is made for women to buy for themselves, as a symbol of emancipation and self-worth.   I would have loved to have sat in on the concept meetings for the right-hand ring. The diamond industry has been very clever in adjusting their product to both lead and respond to social changes, and I’m sure the right-hand ring is no different. The ring hit at a moment when the consumption of big-ticket luxury items felt like a statement of success and self-acceptance. It was a clever idea that subverted what buying a diamond ring traditionally means, turning it from a symbol of commitment and marriage into a declaration of independence and freedom. The diamond industry has managed to create two products that are basically the same thing, yet fine-tune two completely different messages for them and thus create two different markets. At the same time, there is no public sense of a contradiction between them, and thus they’ve been able to add a whole new audience without compromising their existing one.   There is something pretty clever about the way the diamond industry has both manipulated existing markets and created new ones. Their products are imbued with both emotional value and the perception of “real” value. Owners feel that the diamonds convey a sense of wealth and prosperity, even though the stones are nearly always worth dramatically less than the owners believe. There are also larger questions about the way diamonds are obtained from the third world. However, no one can deny that the marketing minds of De Beers have done a fantastic job at both shaping their customers’ needs and criteria and responding to them. [Sparking Points] Does your product create a connection with its consumer that goes beyond just being a good solution to their needs? Can you refine it to reflect the changing needs and desires of your customer? Is the emotional connection literally between the customer and the product, or between the customer and what the product signifies to them? Are there good or interesting reasons to resist an emotional connection and actively prevent one from developing?

Do you have a digital twin? The concept first formed on consumer sites like Yelp, but it’s becoming a catchphrase in marketing and sales. The idea is that dedicated users of sites like Yelp eventually notice that there are other users whose tastes, interests, and “favorites” match their own. These digital twins do not “know” each other in the traditional way. They most likely never communicate directly with each other, but a link forms as one person realizes that the other seems to like or dislike the same brands that he or she does. Both twins’ tastes align across a number of sites. People start to trust these twins to the point where they bypass the process of reading multiple reviews, and simply check to see what their twin thinks. Eventually people start to value their digital twin’s opinions over their own.   Recently I was looking for a barber, since my previous one made the inconvenient decision to retire. I went on Yelp and found a local husband-and-wife shop that had more than a hundred five-star reviews. I showed up one Saturday for a cut. Sure enough, the line was out the door and the service was great.  Now, I’ve never met any of these reviewers, but my instinct was to trust the collective voice of the group. This is a huge change from the old days when I would have gone into work and asked my buddies in the office for a recommendation.   The power of the anonymous point of view has been amplified. And it is incredibly hard to control. Customers used to be much more influenced by sales guys in making the big purchases, but now an individual can walk into a store already sold on what brand and item they want—even if it’s an item they have no real experience with or knowledge about. So what’s the end result? There’s been a huge swing in influence. The individual voices of happy or dissatisfied customers has been amplified—way beyond the power of an individual voice in the pre-Internet era. Brands have lost some control, and advertising or sales reps are losing their ability to influence the sale. This is a huge shift from how people used to be swayed in making their buying decisions. Customers are relying on sites like Yelp, digital twins, and other forum sites because they want to reduce bias in their purchasing decisions. We are all savvy to the way advertising or paid product placement can influence us to buy things that might not be right for us. We weight our purchasing decisions more heavily toward these anonymous voices because we think that doing so will help us to make better decisions. We want our decisions to be less about who had the best advertising campaign and more about who has the best product.   Granted, most users are sophisticated enough to understand how these review sites “work.” A small number of highly positive reviews are a less accurate reflection of the actual experience of buying from this store than a larger number of mixed reviews. Once you get north of fifty or a hundred reviews, the sheer volume of reviews makes it harder to game the system. Users know that they can throw out the extreme reviews. The very low and very high scores are most likely biased, and can cancel each other out. Once these extremes are gone you are left with a more meaningful and less corruptible medium review. The key element of using a digital twin is to find that one person who is so central to a network that they sway the opinions of others. Or, perhaps more interestingly, explore how you can replicate the experience of a digital twin in a more controllable, less organic state. How can you give your user the feeling that your product is approved of and supported by someone whose taste is trusted by “the crowd”? Digital twins are the next logical progression from using celebrities to promote products. These anonymous voices can become highly targetable and very localized microcelebrities who have a sense of authenticity that comes from the social media they use. So, how will you use them to your advantage?   [Sparking Points] How are your customers influenced to buy your product? How will your customer discover and select your product in five years? How could you get your customer to buy your product if you stop paying commission or buying advertising?  

Who am I not selling to because I think they can’t or won’t pay for my product? Price is king, right? “Build ’em cheap and stack ’em high” is practically the motto of most segments of the tech industry Naturally, there are some notable exceptions for companies producing exclusive high priced products. It’s certainly a core assumption about what the majority of customers want. For example, $320 is a huge sum of money for a middle- or lower-class Indian family, but it didn’t stopped sales of HP’s DreamScreen. HP customers saw the value that DreamScreen would bring to their lives. The price, though steep, made sense. The lessons learned? Never kill an idea because you assume your customers can’t afford it. If the value the product brings to their life justifies the cost, they will find a way to make the purchase. Your first concern should be to make it relevant; your second, to make it affordable. Remember that in many cases the customer is not evaluating the perceived worth of your product solely on price, but more on value. They ask themselves, “What do I get for the money that I spend?” If you’re getting tripped up in trying to understand if your customer will perceive your product as “expensive,” ask yourself if you are confusing price and value as being the same thing. Price and value are not the same thing; if there is sufficient value in the product the customer will find a way to save for or finance their purchase.   People will find a way to pay for the things that are important to them, and important is a purely subjective thing. Look at the organic food market. Vegetables that are certified as organic cost an average of 50 percent more than nonorganic. Organic milk and meat can be as much as twice the price of conventionally raised  products. Now, everybody benefits from healthy food, but there is still no definitive study showing that an organic head of broccoli is dramatically healthier than its conventionally raised counterpart. Yet millions of people regard the extra cost of organic food as part of the cost of doing business, or raising their family. Organic matters to them, and they’ll prioritize it, even if it means cutting out other items from their budget. There are other ways to give a customer access to products that are theoretically too expensive for them to purchase. In the last five years —  businesses that allow women to rent luxury items for monthly fees have become a huge trend. Bagborrowandsteal.com allows a user to rent a Chloé handbag for $225 a month. At the end of the month, the customer returns the bag and receives a new designer item in its place. The bag would cost her more than $1,500 to buy new. Other companies rent designer dresses for roughly ten percent of the purchase price. The woman rents it, wears it, and returns it a few days later.   There are questions here about whether these smaller rental companies are harming large luxury brands by devaluing the products they rent, or benefiting them by extending the brands’ reach to a new audience. There are good reasons why Gucci, for instance, does not rent their dresses and bags directly to a customer. The person who purchases a dress for several thousand dollars does not want to see it worn by her assistant for a tenth of the price. However, if that assistant then goes out and buys the perfume to go with the rented dress, and begins a longer-term relationship with a brand like Chloé or Gucci or Louis Vuitton, then maybe it ultimately benefits these brands. The same goes for those who rent expensive sports cars for a special event from companies like Gothem Dream Cars. Here you can rent a Lamborghini Aventador — a car that retails for $468,000 — a car way out of the price range for 99% of the people. That rental cost?  $2,500 for a three day rental. Just enough time to empress at the college reunion … or to celebrate that special anniversary. Either way, it’s an interesting and innovative way to tap into people’s desires, and provide them with the things they need and want — but wouldn’t event be able to consider given their income level.   So ask yourself … Who am I not selling to because I think they can’t or won’t pay for my product? Dig deeper by asking … Is the expense of your product in some way central to how your customers think or feel about it? Would you benefit from having more people able to afford what you sell, or does its exclusivity magnify your potential customers’ desire to buy it? Don’t discount potential customer segments because of what you perceive is the willingness to pay. Remember — price and value are not the same thing. I’m Phil McKinney — and thanks for listening.

One thing is to know what your customers want to do, another is to understand how they intend to get it done. It’s easy to look at their goals and tell yourself that your product will match their needs. However, if you don’t understand their internal philosophy about what they are doing and why they are doing it, you may find that they consider your product a complete failure. Competing companies can have the same goals but radically different strategies about how to achieve them. One of the clearest examples of this is the decades-long tussle between Airbus and Boeing. Both companies brought new long-range aircraft to market at more or less the same time. However, their respective offerings, the A380 and the 787 Dreamliner reflect radically different ideas of how airlines will meet the needs and desires of their passengers. Both companies understand the bottom line in their industry, getting CASM—cost per available seat mile—as low as possible. Both claim that their aircrafts are highly fuel-efficient. Each also uses radically new technologies. The 787 is made of lightweight and high-durability composites and advanced aluminum alloy. The A380 boasts new integrated avionics systems in the cockpit, designed with fewer parts to push maintenance costs down, and its cockpit is designed to be simpler for a pilot to switch between one Airbus model and another (giving airlines more flexibility with their crews). The onboard servers are robust enough to ensure that pilots can safely go “paperless.” Crews can now ditch their bulky manuals and instead rely on the on-board computers to supply all the charts, logs, maintenance records, and performance calculations they need during a flight.   However, the A380 and the 787 reflect completely different philosophies about how passengers will get from one destination to the other. The A380 is a hub-to-hub aircraft. Its size limits the airports it can service. You’ll see it at places like London Heathrow, Los Angeles International, and Singapore’s Changi Airport. You won’t see it in Cleveland or Oslo or Fort Lauderdale. Airlines placing orders for the A380 are betting on two things. First, they assume that there will be a meaningful number of passengers who are simply looking to fly from hub to hub. Some examples might include the businessperson in London who needs to make a presentation in L.A. or the family in Sydney who wants to vacation in Paris. Second, they are betting that passengers will be willing to adhere to the old model of international transportation and connect from second- and third-tier airports via a hub.   Boeing is betting the other way. The 787 is small and nimble enough to service second-tier cities, yet its fuel efficiency allows it to function as a long-range aircraft. If Delta’s or United’s marketing department decide that Columbus, Ohio, needs nonstop service to Paris, they could do it with the Dreamliner. They couldn’t do it with the A380.   Airbus and Boeing both asked themselves the same Killer Question: What are our unshakable beliefs about what our customers want? Yet as soon as they’d asked that question and started to investigate it, they veered off in radically different directions based on what they believed their customers’ needs and wants were.   The jury is out on who made the better bet, but my gut instinct is that both companies will struggle before eventually finding sufficient market share to justify their gamble. Innovation isn’t always about beating your competitors. Each thinks they’ve satisfied one need, but really their customers have multiple needs. A goliath like United Continental will have needs for aircraft that can extract the most value from long-haul, large-volume routes while at the same time having aircraft that can service smaller airports. The bigger problem for manufacturers will be if airlines decide to embrace fleet homogeneity and restrict themselves to using either Airbus or Boeing.  So don’t be afraid to ask yourself What are your unshakable beliefs about what your customers want? .. and don’t stop there …. Dig deeper by asking …   Do your customers and your competitors’  customers have the same criteria as one another, or do they have different needs and selection processes?   How would you engage with your competitors’ customers to understand their needs? And how could you align their needs with what you are doing?   Don’t let past understandings or belief trip you up. Go our and validate every assumption and unshakable belief. I’m Phil McKinney — and thanks for listening.    

What are your criteria for deciding that an idea is worth pursuing? We all have our own set of selection criteria, the first of which is usually looking for profits. However, selecting a course of action based solely on ROI can be limiting. If you are doing something really innovative, how on earth can you determine what the margins will be at an early stage of the product? The problem is, if you filter out new ideas based solely on whether they meet your financial projections, then you’re going to miss some great—perhaps groundbreaking—concepts. As mentioned in chapter 5, when you get to the ranking phase of FIRE, ROI shouldn’t be your first filter in deciding whether an idea is worth pursuing. When HP first got into printers it seemed like a tiny and not particularly interesting category. Now it’s one of our highest profit-producing businesses at HP. If we’d said, Nah, not doing it; it’s too small to be worth it, we would have made a catastrophic mistake. The printer division isn’t the first example of where HP has made a tough call. Back in 1968, Bill Hewlett wanted to get HP into calculators. I know from personal experience that projected ROI can be misleading. Be aware of your bias toward flashy and exciting numbers, and remember that figures on a page are easily malleable. Don’t turn down an opportunity because you think the market is too small. When a someone comes in with a $200 million idea, and it piques my interest, ask him, How do you make this idea big enough to make me care? What do you need—more money, more resources? Are you being conservative in your estimates? How do you take this smaller idea, and make it ten times better and ten times bigger? So -- think long and hard on how you would answer the question: What are the criteria to select research and development projects? To dig deeper -- ask yourself ..  What is the one key criterion that you must meet for a project to get approved? What would happen if you ignored this criterion in the evaluation process? What are the criteria used by others either inside your industry or outside of your industry? Based on this, what would you change in your criteria? Don’t get caught in the trap of thinking that your criteria protects your from risks. Risk is still there. You criteria may cause you to miss that next great opportunity.

My wife is famous for being a little frugal. She once routed me and our son Logan  from Las Vegas to Phoenix to Los Angeles and finally to San Jose because she could save twenty bucks each over the nonstop fare. Kind of nuts, right? But if I’m honest I have the same mind-set in one respect: I am determined to squeeze everything I can out of any idea or opportunity that is available to me. I am diligent about looking at information and ideas that supposedly have “no value” and wondering, “Hey, maybe they do.” What I mean by this is simple. Just because you or your business has always operated under the assumption that something—be it data, ideas, or scraps from the manufacturing process—is essentially worthless, it doesn’t mean that that assumption was ever, or still is, true. I constantly review the stuff that gets thrown away and ask myself, “Is there value here?” One of my big breaks was becoming one of the early executives at Teligent, in 1997. Teligent provided phone service to businesses across the United States and in twelve other countries. The core products were voice and data services to businesses. There wasn’t much to differentiate us from our competitors. Basically we were all competing on the same fundamental premise: providing a good, reliable service at a cheaper price. Here’s the problem with that: If there are no significant differences between you and your competitors, you are essentially in a stalemate, until one of you finds a way to differentiate from the pack. So, even as our company continued to hum along nicely I started asking the questions about who we were, what we were doing, and how we were doing it. I started doing some internal investigating about the information we were gathering from our customers. After a little persistence, I got hold of the complete call-detail records for our network. In the telecom industry, the network throws away any record that isn’t relevant to billing. The result was that 70 percent of the information in call-detail records was thrown away. A customer rang a business, the line was free, the call was answered, and a charge was added to the bill. Great, that’s how we make money. But looking through the full call-detail records, I noticed something interesting: The logs showed not only the calls that succeeded, but also the calls that failed. For each business there were pages and pages of incoming calls that weren’t completed, usually because the line was busy, or the calls were coming before or after business hours. This was information that was thrown away. We didn’t bill for failed calls, so there was no need to document them or supply the information to the customer. But think about it—surely knowing that a potential customer tried and failed to make contact with you is invaluable information. Furthermore, isn’t it the kind of information you would gladly pay for? As soon as I saw the connection between this “worthless” information and our customers’ needs, I got up, walked over to our CEO Alex Mandl’s office, and pitched him a completely new kind of service that we eventually launched as e•magine. e•magine was a game-changing concept that allowed us to take a leadership role in the market. For a monthly fee, we offered our customers detailed breakdowns of all the incoming calls that failed to get through, as well as additional services like instantaneous e-mail notifications of each missed call. We supplied the names and addresses of every incoming call, so a business owner could then send out a coupon to every caller the next day. Sound simple? Think about the small- or medium-size business owner whose margins depend on making every single sale. If that new customer doesn’t get through to you, they are simply going to ring the next number in the phone book. They have no loyalty to you, and you’ve lost a sale and a potential long-term customer. But if you get instant notification of that call, and can ring right back, you’ve got a fighting chance. You’re still in the game. Our customers loved e•magine. By giving them the edge in their own business, we cemented their loyalty to ours. By taking something that we had historically thought had no value and creating something our customers valued out of it, we turned it into a game-changer. Look more closely at your operations and stop worrying about the assets or attributes that you think you don’t have. Instead, try turning inward and focusing on the question What attributes do I not realize I have? Our competitors had the exact same logs and information as we did; yet they didn’t recognize their value. We saw this information had worth, and we used it to clobber them. Think it’s a dumb idea? Zoos used to pay a small fortune to have manure hauled away. Then someone had the bright idea to package the manure and market it toward gardeners. Now gardeners buy gallons of elephant manure for up to twenty bucks a pop and do the hauling for free.

One of the first products I created as a software developer was a touch-typing program called Typing Instructor .  This was back in 1985, and at that time there was no such thing as a standard PC. Instead you owned a specific brand and had access to the programs that had been written specifically for that make, whether IBM, Wang, or DEC. Each of these companies was attempting to create lock-in for their third-party software developers. If a user wanted a specific application, they needed to own the computer for which it was written. Now, was this a good thing or a bad thing? All of these brands approached the problem in unique ways. Compaq, a dinky start-up in the 1980s, had the most expansive philosophy about building their business. The team at Compaq realized that to win against the industry strategy of creating unique, proprietary PCs, they must push for PC uniformity. They decided to make their products compatible with IBM. Similarly, IBM licensed MS-DOS, a Microsoft operating system designed specifically for their PCs, a decision that subsequently made a fortune for Bill Gates.  On the other hand, companies like DEC and Wang thought they could create some unique differentiators that would make the software developers come to their platforms first. Wang was especially notorious for wanting to keep their programs proprietary.  Because the PC manufacturers were in a fight to dominate the market and win over the largest market share as quickly as possible, locking a customer into using their brand and making it as hard as possible for the customer to switch in the future seemed like a good idea. One of my first jobs in computer engineering was with a company called Individual Software. I was twenty-four at the time and married with a kid when Individual called me. I knew these guys, and I had faith that they were going to do interesting work, and that it would be a good place to get in on the ground floor of a booming industry. I talked to my wife and we packed up our lives and drove west to Silicon Valley. Individual had some ideas for programs, and one of the first that seemed to have real potential was a simple program to teach touch-typing.   Think about it—home PC use was exploding. Even if a user didn’t need touch-typing at work, they were soon going to start wanting it at home. My colleagues at Individual and I got together and started throwing ideas around. Once we’d decided what kind of program we wanted to write, the second question was What PC are we going to write it for? This was in the early days of Silicon Valley. Individual was at the crucial phase of a young, start-up company. We had the resources to make one or two moves, and if these moves didn’t work, we were going to be out of cash and out of luck. One of the biggest stumbling blocks was the fact that in the mid-’80s there were easily a dozen different major PC manufacturers in widespread use. While each of these companies used the same OS, they all tweaked it by adding custom code to MS-DOS to make it work with their hardware. Clearly some of these PC companies were going to fail, but there was no guarantee about which company was going to win. Since each of these PCs required its own version of your program, how could you decide which one to write for? Individual needed to get products out to as many users  as possible to survive, but any choice we made was automatically going to eliminate the majority of our potential customers. Writing an individual program for each operating system was not financially possible. We had limited research and development (R&D) dollars to spend, and the future of our company was riding on making the best choice. So what do you do? Traditionally a company like ours would write a program, and then spend a lot of R&D dollars on porting it  to as many operating systems as possible. However this wasn’t going to work for us. We couldn’t afford to do it. We had the budget to write the program once, but if we only wrote it once we weren’t going to be able to sell enough copies to ever make a profit. How could we take those R&D dollars and put them into an approach that would allow us to create a standard product once rather than multiple custom versions? We turned this question over and over in our heads. Finally, we did what innovators throughout history have done in this kind of situation. We said, “Forget the obvious solution,” and we decided to take a crazy gamble. Instead of writing a program specifically for an IBM or a Wang, we took the same amount of money and created a software engine that essentially worked as a universal translator, and allowed the same program to run on any of the existing PCs. While the industry, thankfully, has moved away from proprietary PC platforms, developing the translation engine rather than worrying about the program was a 180-degree turn from what was the norm at the time. It could have killed our company and left us all out on the street, yet it paid off. If you go into a big-box computer store today you can still buy a copy of Typing Instructor more than twenty-five years after it was first written.   It’s not hip, it’s not glamorous, but it worked—really well. And that’s what counts.

A few years ago, a passenger complaint letter to Virgin Atlantic circulated around the web. It was very long, fully illustrated with photos, clearly somewhat tongue-in-cheek, and very funny, but it made a few good points about the bad food and surly service this particular passenger had experienced. Almost three years later it still occasionally shows up as one of the most-read stories at telegraph.co.uk. In 2009, another disgruntled passenger created a music video about how United baggage handlers had broken his $3,500 guitar. He uploaded the song to YouTube, and to date it has been viewed more than ten million times. United’s customer service department, which had originally denied him any kind of compensation, quickly changed their minds as the video went viral. They adjusted their tone from defensive to humorous and held a meeting with the passenger. Eventually the airline made a charitable donation to a jazz school in his name. The problem is that none of their existing, former, or potential customers care that United eventually resolved the customer complaint. All they remember is that it took a funny song and nine million YouTube hits to get the airline to do the right thing. United responded about as nimbly and elegantly as a dad trying to name-check Jay-Z at his kid’s birthday party. Not pretty. The point is, it’s easier than ever to find out what your customers are thinking and saying about you these days. It’s also much easier for their opinions to go viral, so it’s imperative that you respond to your them with the same speed and immediacy they use to critique you. Social networking sites have fundamentally changed the nature of the customer complaint. Customer complaints are morphing from one-off exchanges between a customer and a service representative into ongoing conversations, often in real-time, visible to the public, and open to anyone who cares to comment. By monitoring these sites (I currently focus on Facebook and Twitter, but I might be tracking others by the time you read this), you can hear what your customers are saying about you, without them even being aware that their opinions are being heard. I recently found out about a notebook hinge problem through Twitter. How? I have the TweetDeck app up all the time, and I use it to search for any tweet related to HP . One day I was sitting in my office and a customer tweeted that he was having a problem with a hinge on his HP notebook . The complaint got my attention. I put down what I was doing and went to respond to the tweet, but before I could even get my hands on the keyboard another customer replied, “It’s a known problem, HP has a repair protocol.” A few seconds later he used a second tweet to direct the customer to the customer-service number. What? I’m the CTO of the PC division and even I had no idea that we (a) had a problem or (b) had a solution. Yet here was a customer who was at least two steps ahead of me. I grabbed the phone, dialed the product team, and asked, “What’s this I’m hearing about a problem with the hinges on one of our notebooks?” The person on the other end nearly had a heart attack. His department was carefully preparing the internal e-mail describing the problem, and suddenly the CTO of the division is breathing down his neck asking him what the heck is going on. The reality is, you can no longer keep problems like this off the radar, either within your organization or with your customers. Your only option is to engage with the people who care enough to make their feelings public. And don’t stop at simply resolving an issue. The customers, who take time out to post their opinions, or direct others to solutions, are the ones who have actually thought about what you do, and how you do it. Odds are, if they’ve complained about what you’re doing, they’ve also thought about ways to do it better. So ask them.

There is a reason that the percentage in this question is as high as it is.   Sure, it would sound less scary and more reasonable if I asked you how you could cut your price by 5 percent, or maybe 8 percent, but that would be missing the point.   If you want potentially game-changing moves to get ahead of your competition, you need to make big savings and do something bold to get to that leader-of-the-pack position.   The best place to find these kinds of savings is in your biggest input cost.   Don’t settle for parity; look for those things that are a necessary evil in your business and see if you can turn them into a competitive advantage instead.   If you and your competitor have the same basic cost structure and you can slash yours by a major innovation, well, you get the picture.   You need to continually look at ways to drastically lower the price of your product, because if you don’t, it’s possible that your competitors will.    If you’ve ever driven in India, you’ve probably had some alarming near-death encounters with the brightly painted Tata trucks that fill the country’s highways.   They are huge, and rather than using their braking systems they rely on their horns to get other cars out of their way.   About eight years ago Tata decided to enter the passenger-vehicle market, despite the logistical difficulties of making the leap from manufacturing trucks to lightweight single-family cars.    The car they came up with, the Nano, uses a two-cylinder engine and much less sheet metal than a comparable vehicle.   Its trunk can hold one small bag, and it lacks a passenger-side mirror.    In other words, anything that is not strictly necessary to fulfill the mission of getting a family from point A to point B has been cut.   They are currently selling a car priced at under $2,000 in the Indian market.   The cars have some issues.   They are small, slow, and seem prone to catching on fire at inopportune times.   Still, Tata is coming to the US market, and despite some production setbacks in India, it clearly has ambitions to succeed here.    If they do, it will radically change the nature of the domestic car industry.    Would you buy your kid a $13,000 starter car if a similar model were $5,000 cheaper?   US car companies have an opinion about who their customer is and what their customer expects to get from (and to pay for) a car.   And this could prove very dangerous for Detroit if Tata figures out how to connect with US drivers and start making meaningful sales.   If US car companies are going to defend themselves against hungry and aggressive competitors like Tata and their Chinese equivalents, they need to be careful.   These companies have no assumptions or expectations about how they might sell their cars in the United States.   Nor do they have a history of hitting certain price points or any expectations that a car is only worth selling if it brings in a certain amount of profit.   They have different philosophies of what a car needs to be in order to satisfy their customer.   What if the US customer starts to agree with them?   Look at the sudden explosion of unrest in the Middle East and the resulting upswing in oil prices. Suppose things get worse, not better?   A company that knows how to use minimal materials and resources to build ultra-cheap, ultra–fuel efficient cars, and isn’t afraid to charge rock-bottom prices for them, is going to have a huge advantage in the US marketplace.   It will take a cognitive side step for Detroit to respond to ultra-cheap imports from the third world. Hopefully you are willing to take that kind of side step, both to develop your product and ensure you aren’t leaving any gaps for a competitor to sneak something game-changing into the marketplace.

We tend to assume that any customer is a good customer.   However, if you find that you’re working like crazy and have a solid and reliable customer base, but you’re still not making the profits you expected, then ask the Killer Question, Who do I not want to use my product?   Do you remember back when dial-up Internet service first started to transition to the mainstream?   In the early ’90s companies like AOL, CompuServe, and EarthLink began offering access to the web that was billed by the minute.   The more you used, the more you paid.   Logical, right?   These three companies essentially offered the same product on the same terms.   Very quickly, the people who used the services they offered divided into two camps.   The majority logged on once or twice a day, checked their e-mail, read some sports stats or gossip, and logged off.   However, a small minority logged on for hours or days at a time.   These people quickly ran up bills in the thousands. Now—pop quiz—is this a good thing or a bad thing for your business?   These high-volume users love your service, but paradoxically their passion for what you offer will almost inevitably force them to stop, or drive them into an untenable situation if they try to continue.   So, if you were running AOL, CompuServe, or EarthLink, what would you do?   Continue the same pricing structure that strongly disfavored your most ardent users, or figure out some way to continue improving profits without punishing the people who really, really love what you do?   In other words, would you decide to keep or push out these high-use customers?   In the end, AOL was the first to take a radical step to address these questions.   In 1996, they switched from a pay-per-minute system to a flat-rate fee.    This was a daring and audacious move because they risked seriously alienating low-usage customers who were used to paying less than twenty dollars a month.   On the flipside, they had to massively upgrade their infrastructure in order to accommodate demand.   AOL was bombarded with complaints about busy signals and slow speed.   Users joked that AOL stood for “Always Off Line.”   For a short while it looked like they might have made a poor decision.   However, this new flat fee addressed a fundamental fear that even low-usage customers had with the old pricing formula.    Namely, not knowing how much the monthly cost was going to be.   AOL’s new strategy took away the stress that came with worrying about the bill.   Parents no longer had to hover over their kids and nag them about getting offline.   The result was that the company shot ahead of all of the others and became the leading ISP through to the early 2000s.   The other companies—EarthLink, CompuServe, and Prodigy—quickly copied AOL’s new pricing structure, but AOL had the huge advantage of being the first mover.   Their competitors looked like copiers, whereas AOL looked like a game-changer.   They won that round.   In the early days of the mobile phone industry, telecom companies grappled with similar issues with their cell-phone customers hogging the bandwidth in a given area.   Parents would toss a cell phone into their baby’s crib, dial another cell phone from it, and keep the line open all night, using it as a baby monitor under the “free evenings and weekends” pricing promotions.   More recently, people have used their smartphones as jury-rigged security systems by streaming constant live footage from their office or home security cameras while they are on vacation.   Anyone who’s experienced problems with AT&T’s network in urban areas can understand why this might be an issue.   So, are these customers abusive?   Do you want them?   Should you penalize them for using vastly more than their share of the network and compromising connectivity for other users?   If I were still working in the wireless industry, I’d be looking at ways to understand and migrate the high-volume users into an elite program.   My feeling is that if someone loves what you do, and uses it habitually, then that’s a customer you want to hold on to.   If what you see as abuse is actually foresight—being ahead of a curve—then you might be looking at a future revenue stream rather than a problem.   You just haven’t figured out how to separate out this use, give it its own program apart from the existing customer agreement, and monetize it.   In this situation, it’s worth taking the time to figure out a way to find a satisfactory medium between their needs and yours.

Once a product has sold, it’s pretty much out of your control.   You may have an idea why people will buy it, and what they’ll do with it, but the most you can ever do is guess.   So why are you assuming that you know what your customer actually likes and values about your product, and how they use it solve a problem they have?     One of my favorite blogs to read when I have downtime is Ikeahackers.net.   Ikeahackers is just what it sounds like—a place where people can show off the ways in which they have repurposed and customized IKEA products.   Some of the hacks are pretty impressive for a DIY home engineer (e.g., hanging a Mälm bed frame to the wall so it can flip up like a Murphy bed).   Others are simpler (e.g., using printed curtains as fabric for a dress).   Still others border on creative genius (e.g., the financially strapped parents of baby twins who created a feeding station by cutting two baby seat–sized holes in their IKEA kitchen table probably deserve a job in the design and innovation department).     These hackers are an extreme and sometimes funny example of “unanticipated uses,” but I use them here to reinforce an important point.   It’s easy to lock yourself into thinking that you fully understand who is using your product and how they are using it.   There’s a reason Who is my customer? is not a Killer Question: It sets you up to get an obvious and easy answer rather than forcing you to look outside of what you know to be true about the people who use and appreciate your products.     I myself have experienced this disconnect between how I assume my product is used and how it is actually used.   My wife and I had a favorite bakery near where we lived in silicon valley.   The bakery is a small operation that makes great cakes and cupcakes.   It’s one of those places where there is always a line out the door on a Saturday afternoon and my wife likes to take her time, which means that I spend a lot of time there too.   About two years ago we stopped in to grab a quick snack.   As we contemplated vanilla versus chocolate, I noticed an HP TouchSmart set up on the corner of the counter; naturally,   I went over to check it out.   Now, the TouchSmart was the first PC that users could interact with by touch.   It’s got a ton of applications.   A busy, overscheduled family can use it as a hub computer for the home, running their calendars off of it and coordinating and communicating with one another.     My wife uses hers while she cooks.   She goes online to find recipes and coupons, or to check her e-mail.   Sometimes she entertains friends with streaming music, or plays mahjong while they hang out in the kitchen.   Designers and artists, such as the contestants on Project Runway, can use it to digitally sketch out images and ideas that need to be easily and instantly shared.   However, in all our design and marketing meetings it had never occurred to us that the TouchSmart could be used as a customer-facing kiosk in the retail market.   Yet this is precisely what the owner of the bakery had done. He had bought a TouchSmart and written his own simple sales application.   Each image—be it chocolate brownie or three-tier wedding cake—clicked through to an ordering screen.   The customer could customize their order at their leisure, and place it without waiting in the interminable line.   I was impressed, to say the least—and stunned that we had missed such an obvious use for something we’d worked so hard on. In the following weeks, I shared the story with anyone who would listen and suggested to them to go by the store and try it out for themselves.   The teams took that input and developed a TouchSmart version that would support a kiosk offering.   Today if you go into to Sam’s Club, or visit Chicago O’Hare Airport, you’ll see TouchSmart kiosks in action.     So, what should you take away from this story?   The person buying your product doesn’t see it as an end solution.   They see it as a tool that will help them solve a problem.   For example, “I have this tiny, tiny bakery. I can’t hold or display everything I’m capable of offering. I’m losing out to bigger competitors.   When I physically print out pictures and put them in a photo album for my customers, they get grimy and dirty and unappealing in a matter of weeks, yet I don’t have the time to swap out pictures on a regular basis.   I need something simple and efficient that will showcase my wares and take orders when I’m too busy.”   Your customers look at what you’re delivering as a tool—a tool for them to achieve their objective.   I love being surprised on the job, and our local bakery showed me something I’d never considered.   Now, its owner doesn’t think he did anything that interesting. To him it’s a completely logical way to address his need.   The fact that it never occurred to us to offer a TouchSmart as the solution didn’t stop him from figuring it out for himself.   So, figuring out who uses your product in a way you never intended can unlock new opportunities you would have never considered.   You want to potentially double your sales?   Go out there and ask yourself -- Who is using my product in a way I never intended—and how?   Don’t stop there.   Ask yourself ..   What problems and needs are you looking to address? Are you so tightly focused on what you believe your customer’s problems and needs to be that you are missing out on potentially huge opportunities? How could you identify existing customers and observe how they use your product? Is there a way to give your potential customers an opportunity to play with and use your product without giving them specific parameters for how, when, and why they should use it? What do they come up with?   If you are willing to listen -- your customers will tell you what they see as the value from what you are offering.

Magazine publishers are in the same predicament as the book-publishing and recording industries before it. How do you keep your customers believing that your content is worth paying for when there is endless free content available on the Internet? Some fashion magazines are experimenting with making their print issues feel like “must-buy” items;  Bazaar and Elle both offer subscriber-only covers with edgier photography. Others, like the British style magazine i-D, routinely print magazines with multiple, collectible covers. There is a growing audience for boutique fashion magazines that have high cover prices and only come out once or twice a year, making them less like magazines and more like very fashionable books.   Other magazine publishers are looking at ways to monetize their “back catalogue” of content. Condé Nast has an app that creates a customizable city guide for readers. The content on this app is based on existing articles. For instance, if you’re planning a vacation to Italy, you’ll get travel tips from Condé Nast Traveller, recipes to inspire you from Bon Appétit, fashion stories from Vogue, and lists of important buildings to see from Architectural Digest. Magazine publishers think of their assets as magazine titles, when in reality their assets are the tens of thousands of articles that have been written over the years and published in titles like Traveller. So, how do they continue to extract value from these old assets? Does your business have an equivalent backlog of information or experience that you could reshape into a current product? Condé Nast is a rare example of a publishing company that is actively looking to extract value from their back catalogue. Most publishers are still stuck in their old ways of how they’ve always done things. Those that are willing to experiment and try this repurposing will be the ones to discover new areas of growth for their business. It’s not a question of change happening ten years from now. The revolution in magazine media is happening today, and choosing not to participate is just foolish. As is often the case, it is the people and companies who are in trouble, and fighting for survival, who are the boldest. Sometimes desperation is the key to getting you out of a rut. The first magazine to offer an iPad app wasn’t Time or Vogue but Interview, which was a struggling and somewhat avant-garde NYC culture magazine.  The people who feel the cliff crumbling beneath their feet the fastest often have a boldness that their more secure competitors lack. If everything seems like it’s going to fall away beneath you, you have less to lose, and you’re empowered to make riskier, but possibly life-saving, moves. I don’t know if a magazine app will save Interview, but the fact they tried demonstrates their willingness to evolve and fight for their survival. Turn your search inward …  Can you recombine existing components to create new products for customers you don’t currently serve?   For example .. Are you making the assumption that your product needs to be sold as a whole, single unit, simply because that’s how the manufacturing and distribution model works today? Could you provide your product components as individual pieces or in unique combinations? What new customers could you serve? What changes would this require in your business model? BY COMBINING AND RECOMBINING YOUR OFFERINGS, YOU MAY A FIND A CUSTOMER YOU NEVER KNEW EXISTED. I’M PHIL MCKINNEY -- AND THANKS FOR LISTENING.

Do you need to have a finished product in order to make a sale? Is there any way that not offering a finished product would actually give you an advantage, or even become a selling point? My children have long since outgrown toys, but my grandkids have more than once roped into visits to Build-A-Bear. Build-A-Bear, like the paint-your-own pottery craze that preceded it, doesn’t offer a finished product. In fact, the whole selling point is that you create your own customized product in-store. These types of businesses are offering a dual product: both the end result—be it a stuffed animal in a personalized costume or an “I Love PaPa” coffee mug—and the chance to create something without taking responsibility for gathering materials or cleaning up the mess it generates. A stuffed toy may feel like a low-risk product, but children’s fads can be as fickle as an adult’s. Just ask any parent. Once you start adding the layers of design and complexity to a toy—clothes, accessories, prerecorded sounds—you risk creating something that misses the mark with your target audience. Build-A-Bear’s strategy is very clever in that it allows them to keep components, rather than finished products, as inventory. They never have to run the risk of being stuck with 10,000 astronaut bears the week after the latest Pirates of the Caribbean opens. There are two points to take from this. The first is that these companies are reducing their risk of having a stockroom full of briefly popular products that they now can’t sell. The second is that they are able to charge their customers a premium for the pleasure of assembling the final bear. They’ve been able to persuade their customers that down is up. They don’t offer a fully finished product for sale, and if you do want their product -- you’ll have to assemble it yourself. Absolute Genius. Home bakers have experienced a similar shift in how they “make” a product—for example, a cake. When I was a kid, my grandma would make me a cake from scratch every year. The cake cost maybe a dollar in commodity goods. When she passed away, my mom took over the job. She’d buy a cake mix, add an egg, some oil, and some water, and that was it. Of course, the cake was more expensive because of the convenience factor of having pre-made cake mix – but you still had to make it yourself. There’s a relationship here between the amount you’re paying and the experience you’re receiving.  Selling these products is about more than simple convenience. Manufacturers have to walk a thin line between making a product so easy that it feels like cheating, and so complex that the user sees no value in the supposed “convenience.” When cake mixes first came out, they were really simple; all you had to do was add water. But women didn’t like it, because it felt too easy—like they hadn’t contributed anything to it, and couldn’t claim any pride in making it. So cake mixes were altered to require a fresh egg as well, and the product took off. If you want to build this kind of emotional connection with your customer, you need to look at how you can offer them a creative “I did this” kind of experience. There’s also a positive customer experience in being able to feel a sense of personal pride in something they’ve done for themselves. Can you give them an opportunity to take ownership over the construction process? Look at ways in which you can add real value for your customer while simultaneously giving them a less-finished product that reduces your cost to manufacturer and ship. Can you give them the chance to say “I did this”? So ..  Can you create an on-demand version of your product?   While this sounds easy – it requires you to dissect your product or service and ask yourself … What benefits would you get if you were able to sell your product such that the customer assembles it? Could assembling it be pitched as a learning, bonding, or more authentic process? Could you increase the perceived value, and hence the cost, of your product by emphasizing its real-time availability? ITS NOT ALWAYS ABOUT THE FINISHED PRODUCT – BY EMBEDDING AN EXPERIENCE THAT SOLICITS AN “I DID THIS” FEELING, YOU COULD BE THE ONE TO LAUNCH THAT NEXT “ON DEMAND” CRAZE. I’M PHIL MCKINNEY -- AND THANKS FOR LISTENING.

A big part of any business is being aware of, and responding to, the life cycles of the industry and its customers. Some of these are easy to see; you only need a cursory understanding of the effect of OPEC on gas prices in the early ’70s to understand why cars became more fuel efficient in that decade. Other reasons are harder to see. Some criteria can be “faddish,” based on things such as color or brand. Others are based on external influences. For years the cell-phone industry fought to offer the smallest, thinnest possible phone. That’s what customers wanted. Now those same customers are prioritizing access to the web over the size of the phone. This has reversed what was seen as a key and unshakable evolution trend toward smaller phones. Now customers want larger phones with bigger screens. Sometimes trends can be reversed by something completely outside your control. Something that changes the buying decision. What will these same consumers want as they get older? Will full web access and streaming music and video be a priority, or will their needs change as their eyesight and hearing fade? Remember the cycle part of “life cycle.” You may lose the connection with your customers at certain stages of their lives but regain it later.

Have you ever purchased a product that others hated? Or what about the opposite .. .have you ever seen others using a product or service that you absolutely despised? The flipside to any positive emotional connection is a negative one. If you are producing a product or service that is inspiring enough that some people love what you are doing --- odds are there are others will actually dislike your product with an equal passion.

No matter what business we are in, we are all fighting essentially the same fight—designing a product that a customer will prefer over that of our competitor. To do this, we need to constantly be aware of how our business environment is evolving, how our customers are changing, and what we need to modify in order to keep our product relevant and desirable.

“Weak signals” are the equivalent of a canary in a coal mine. They are the unspoken needs and wants of your customers, and they are also the arrows pointing to what your customers are going to need and want in the future.

With any radical idea you will see the corporate antibodies come out of the woodwork, giving all the standard reasons why the idea will “never happen.” Remember, the fundamental assumption of the corporate antibody is that the future will be the same as today. Your customers are going to change. It’s that simple. Don’t let others’ hesitation keep you from pursuing the changes you and your company will need to make to be ready for the unavoidable changes in your customer.